* not completed

Every company must appoint at least one director. True or False?

True correct incorrect

False correct incorrect

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The power to manage a company is initially vested in whom?

The directors correct incorrect

The majority shareholders correct incorrect

The members correct incorrect

The persons who provide the most capital correct incorrect

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In a number of situations, the power to manage the company can revert from the directors back to the members. Which ONE of the following is NOT such a situation?

Where the articles provide for a reversion of power back to the members. correct incorrect

Where the directors are unwilling or unable to exercise their powers of management. correct incorrect

Where the articles provide the members can direct the directors by passing an ordinary resolution. correct incorrect

Where statute provides that the members can interfere in management. correct incorrect

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Which ONE of the following is NOT a general duty?

To promote the success of the company for the benefit of its members. correct incorrect

To obtain member approval for substantial property transactions. correct incorrect

To avoid conflicts of interest. correct incorrect

To act in accordance with the company's constitution. correct incorrect

To exercise reasonable care, skill and diligence. correct incorrect

To exercise independent judgment. correct incorrect

To not accept bribes from third parties. correct incorrect

To declare an interest in proposed transactions or arrangements. correct incorrect

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The general duties of a director are owed to the members.

True correct incorrect

False correct incorrect

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If the directors exercise their powers for several purposes, how will the courts determine if the proper purpose duty has been breached?

If any of the purposes are improper, the duty will be breached. correct incorrect

If the majority of purposes are improper, the duty will be breached. correct incorrect

If the directors were aware that their exercise of the power was improper, the duty will be breached. correct incorrect

If the dominant purpose was improper, the duty will be breached. correct incorrect

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Regarding the duty to promote the success of the company, which ONE of the following statements is true?

The directors are required to give equal weight to the interests of the company, its shareholders, its employees and any other relevant interests. correct incorrect

Where the interests of the company and its shareholders conflict, preference should be given to the interests of the company. correct incorrect

The interests of the company are always the same as the interests of its shareholders. correct incorrect

The duty to promote the success of the company is objective, meaning that what the directors actually believed is irrelevant. correct incorrect

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The duty to promote the success of the company for the benefit of its members requires the directors to have regard to a list of other factors. Which ONE of the following is NOT present on this list found in s 172(1)?

The company's employees. correct incorrect

The likely consequences of any decision in the long-term. correct incorrect

The need to foster the company's business relationships with suppliers, customers and others. correct incorrect

The company's creditors. correct incorrect

The impact of the company's operation on the community and the environment correct incorrect

The need to act fairly as between members of the company correct incorrect

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Directors can never fetter their own discretion. True or false?

True correct incorrect

False correct incorrect

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Which ONE of the following most accurately describes the duty to exercise reasonable care, skill and diligence?

The duty is entirely objective. correct incorrect

The subjective element of the duty applies to all directors. correct incorrect

The objective element applies to all directors, whereas the subjective element only applies to directors who have some special skill or ability. correct incorrect

The duty is entirely subjective. correct incorrect

The subjective element of the duty serves to lower the standard expected of the director. correct incorrect

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Mike is a director of Bluegg plc. While acting for the company, he becomes aware of a business opportunity that the company is unable to exploit. He takes advantage of this opportunity himself and makes a considerable profit. Can Mike keep the profit made?

Yes, providing that the articles allow the directors to authorize the transaction, and they do so prior to Mike entering into it. correct incorrect

No. Directors are never allowed to keep profits made from such transactions. correct incorrect

Yes, providing that the other directors gave prior authorization to Mike entering into the transaction. correct incorrect

Yes, providing that Mike obtains the consent of the company in general meeting. correct incorrect

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Tom is a director of TME Enterprises plc. His wife, Helen, purchases from the company a building costing £250,000. Prior to entering into the transaction, Tom informs the directors of the transaction who, in line with the articles, authorize the purchase. Helen sells the building on for a substantial profit. Is Helen liable to account for this profit?

Yes correct incorrect

No correct incorrect