Chapter 5 Multiple choice questions

. Which ONE of the following statements is true?

Only persons who have purchased shares can become members.

A person can be a shareholder, but may not necessarily be a member.

A public company has shareholders whereas a private company has members.

There is no difference at all – a shareholder is always a member and vice versa.

. Members exercise considerable decision-making power via the passing of resolutions. Which ONE of the following is not a power exercisable by passing a resolution of the members?

Authorizing a private company to enter into a credit transaction with one of its directors.

The removal of a director.

The alteration of the articles.

Converting from a private company to a public company.

Converting from an unlimited company to a private limited company.

. What is an 'ordinary resolution?'

A resolution that is passed by 50 per cent or more of the members.

A resolution that is passed by a majority of not less than 75 percent.

A resolution that is passed if 100 per cent of the members agree.

A resolution that is passed by a simple majority.

. Regarding written resolutions, which ONE of the following statements in true?

The members of a private company can request a written resolution, providing they hold a minimum of 10 per cent of the total voting rights in the company.

In order to pass a written resolution, unanimity is required.

The written resolution procedure cannot be used to remove an auditor before the expiry of his office.

The written resolution procedure can be used by both public and private companies.

If the company has a share capital, each member gets one vote.

. Only the directors have the power to call a general meeting. True or false?

True

False

. What is the notice period for the annual general meeting of a public company?

Twenty-one clear days.

Twenty-one clear days, unless the articles provide for a longer period.

Fourteen clear days.

Fourteen clear days, unless the articles provide for a longer period.

. What is a 'quorum?'

The minimum number of 'qualifying persons' required in order to validly conduct business.

A meeting that lacks a chairman.

The maximum number of persons who may attend a meeting.

A meeting that is invalid because sufficient notice has not been provided.

. The general rule is that, at company meetings, each member has one vote per share. True or false?

True

False

. Are all companies required to hold an annual general meeting (AGM)?

Both public and private companies are required to hold an AGM.

Both public and private companies are required to hold an AGM, but private companies can opt out of this requirement.

Only public companies are required to hold an AGM, but they can opt out of this requirement.

Only public companies are required to hold an AGM.

. What is a 'proxy?'

A person appointed, on behalf of a member, to attend, speak and/or vote at a general meeting on the member's behalf.

A member who appoints another person to attend, speak and vote at a general meeting on his behalf.

A member who has agreed not to use the votes attached to his shares.

A director of a company who owns shares in that company.

. The Duomatic principle states that any decision can be taken without a meeting if all of the members agree to it. True or false?

True

False

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