Chapter 10 Self-test questions

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. The duties found in ss 161-177 of the CA 2006 are referred to in the Act as?

Codified duties correct incorrect

General duties correct incorrect

Statutory duties correct incorrect

Executive duties correct incorrect

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. Identify which one of the following statements is untrue.

The general duties are owed by a director to the company correct incorrect

The general duties can be owed by persons who are not directors correct incorrect

Only directors owe general duties correct incorrect

The general duties can apply to shadow directors correct incorrect

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. A breach of duty can be avoided in several ways. Which one of the following methods will not generally be effective?

A provision in the articles excluding a director's liability for breach of duty correct incorrect

Where the members provide authorisation for the directors' breach correct incorrect

Where the director's breach is ratified. correct incorrect

Where the director is granted relief by the court. correct incorrect

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. Section 171 contains two duties. Identify these two duties.

To promote the success of the company correct incorrect

To exercise powers only for the purposes for which they are conferred correct incorrect

To act with reasonable care and skill correct incorrect

To promote the success of the company correct incorrect

To disclose an interest in any transaction involving the company correct incorrect

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

To avoid conflicts of interest correct incorrect

To act in accordance with the instructions of the members correct incorrect

To act with independent judgment correct incorrect

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. The duty to exercise powers for the purposes for which they are conferred is subject to a four-part test. Which one of the following is not a part of this test?

The court will determine the proper purpose for which the power was delegated to the directors correct incorrect

The court will decide whether the purpose for which the power was exercised, was proper correct incorrect

The court will determine what power is being exercised correct incorrect

The court will determine whether there were more proper purposes than improper purposes correct incorrect

The court will determine the substantial purpose for which the power was in fact exercised correct incorrect

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. The duty imposed by s 172 of the CA 2006 is entirely subjective.

True correct incorrect

False correct incorrect

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. The s 172(1) duty requires directors to 'have regard' to a range of factors. Which one is not a factor listed in s 172(1)?

The need to foster business relationships with suppliers, customers and others correct incorrect

The interests of the company's creditors correct incorrect

The desirability of the company maintaining a reputation for high standards of business conduct correct incorrect

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

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

The interests of the company's employees correct incorrect

The impact of the company's operations of the environment correct incorrect

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. Section 173 requires a director to be independent. True or false?

True correct incorrect

False correct incorrect

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. Regarding the s 174 duty, which one of the following statements is correct?

The s 174 duty imposes a subjective test correct incorrect

The s 174 duty imposes an objective test correct incorrect

The s 174 imposes a subjective and objective test correct incorrect

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. A director who takes no part in the company's business cannot be found liable for breach of s 174

True correct incorrect

False correct incorrect