multiple choice questions

1.A non-executive directors' standard of care is tested against:

Their length of experience to acquire their knowledge and expertise

Other persons with the same skill and expertise

A published standard issued by ASIC

The executive directors' knowledge and experience

2.In voluntary administration, the second meeting of creditors (s439A(1)) can pass a resolution to:

Execute a DOCA, commence a winding up or end the administration

Appoint a receiver and manager for the benefit of all creditors

Transfer the administration to a foreign court to hear

Appoint a voluntary administrator to investigate the affairs of the company

3.The concept of oppression is explained by the case law. Sanford v Sanford Courier Service Pty Ltd (1986) is an example of oppression based upon:

Increased directors' remuneration and failure to review the company's policy on dividends

Denying a corporate opportunity and denial of dividends

The directors using company assets to benefit themselves and decreasing their value

Oppression from the majority by excluding the member from profits as the company diverted business to the majority's other companies, denying dividends and the loss of directors' fees

4.One of the steps to be satisfied in s588G is that the company be insolvent at the time of incurring the debt, or becomes insolvent by incurring that debt, or by incurring at that time debts including that debt. Insolvency is defined as:

An excess of liabilities over assets

Contingent debts being greater than or equal to non-contingent debts

Having no cash in the bank and not owning any assets

Being unable to pay debts as and when they fall due

5.In ASIC v Vines, the defendant was a director and Chief Financial Officer. When establishing the standard of care for Mr Vines the test was:

Whether Mr Vines had acted in the same manner as any other non-executive officer

Whether Mr Vines as Chair of the board had acted in the same manner as a Chair of a board of a similar company who had similar expertise

Whether Mr Vines had completed all his compulsory professional development required by him as a member of an accounting professional body

Whether Mr Vines had acted in the way that a reasonably competent Chief Financial Officer would have done