Multiple choice questions

1.The common law aligns the best interests of the company with:

The individual best interests of shareholders

The best interests of the creditors

The best interests of the members as a whole

The best interests of directors who are managing the company

2.An auditor can be removed by:

Resolution of a non-listed company at general meeting provided at least 21 days notice has been given to members

A new auditor being appointed the impact of which cancels the first auditor's appointment and audit contract

A liquidator who has been appointed to wind up the company

ASIC after they appoint a new auditor

3.For companies limited by shares who must report annually to members, the Corporations Act requires that the members receive:

A profile statement, directors' report and auditor's report

A concise financial report and a concise auditor's report

A short form prospectus

A financial report, directors' report and auditor's report

4.Insider trading is prohibited by the Corporations Act. "Inside information" means information that is:

Available to every person dealing with Division 3 financial products which would have no material effect on the price or value of particular Division 3 financial products

Contained in the Directors' Report produced in compliance with s298(1).

Not generally available or is if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of particular Division 3 financial products

Gossip which is publicly available and would have no material effect on the price or value of particular Division 3 financial products

5.The business judgment rule in s180(2) requires a judgment that is in the best interests of the corporation and is defined as:

Any decision that involves an action in respect of an international transaction relevant to the business operations of the corporation

A contract which requires the company's common seal

A resolution that is passed at a directors' meeting

Any decision to take or not to take an action in respect of a matter relevant to the business operations of the corporation