Q4 Which of the following is NOT one of the requirements that must be satisfied before a director can rely on section 187 of the Corporations Act 2001 (Cth) to avoid liability for breach of the duty to act in the best interests of the company?

Group of answer choices

a The company is not insolvent at the time the director acts and does not become insolvent because of the director's act.

b The director acts in good faith in the best interests of the parent company.

c The constitution of the company expressly authorises the director to act in the best interest of the parent company.

d The company is a subsidiary company of several corporate bodies with no controlling interest in the subsidiary.

Q5 The purpose of putting a company into voluntary administration is to create a temporary safety zone from creditors' claims, so that the administrator can review the company's situation and make a recommendation to creditors as to the best way forward. However, there are a few exceptions to the moratorium on enforcement action by creditors during the period that a company is under the control of an administrator. Which of the following is one of those exceptions?

a Provided they started legal action against the company before the administrator was appointed, a creditor can continue to pursue that action in court during the period of administration.

b During the period of administration a creditor can apply to the court to have the company wound up, and the creditor does not need anyone's permission to do so.

c If a director has given a personal guarantee for a loan to the company, a creditor can enforce that guarantee during the period of administration.

d Within the first 13 business days after notice is given of the administrator's appointment, a secured creditor can enforce their security interest provided it is over the whole (or substantially the whole) of the company's property.