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1Which of the following is not one of the possible consequences of a director breaching a statutory duty?

Select one:

a.The director may be sent to prison for up to fifteen years.

b.The director may be ordered to pay compensation to the other directors.appointed as a director.

c.The director may be ordered to pay a financial penalty.

d.The director may be disqualified from managing companies for a specified period.

2Which of the following statements regarding the statutory business judgment rule isNOTtrue?

Select one:

a.The introduction of the statutory business judgment rule reflects the view that duties imposed on directors must achieve a balance between ensuring that directors act in the interests of the company as a whole and not inhibiting them from making good faith decisions that will generate profits.

b.If the company has made a financial loss on a transaction, the directors cannot use the statutory business judgment rule.

c.The first detailed consideration of the statutory business judgment rule by a court was in Australian Securities and Investments Commission v Rich (2009).

d.It only applies to the duty of care.

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3.Which of the following isNOTone of the elements of the duty to prevent insolvent trading?

Select one:

a.The person is a director of the company at the time the company incurs a debt.

b.When it incurs the debt there are reasonable grounds for suspecting that the company is insolvent, or would become insolvent, because it incurs the debt.

c.The company is insolvent when it incurs the debt or becomes insolvent because it incurs the debt.

d.The director is aware at the time the debt is incurred that the company is insolvent when it incurs the debt or becomes insolvent because it incurs the debt.

4.Does the Corporations Act 2001 (Cth) provide any defences to breach of the duty to prevent insolvent trading?

Select one:

a.Yes, four defences are provided in s 588H.

b.Yes, there are four defences in the Act: two for directors of public companies and two for directors of proprietary companies.

c.Yes, two defences are provided in s 588G.

d.No, there are no defences.

5.Section 181 of the Corporations Act 2001 (Cth) requires directors and officers:

A. To act in good faith.

B. To act diligently.

C. To act in the best interests of the company.

D. To act for a proper purpose.

Which of these statements is correct?

Select one:

a.B, C and D.

b.A, C and D.

c.A, B and C.

d.A and B.