Read the following and answer the related questions that follow it.

Auric plc is a mining company, whose main business consists of open cast mining. It has Articles of Association that are in the form of model Articles. The board of directors includes Penny, Howard and Emily.

At a recent board meeting, the directors considered an offer from Trek Mines plc to sell land adjoining one of Auric plcs mining sites for 550,000. The board of Auric plc decided that the company should not accept the offer as it doubted whether it could raise the finance needed to buy the land. Penny then formed her own company, Gold Ltd, which purchased the land for 550,000. At the same meeting, the directors discussed a proposed contract with Texas plc, which is being considered to survey a plot of land recently purchased by Auric plc. Howard owns 10% of the shares in Texas plc, but did not reveal his interest at the board meeting.

Emily has an arrangement with Comic plc whereby she receives a 10% commission for all orders placed with it by Auric plc. Six months ago, Auric plc purchased some drilling equipment from Comic plc for 100,000, for which Emily was paid 10,000 commission.

The shareholders of Auric plc have discovered these facts, and they have passed an ordinary resolution directing the board of directors to commence legal proceedings against Penny, Howard and Emily.

1.

Does the duty of skill, care and diligence derive from common law, chancery or equity?

Group of answer choices

Equity

Common law

Chancery

2.

According to Regal v Gulliver it does not make a difference whether the directors act in good faith if there is a conflict of interest.

Group of answer choices

True

False

3.

A director has resigned from their post as a director, this will nullify any interest in the company and permit the director to take up a corporate opportunity which the company could not have obtained.

Group of answer choices

True

False

4.

A person who is held out by a company as a director and performs the duties of a director without actually being validly appointed is a:

Group of answer choices

Shadow director

Non-executive director

Executive director

De facto director

5.

The subjective element of the duty of care, skill and diligence will never allow the standard to fall below the objective standard of the reasonable director.

Group of answer choices

True

False