Question
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.
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.Given the facts in the above scenario it may be that there has been a breach of the duty set out in s.172 of the Companies Act 2006.
Who do you feel has breached their duty? Tick all that apply
Group of answer choices
Emily
Penny
Howard
All the directors, Penny, Howard and Emily
2. The relevant duty contained in s175 CA 2006, states that: 'A director of a company must avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company.
Which director do you feel has breached this duty?
Group of answer choices
Howard
All of the directors
Emily
Penny
3. Under s177 CA 2006, if a director has a direct or indirect interest in a proposed contract with the company, he has a duty to declare both the nature and extent of his interest to the other directors. This can be done either at a board meeting or by notice in writing or by giving a general notice.
Which director do you feel has breached this duty?
Group of answer choices
All the directors
Howard
Penny
Emily
4. CA 2006, s176 is the duty not to accept benefits from third parties by reason of being a director or doing anything as a director.
Which director do you feel has breached this duty?
Group of answer choices
Howard
Penny
Emily
All of the directors
5. What is a quorum?
Group of answer choices
A person who votes on behalf of an absent natural person membe
The minimum number of members who must be present at a members meeting to properly conduct business
The number of members required to pass a special resolution.
The minimum number of members who must be present at a members meeting to properly conduct business which is set at 5 throughout the meeting under the legislation
6. Which of the following powers are generally conferred upon the board of directors
through the companys internal rules?
Group of answer choices
Management power and the power to create/amend the internal rules
Power to issue shares and power to remunerate directors
Management power and the power over share transfers
Power over share transfers and the power to create/amend the internal rules
7. What terminology would you use to define a director of a company who is an officer of a
financial institution who has lent money to the company?
Group of answer choices
Non-executive director
Nominee director
Managing director
Alternate director.
8. Which of the following statement is correct?
Group of answer choices
An executive director is the head of all other directors
An executive director is a person appointed by a director to act in her or his place for a period of time
An executive director is a part-time director of the company who is not an employee
An executive director is both on the board of directors and a full-time employee of the company
9 Which of the following cases established the indoor management rule?
Group of answer choices
Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd
Royal British Bank v Turquand
Freeman v Lockyear v Buckhurst Park Properties (Mangal) Ltd
Northside Developments Pty Ltd v Registrar-General
10. Which of the following is not a type of authority given to an agent?
Group of answer choices
Express actual authority
Apparent authority.
Implied express authority
Implied actual authority
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