1. Which one of the following generally has the customary authority to bind the company?

1. Group of answer choices
2. A non-executive director
3. Any individual director
4. The chairperson
5. The managing director

2. The duty of care, skill and diligence contained in s174 was inspired by which offence?

Group of answer choices

1. Wrongful trading (s214(4) IA 1986)
2. Insider dealing
3. Market abuse
4. Fraudulent trading

3. The duty of care, skill and diligence is measured by looking at the objective element - the care, skill and diligence of the reasonable director; and the subjective element looking at the actual director in question's knowledge and experience.

Group of answer choices

True

False

4. Two non-executive directors were found to be negligent in Dorchester Finance v Stebbings this was because :

Group of answer choices

1. A director used two blank cheques handed to him by the two non-executives and he used them to misappropriate funds
2. A director signed two blank cheques handed to him by the two non-executives who used them to misappropriate funds
3. The non-executive directors were accountants and should have known better
4. The non-executive directors were accountants

5. How was the director found negligent in Re D'Jan of London Ltd?

Group of answer choices

1. The form was filled in by his insurance broker and therefore he did not need to check it
2. He didn't check the renewal insurance form before signing it
3. He showed reasonable diligence when he signed the form
4. A director must always read the whole of every document which he signs

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

1. Group of answer choices
2. Equity
3. Common law
4. Chancery

7. 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

8. 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

9. 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:

1. Group of answer choices
2. Shadow director
3. Non-executive director
4. Executive director
5. De facto director

10. 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