gerard fauria
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Topic 4 test

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gerard fauria
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Topic 4

Question 1 of 15

1

Fill the blank spaces to complete the text.

A company's constitution makes the arrangements needed to manage the company's business through vesting power to act for the company in 2 bodies: (control over management) and (background ownership control).
NOTE: write the bodies in PLURAL.

Explanation

Question 2 of 15

1

Directors tend to have more significant autonomy in companies where shareholders are large in number.

Select one of the following:

  • True
  • False

Explanation

Question 3 of 15

2

Which of the followings is the source of the directors' powers?

Select one of the following:

  • Constitution

  • Shareholders

  • Companies Act 2006

Explanation

Question 4 of 15

1

Directors may be trustees of those funds of the company which are under their control.

Select one of the following:

  • True
  • False

Explanation

Question 5 of 15

1

What requirement has to be fulfilled for directors to act informally?

Select one of the following:

  • The company is private

  • Directors are unanimous

  • Act for the benefit of the shareholders as a whole

Explanation

Question 6 of 15

2

After CA 2006, all companies are still required to have a memorandum of association.

Select one of the following:

  • Yes

  • No

Explanation

Question 7 of 15

2

Companies must appoint at least 1 director.

Select one of the following:

  • True
  • False

Explanation

Question 8 of 15

1

Which one of the following is NOT a power exercisable by passing a resolution of the shareholders?

Select one of the following:

  • Change the constitution's name

  • Put the company into voluntary liquidation

  • Increase the company's share capital

  • Authorize a reduction of capital

  • Authorizing a private company to enter into a credit transaction with one of its directors

Explanation

Question 9 of 15

2

What do shareholders of a public company require in order to exercise their powers?

Select one of the following:

  • Pass a resolution at a duly convened meeting or through a written resolution passed in accordance with the provisions set out in CA2006.

  • Pass a special resolution at a duly convened meeting or by unanimity in an informal process

  • Pass a resolution at a duly convened meeting.

  • Pass a written resolution following the procedures established in the company's constitution.

Explanation

Question 10 of 15

1

Shareholders' equitable duty. The burden of proof when there is an alleged breached of this duty is on the Defendant.

Select one of the following:

  • True
  • False

Explanation

Question 11 of 15

1

Courts seem to be reluctant to find a breach of the shareholders' equitable duty, especially when concerning "business judgment". In fact, this duty is likely to be satisfied if at least one of the followings applies:

Select one of the following:

  • The majority honestly believes that an alteration is for the benefit of the company.

  • The alteration does not, in any case, discriminate between majority and minority shareholders.

  • The alteration does not give enhanced voting rights to a particular class of shareholders.

Explanation

Question 12 of 15

1

A company's constitution cannot be supplemented by:

Select one of the following:

  • Constructional implied terms

  • Terms derived from extrinsic circumstances

  • Shareholders' agreements

Explanation

Question 13 of 15

1

When a class right is varied, the minority of this class can appeal to the Court if they constitute at least ... of the total shares of that class.

Select one of the following:

  • 5%

  • 10%

  • 15%

  • 20%

Explanation

Question 14 of 15

2

The ability to alter a company's articles is limited in several ways. Which one of the following is NOT a valid limitation?

Select one of the following:

  • The ability to alter the articles is limited by the Companies Act 2006.

  • An alteration will not be valid if it is not exercised bona fide for the benefit of the company as a whole.

  • The company cannot insert provisions into the articles that have the effect of making it more difficult to alter the articles.

Explanation

Question 15 of 15

3

For this case, think always of general rules. If it's not stated = does not exist/do not need to consider it.
Gerard ltd is a trading company. A and B (both directors) attend a duly convened meeting and decide to nominate a new director, which is later appointed through an ordinary resolution by the shareholders. However, C (the 3rd director) claims he is against such decision and claims an injunction to the court. What is it likely to happen?

Select one of the following:

  • The Court will grant the injunction.

  • The Court will not grant the injunction.

Explanation

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