Quiz 5 January Summer 2021, questions and answers PDF

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Question 1 A financial benefit may be given directly or indirectly, for example, giving or providing finance or property, buying, selling or leasing an asset; and providing or receiving services. Select the most correct answer a. b.

True False

Question 2

Select the most correct answer. Which of the following statements best describe the way the decision making power is divided between members and the directors? a. b. c.

d.

Members have the power to make decisions about all matters other than those expressly reserved to directors by the internal governance rules or company law. The basis on which the decision making powers is divided is determined solely by the solely by the company’s internal governance rules. The board of directors and the members in general meetings are each organ of the company, each has the power to make particular decisions and, with respect to these decisions neither have to follow the instructions of the Directors are the agents or delegates of the members and are therefore subject to the members’ overriding control.

Question 3

Question 4 In the case of Wayde vs New South Wales Rugby League Ltd, The high court of Australia stated that if the director has acted oppressively in breach of section 232 of the corporations act 2001 (cth) then it is not necessary for members bringing the action to prove that the directors acted dishonestly or with the intention of oppressing the member. Select the most correct answer a. b.

True False

Question 5 Select the most correct answer. Which of the following is not an option available to members who disagree with the decisions of the board of directors? a. b. c. d.

Pass a resolution at a member’s meeting overriding the decision of the directors. Pass a resolution at a member’s meeting removing the directors from office. Pass a resolution at a member’s meeting altering the company’s internal governance rules to restrict the power of the directors in the future. Sell their shares.

Question 6

Question 7 Select the most correct answer. Employees of a company: Do not have the same responsibilities as directors regarding use of positions. Have the same duty as directors regarding use of position and information Are liable under corporate law for a lack of diligence and care. Must be managers before taking any liability for their actions

Question 8 A breach of statutory duty under sections 182 and 183 has legal consequences for an officer or the company under the corporations act 2001 (cth). What is the penalty for a breach of sections 182 and 183? Select the most correct answer a) b) c) d) e)

A civil penalty Removal of the director A criminal penalty A fine. A civil penalty and removal of the director.

Question 9 The breach of duty to prevent insolvent trading. (1) Means that the relevant person was aware that the company was insolvent when allowing debt to take place; and (2) Means that the relevant person was suspected that the company might not be able to repay a debt Select the most correct answer. a. b. c.

d.

(1) means that the relevant person was aware that the company was insolvent when allowing the debt to take place. (2) means that the relevant person was suspected that the company might not be able to repay a debt (1) and (2) (1) Means that the relevant person was aware that the company was insolvent when allowing the debt to take place; and (2) Means that the relevant person was suspected that the compay might not be able to repay a debt.) None of the above.

Question 10 Select the most correct answer. The arm’s length rule states that the member approval is not required for benefits given on terms that: 1) It would be reasonable in the circumstance if the public company or entitity and the related party

were dealing at arm’s length. 2) It would be unreasonable in the circumstances if the public company or entity and the related party were dealing at arm’s length. 3) It would be less favourable to the related party. 4) It would be more favourable to the related party. a)only one is correct b)only 1 and 2 are correct. c)only 1 and 3 are correct. d)only 1,3 and 4 are correct. Question 11 Which of the following is not an option available to members who disagree with the decisions of the board of directors? Select the most correct answer a) Pass a resolution at a member’s meeting overriding the decisions of the directors b) Pass a resolution at a member’s meeting removing the directors from office c) Pass a resolution at a member’s meeting altering the company’s internal governance rules to restrict the power of directors in the future. d) Sell their shares Question 12 What is a statutory injunction? An injunction is, 1. 2. 3.

An order of the court requiring a person to do a particular action An order of the court requiring a person to do or to stop doing a particular action A remedy where there is continuing conduct which contravenes the corporations act.

Select the most correct answer a. b. c. d.

Only 1 is the correct answer 1 and 2 are the correct answer 2 and 3 are the correct answer All of the above.

Question 13 Select the most correct answer. Corporate governance describes the way in which the company’s internal rules and law provide: 1. 2. 3. 4.

For responsibility for the decision making to be divided between the company’s members,its board of directors and its executive management. For corporate decisions to be taken and implemented For the exercise by decision makers of their powers to be monitored and reviewed. Incentives for decision-makers to act in the interests of the company.

a.1 and 2 b.1,2 and 3 c.2,3 and 4 d. all of the above Question 14

Select the most correct answer. The business judgement rules determine that a. b. c.

Directors and officers will not be liable if the board agreed with their decision Directors and officers will not be liable where the business decision was fully considered. Directors must be liable for bad business decisions irrespective of the work done in planning the decision

Question 15 Select the most correct answer. Which of the following is not a mechanism that plays an important role in coporate governance? a. b. c. d. e.

The structure of the board Directors’ and officers’ legal duties to the company Corporate financial policy The possibility of a takeover None of the above.

Question 16 Remedies for oppressive conduct are provided under s232 of the corporation act 2001 (cth). Section 232 provides that a court may provide a remedy to a member where the court finds that the: 1. 2. 3.

Conduct of the company’s affairs is contrary to the interest of the member Conduct of the company’s affairs is not contrary to the interest of the member Oppressive conduct is unfairly prejudicial to or unfairly discriminatory against a member or members whether in that capacity or in any other capacity.

Select the most correct answer a) b) c) d)

1 and 2 are correct 2 and 3 are correct 1 and 2 are correct 1 and 3 are correct

Question 17 Select the most correct answer. A nominee director is one who is a person appointed to the represent the interests of a particular group or another person to represent the group or individual interests. True False Question 18 If there is a breach of a criminal penalty provision under the criminal act, who will bring an action against the director or officer of the company? 1. 2. 3. 4. 5.

The company The members ASIC The Australian stock exchange The deputy public prosecutor

Select the most correct answer a. b. c. d.

1 and 4 are correct 1,2 and 5 are correct 2 and 5 are correct 3 and 5 are correct

Question 19 It will not be a breach of general law duties if a director breaches a duty f care and diligence to avoid a conflict of interest. Select the most correct answer. True False Question 20 Some of the remedies for oppression is provided under section 233 of the corporations sct 2001 include: 1. 2. 3. 4.

Winding up the company Modifying or repealing the company’s constitution (if the company has one) Regulate the conduct of the affairs of the company in the future The company may commence or defend specific legal proceedings

Select the most correct answer a. b. c. d.

1 and 2 2 and 3 3 and 4 All of the above

Question 21 The exceptions for member’s approval to giving a financial benefit is provided under section 229 of the corporations act 2001 (cth) does not include a benefit that is given on arms’ length terms under s210; and reasonable remuneration sdhbfsdhfsidhf officers and employees, s 211. Select the most correct answer True False Question 22 The scope of the directors’ power management is determined by section 198A of the Corporations act 2001

(cth). According to s198A: 1.

Directors are ultimately answerable to shareholders

2.

Business of the company is to be managed by, or under the direction of directors

3.

The directors may exercise all the powers of the company except any powers that the act or the company’s constitution requires the company to exercise in general meeting

4.

The directors are authorised to delegate their managerial functions to employees and other persons within the company.

Which of these statements is correct? Select the most correct answer a.only 2 is correct b. only 4 is correct c. 1 and 4 are correct

d. 2 and 3 are correct. Question 23 Select the most correct answer. Related party benefits from a public company can be given: a)

If permitted as an exception under the corporations act 2001 (cth)

b) If all members agree to giving of the benefit c)

As long as there is no breach of s208 such as threats.

d) All of the above Question 25 Circumstances where members have alleged oppressive conduct include: 1.

Diversion of business opportunities

2.

Improper exclusion from management

3.

Unfairly restricting dividends

4.

Oppressive conduct of board meetings

Select the most correct answer 1,2 and 4 2 and 3 1 and 2 1 and 4 All of the above...