CIMAPRA17-BA4-1 Exam - Topic 1 Question 107 Discussion

Actual exam question for CIMA's CIMAPRA17-BA4-1 exam

Question #: 107
Topic #: 1

X is in the process of setting up a private company limited by shares X is considering including certain provisions in the articles of association. Which of the following provisions would be enforceable by and against the company?

1 Dividend rights of the members

2. Terms relating to bonuses of directors

3. Payment terms of suppliers.

A1 only

B1 and 2 only

C2 and 3 only

D1,2 and 3

Show Suggested Answer

Suggested Answer: A

by Dominque at Feb 08, 2025, 01:41 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRA17-BA4-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Anglea

4 months ago

I thought only dividends were enforceable, interesting!

upvoted 0 times

...

Lavelle

5 months ago

Totally agree, 1 and 2 make sense!

upvoted 0 times

...

Ryan

5 months ago

Wait, can payment terms for suppliers really be in the articles?

upvoted 0 times

...

Francoise

5 months ago

I think bonuses for directors can be included too.

upvoted 0 times

...

Dorsey

5 months ago

Dividend rights are definitely enforceable!

upvoted 0 times

...

Lettie

6 months ago

I feel like all three could be included, but I remember practice questions where only dividends were emphasized as enforceable.

upvoted 0 times

...

Theodora

6 months ago

Payment terms for suppliers seem more like a contract issue, so I’m not sure if they would be enforceable by the company itself.

upvoted 0 times

...

Dottie

6 months ago

I'm not so sure about the bonuses for directors. I remember something about them needing to be in line with company policy to be enforceable.

upvoted 0 times

...

Weldon

6 months ago

I think dividend rights are definitely enforceable since they relate directly to shareholders' interests.

upvoted 0 times

...

Hortencia

6 months ago

This is a tricky one. I'm not entirely sure about the enforceability of these provisions, but I think the key is to focus on what's internal to the company versus external. Dividend rights and director bonuses seem more likely to be enforceable, while payment terms for suppliers are probably not. I'll have to think about this a bit more.

upvoted 0 times

...

Lasandra

6 months ago

Okay, I think I've got this. Dividend rights and director bonuses are definitely enforceable, as they relate to the internal governance of the company. But payment terms for suppliers would not be enforceable, as that's an external contractual matter. I'll go with option B.

upvoted 0 times

...

Brice

6 months ago

Hmm, I'm a bit unsure about this one. Dividend rights and director bonuses seem like they would be enforceable, but I'm not sure about the payment terms for suppliers. I'll have to think this through more carefully.

upvoted 0 times

...

Sang

6 months ago

This seems like a straightforward question on the enforceability of provisions in a company's articles of association. I'll need to carefully review the options and think through which ones would be enforceable.

upvoted 0 times

...

Olive

1 year ago

Payment terms for suppliers? Good luck getting them to agree to that. Unless the company is offering a 'free lollipop with every invoice' deal.

upvoted 0 times

Lucy

1 year ago

D) 1,2 and 3

upvoted 0 times

...

Bernardo

1 year ago

C) 2 and 3 only

upvoted 0 times

...

Albina

1 year ago

B) 1 and 2 only

upvoted 0 times

...

Lorriane

1 year ago

A) 1 only

upvoted 0 times

...

Carman

1 year ago

Payment terms for suppliers? Good luck getting them to agree to that. Unless the company is offering a 'free lollipop with every invoice' deal.

upvoted 0 times

...

Madalyn

1 year ago

A) 1 only

upvoted 0 times

...

Esteban

1 year ago

Wait, the company can include terms about bonuses for directors? I need to start my own business ASAP!

upvoted 0 times

...

Otis

1 year ago

Hmm, I'd go with 1 and 2 only. The company has to keep its directors motivated, but the suppliers might not be too happy about that payment clause.

upvoted 0 times

Carlee

1 year ago

But we also need to consider the impact on suppliers, they are crucial for our operations.

upvoted 0 times

...

Susy

1 year ago

I agree, keeping the directors motivated is important for the company's success.

upvoted 0 times

...

Tanja

1 year ago

I'm not sure about that. I think the answer might be D) 1, 2 and 3. Payment terms of suppliers could also be enforceable by and against the company.

upvoted 0 times

...

Annette

1 year ago

Bonuses for directors? I bet they'd love that one! Though I'm not sure the suppliers would be too thrilled about the payment terms.

upvoted 0 times

Lynette

1 year ago

Louisa: So, the correct answer would be B) 1 and 2 only.

upvoted 0 times

...

Weldon

1 year ago

User 3: But payment terms of suppliers may not be enforceable by and against the company.

upvoted 0 times

...

Louisa

1 year ago

User 2: I agree, including terms relating to bonuses of directors would also be enforceable.

upvoted 0 times

...

Germaine

1 year ago

User 1: Dividend rights of the members would definitely be enforceable.

upvoted 0 times

...

Caprice

1 year ago

Dividend rights for members? That's a no-brainer. It's in the company's interests to keep shareholders happy.

upvoted 0 times

Alton

1 year ago

D) 1,2 and 3

upvoted 0 times

...

Chanel

1 year ago

C) 2 and 3 only

upvoted 0 times

...

Eliz

1 year ago

B) 1 and 2 only

upvoted 0 times

...

Lorriane

1 year ago

A) 1 only

upvoted 0 times

...

Florinda

1 year ago

I agree with Solange. Dividend rights of the members and terms relating to bonuses of directors should be enforceable by and against the company.

upvoted 0 times

...

Solange

1 year ago

I think the answer is B) 1 and 2 only.

upvoted 0 times

...