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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.
Suggested Answer: A
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37 comments · newest first
AN
Anglea
11 months ago
I thought only dividends were enforceable, interesting!
LA
Lavelle
11 months ago
Totally agree, 1 and 2 make sense!
RY
Ryan
11 months ago
Wait, can payment terms for suppliers really be in the articles?
FR
Francoise
12 months ago
I think bonuses for directors can be included too.
DO
Dorsey
12 months ago
Dividend rights are definitely enforceable!
LE
Lettie
12 months ago
I feel like all three could be included, but I remember practice questions where only dividends were emphasized as enforceable.
TH
Theodora
1 year 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.
DO
Dottie
1 year 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.
WE
Weldon
1 year ago
I think dividend rights are definitely enforceable since they relate directly to shareholders' interests.
HO
Hortencia
1 year 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.
LA
Lasandra
1 year 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.
BR
Brice
1 year 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.
SA
Sang
1 year 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.
OL
Olive
2 years 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.
LU
Lucy
2 years ago
D) 1,2 and 3
BE
Bernardo
2 years ago
C) 2 and 3 only
AL
Albina
2 years ago
B) 1 and 2 only
LO
Lorriane
2 years ago
A) 1 only
CA
Carman
2 years 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.
MA
Madalyn
2 years ago
A) 1 only
ES
Esteban
2 years ago
Wait, the company can include terms about bonuses for directors? I need to start my own business ASAP!
OT
Otis
2 years 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.
CA
Carlee
2 years ago
But we also need to consider the impact on suppliers, they are crucial for our operations.
SU
Susy
2 years ago
I agree, keeping the directors motivated is important for the company's success.
TA
Tanja
2 years 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.
AN
Annette
2 years 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.
LY
Lynette
2 years ago
Louisa: So, the correct answer would be B) 1 and 2 only.
WE
Weldon
2 years ago
User 3: But payment terms of suppliers may not be enforceable by and against the company.
LO
Louisa
2 years ago
User 2: I agree, including terms relating to bonuses of directors would also be enforceable.
GE
Germaine
2 years ago
User 1: Dividend rights of the members would definitely be enforceable.
CA
Caprice
2 years ago
Dividend rights for members? That's a no-brainer. It's in the company's interests to keep shareholders happy.
AL
Alton
2 years ago
D) 1,2 and 3
CH
Chanel
2 years ago
C) 2 and 3 only
EL
Eliz
2 years ago
B) 1 and 2 only
LO
Lorriane
2 years ago
A) 1 only
FL
Florinda
2 years 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.
SO
Solange
2 years ago
I think the answer is B) 1 and 2 only.