CIMA Exam CIMAPRA17-BA4-1 Topic 4 Question 74 Discussion

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

Question #: 74
Topic #: 4

Which of the following is INCORRECT in relation to directors' duties?

i. Directors who arrange for shares to be offered directly to their supporters in order to prevent a take-over bid are acting lawfully so long as they have the legal power to allot shares in the company's constitution.

ii. Directors may act in breach of their duties and still be complying with the UK Corporate Governance Code.

iii. Directors' duties are owed to the shareholders as a body and enforceable by the company.

A(i) only

B(i) and (ii) only

C(ii) only

D(ii) and (iii) only

Show Suggested Answer

Suggested Answer: B

by Leonida at Sep 03, 2023, 01:57 PM

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Marget

1 months ago

Hmm, I'm not sure about (ii) and (iii). The governance code and shareholder duties can be a bit of a minefield. Better double-check my notes before answering this one.

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Kati

7 days ago

User 3: Yeah, (ii) doesn't sound right. Better make sure before answering.

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Jerry

17 days ago

User 2: I agree, (ii) seems off. They have to follow their duties and the code.

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Kristel

18 days ago

User 1: I think (ii) is incorrect, directors can't breach their duties and still comply with the code.

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Elenore

2 months ago

Haha, this question is a real test of whether you've been paying attention in your corporate law classes. I'd say (ii) and (iii) are the tricky ones - gotta keep those directors on their toes!

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Lindsey

21 days ago

D) (ii) and (iii) only

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Sharita

1 months ago

C) (ii) only

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Ernie

1 months ago

B) (i) and (ii) only

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Adell

1 months ago

A) (i) only

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Aja

2 months ago

Hmm, that's a good point. But I still think option A is the best choice.

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Yuriko

2 months ago

I disagree, I believe option B is correct because directors can still breach their duties while following the UK Corporate Governance Code.

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Ben

2 months ago

I agree, (i) is the wrong answer here. Trying to entrench your position as a director by manipulating the share structure is a big no-no.

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Octavio

1 months ago

User 2

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Vallie

2 months ago

User 1

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Aja

2 months ago

I think option A is correct because directors can allot shares if they have the legal power.

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Albina

2 months ago

Option (i) is clearly incorrect. Arranging a share issue to prevent a takeover is a classic example of directors acting in their own interests rather than the company's. That's a breach of their duties.

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