CIMAPRA17-BA4-1 Exam - Topic 7 Question 105 Discussion

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

Question #: 105
Topic #: 7

Exe Ltd includes the following provisions in its Articles of Association. If Exe Ltd acted in breach of these clauses, identify which would not be enforceable against the company as a breach of contract.

AShareholders shall be paid dividends in cash.

BAll shareholders are entitled to attend and vote at general meetings of the company.

CTom (a shareholder) shall be the company's managing director for life.

DShareholders wishing to sell their shares shall offer them to the company which will purchase them at a fair price as determined by the auditors.

Show Suggested Answer

Suggested Answer: B

by King at Jan 09, 2025, 12:15 AM

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Ryan

6 months ago

D is interesting, but how do you determine a "fair price"?

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Starr

6 months ago

A sounds solid, but B is just standard practice, right?

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Frederick

6 months ago

Wait, are you sure about C? Seems a bit harsh to just dismiss it.

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Huey

7 months ago

I agree, C is a no-go. Can't tie someone down like that.

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Ines

7 months ago

C is definitely not enforceable. Lifelong contracts are tricky!

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Rosina

7 months ago

The clause about selling shares seems tricky too. I recall a practice question where the company had to follow specific procedures for share buybacks.

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Chan

7 months ago

I’m not entirely sure, but I feel like the dividend payment clause could be enforceable since it relates to shareholder rights.

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Beckie

8 months ago

I think the clause about Tom being the managing director for life could be problematic. It seems too absolute and might not hold up.

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Sharita

8 months ago

I remember discussing how certain provisions might not be enforceable, especially if they conflict with company law.

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Alline

8 months ago

This is a tricky one. I'll need to be really careful in my analysis to make sure I don't overlook any important details. Gotta stay focused and not get tripped up.

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Elvis

8 months ago

Okay, let's think this through step-by-step. First, I need to identify the key legal principles around the enforceability of articles of association clauses. Then I can apply those to each of the provisions given in the question.

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Jolene

8 months ago

Hmm, I'm a bit unsure about this one. I'll need to review the relevant laws and principles around the enforceability of articles of association provisions. Gotta make sure I don't miss anything.

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Natalie

8 months ago

This question seems straightforward, I think I can handle it. I'll need to analyze each provision and determine which one would not be enforceable against the company.

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Dorothea

1 year ago

Clause B about shareholder voting rights sounds pretty standard, but Clause C is just asking for trouble. The company will be stuck with Tom whether he's good or not.

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Billi

11 months ago

Yeah, having a clause like that could really limit the company's options in the future.

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Rima

11 months ago

I agree, but Clause C seems risky. What if Tom is not a good managing director?

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Cory

12 months ago

Clause B is definitely important for shareholder participation.

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Reuben

1 year ago

Haha, can you imagine Tom as the company's MD for life? I bet he's already planning his retirement villa on a private island.

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Mattie

1 year ago

Clause A about paying dividends in cash is reasonable, but Clause C is just absurd. The company can't be bound to a managing director for life!

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Annmarie

12 months ago

D) Shareholders wishing to sell their shares shall offer them to the company which will purchase them at a fair price as determined by the auditors.

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Armanda

12 months ago

B) All shareholders are entitled to attend and vote at general meetings of the company.

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Jame

1 year ago

D) Shareholders wishing to sell their shares shall offer them to the company which will purchase them at a fair price as determined by the auditors.

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Kayleigh

1 year ago

B) All shareholders are entitled to attend and vote at general meetings of the company.

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Dick

1 year ago

A) Shareholders shall be paid dividends in cash.

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Maybelle

1 year ago

A) Shareholders shall be paid dividends in cash.

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Della

1 year ago

I think Clause D could also be unenforceable. Forcing shareholders to sell their shares to the company at a price determined by the auditors seems too restrictive.

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