CIMA Exam CIMAPRA17-BA4-1 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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21 days ago

Clause C is definitely not enforceable. Appointing a managing director for life is an unreasonable restriction on the company's management.

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Lettie

3 days ago

I think clause D would also not be enforceable because it restricts shareholders' ability to sell their shares freely.

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Joseph

26 days ago

I think clause C would not be enforceable.

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