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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Dorothea

3 months 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

2 months ago

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

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Rima

2 months ago

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

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Cory

2 months ago

Clause B is definitely important for shareholder participation.

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Reuben

3 months 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

4 months 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

2 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

2 months ago

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

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Jame

3 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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Kayleigh

3 months ago

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

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Dick

3 months ago

A) Shareholders shall be paid dividends in cash.

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Maybelle

3 months ago

A) Shareholders shall be paid dividends in cash.

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Della

4 months 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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