Read the following and answer the related questions that follow it. Auric plc is a mining company,...

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Accounting

Read the following and answer the related questions that followit.
Auric plc is a mining company, whose main business consists ofopen cast
mining. It has Articles of Association that are in the form ofmodel Articles. The
board of directors includes Penny, Howard and Emily.
At a recent board meeting, the directors considered an offerfrom Trek Mines
plc to sell land adjoining one of Auric plc’s mining sites for£550,000. The
board of Auric plc decided that the company should not accept theoffer as it
doubted whether it could raise the finance needed to buy the land.Penny then
formed her own company, Gold Ltd, which purchased the land for£550,000. At
the same meeting, the directors discussed a proposed contract withTexas plc,
which is being considered to survey a plot of land recentlypurchased by Auric
plc. Howard owns 10% of the shares in Texas plc, but did not revealhis interest
at the board meeting.

Emily has an arrangement with Comic plc whereby she receives a10%
commission for all orders placed with it by Auric plc. Six monthsago, Auric plc
purchased some drilling equipment from Comic plc for £100,000, forwhich
Emily was paid £10,000 commission.
The shareholders of Auric plc have discovered these facts, andthey have
passed an ordinary resolution directing the board of directors tocommence
legal proceedings against Penny, Howard and Emily.
1.
Does the duty of skill, care and diligence derive from commonlaw, chancery or equity?
Group of answer choices
Equity
Common law
Chancery
2.
According to Regal v Gulliver it does not make a differencewhether the directors act in good faith if there is a conflict ofinterest.
Group of answer choices
True
False
3.
A director has resigned from their post as a director, this willnullify any interest in the company and permit the director to takeup a corporate opportunity which the company could not haveobtained.
Group of answer choices
True
False
4.
A person who is held out by a company as a director and performsthe duties of a director without actually being validly appointedis a:
Group of answer choices
Shadow director
Non-executive director
Executive director
De facto director
5.
The subjective element of the duty of care, skill and diligencewill never allow the standard to fall below the objective standardof the reasonable director.
Group of answer choices
True
False

Answer & Explanation Solved by verified expert

3.6 Ratings (388 Votes)

1 It is common law Explanation Many duties are thrusted upon the Directors of Company These duties come to light frist come from two particular sources statute and common law The responsibilities are laid down under common law can be sumed up into three main principles i Directors must act in honest faith and in the scrutiny of the company as a whole ii Directors are not authorized to make an unrevealed profit from their bearings as directors and should report any profit which they in secret derived from their stance as a director and iii Directors are required to convey out See Answer

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Read the following and answer the related questions that followit.Auric plc is a mining company, whose main business consists ofopen castmining. It has Articles of Association that are in the form ofmodel Articles. Theboard of directors includes Penny, Howard and Emily.At a recent board meeting, the directors considered an offerfrom Trek Minesplc to sell land adjoining one of Auric plc’s mining sites for£550,000. Theboard of Auric plc decided that the company should not accept theoffer as itdoubted whether it could raise the finance needed to buy the land.Penny thenformed her own company, Gold Ltd, which purchased the land for£550,000. Atthe same meeting, the directors discussed a proposed contract withTexas plc,which is being considered to survey a plot of land recentlypurchased by Auricplc. Howard owns 10% of the shares in Texas plc, but did not revealhis interestat the board meeting.Emily has an arrangement with Comic plc whereby she receives a10%commission for all orders placed with it by Auric plc. Six monthsago, Auric plcpurchased some drilling equipment from Comic plc for £100,000, forwhichEmily was paid £10,000 commission.The shareholders of Auric plc have discovered these facts, andthey havepassed an ordinary resolution directing the board of directors tocommencelegal proceedings against Penny, Howard and Emily.1.Does the duty of skill, care and diligence derive from commonlaw, chancery or equity?Group of answer choicesEquityCommon lawChancery2.According to Regal v Gulliver it does not make a differencewhether the directors act in good faith if there is a conflict ofinterest.Group of answer choicesTrueFalse3.A director has resigned from their post as a director, this willnullify any interest in the company and permit the director to takeup a corporate opportunity which the company could not haveobtained.Group of answer choicesTrueFalse4.A person who is held out by a company as a director and performsthe duties of a director without actually being validly appointedis a:Group of answer choicesShadow directorNon-executive directorExecutive directorDe facto director5.The subjective element of the duty of care, skill and diligencewill never allow the standard to fall below the objective standardof the reasonable director.Group of answer choicesTrueFalse