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If a company has restricted the ability of its directors to contact and the directors ignore the restrictions, then the outsiders may not enforce the contract.

The shareholders of a company have the ability to enter into a contract on behalf of the company, irrespective of any restrictions on the directors.

If a company wishes to restrict the ability of its directors to enter into particular contracts it may do so by placing restrictions on the directors in its

articles of association

If the shareholders learn that the directors are about to ignore the restrictions placed upon their ability to contract by the company the shareholders are unable to prevent the directors from proceeding

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Question 2

You are the financial controller of SB Company, responsible for directing the budgeting process For the current year, you were instrumental in gaming approval of a particular manager's budget without modification. As a token of appreciation, the manager has given you a gift voucher for a local restaurant In considering whether or not to accept the gift, you should refer to which of the following fundamental ethical principles?

Options:

Professional competence

Credibility

Integrity

Professional behavior

Question 3

Which of the following is correct?

(i) All courts below the Supreme Court may refer a case involving European Law to the European Court of Justice for a preliminary ruling.

(ii) The Supreme Court must refer a case involving European Law to the European Court of Justice for a preliminary ruling.

(iii) An English court is not bound to give effect to a preliminary ruling of the European Court of Justice.

Options:

(i) and (ii) only

(ii) and (iii) only

(iii) only

(i) and (iii) only

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Fundamentals of Ethics, Corporate Governance and Business Law Questions and Answers

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