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Chapter 1

COMLAW 203 Chapter Notes - Chapter 1: Financial Statement, Golden Handshake

Commercial Law
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13. Which of the following statements about section 161 of the Companies Act 1993
is not correct?
1. By using the section 107 procedure, shareholders are able to transfer funds
from an insolvent company to its directors, since there is no requirement to
certify that the payment is fair to the company. (only applies to solvent
2. The section 107 procedure can be used to ensure that the details of the
remuneration need not be recorded in the interests’ register. (animous asset
don’t have to apply procedure)
3. Section 161 allows a non-executive director to be paid more than an executive
director, even though the latter does more work.
4. A director who wrongly signs a certificate, stating that a payment is fair to the
company may potentially be allowed to retain most of the payment. (165
contain extent that’s fair so can retain payment, can attain most of it that is
Animous assent covers 161
N/a 14 question
Which of the following statements is correct regarding the definition of “director” in
section 126(1)(a) of the Companies Act 1993?
1. It is distinct from the other definitions in section 126 in that it only covers
“true directors” i.e. those properly appointed and not disqualified. (not correct)
2. A director so defined will not be a director for all purposes, only for the
purposes of the sections listed in section 126(1)(b).
3. It is wide enough to catch directors who are not properly appointed. (can come
under definition)
4. It is so wide that even an undischarged bankrupt can be appointed as a
Following the recent amendments to Part 11 of the Companies Act 1993, what areas
of law are not contained in that Part?
1. The basic rights of auditors.
2. The basic duties of auditors.
3. The requirement to keep accounting records.
4. The requirement of a company to be audited.
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