X, Y and Z are the only shareholders in XYZ Ltd each holding 1,000 ordinary £1 shares. X is the only director of the company. The articles of association of XYZ Ltd provide that "in the event of any proposal to dismiss a director by ordinary resolution, the votes of the director are to count 3 times." Which ONE of the following is CORRECT?

• A.X will be able to rely on the provision in the articles and outvote any proposal to dismiss him as a director.
• B.The clause in the articles cannot be used by X as it is not an ordinary membership right.
• C.The provision in the articles is void as it effectively means that X is irremovable as a director of XYZ Ltd.
• D.The company would be able to pass a special resolution removing the provision in the articles and then dismiss X by passing an ordinary resolution.

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The directors of Zed Ltd issued a number of shares to their supporters, so that they would vote against a takeover bid by Exe Ltd.
Which of the following statements is INCORRECT?

• A.If the shares were issued for cash, they should have first been offered to the existing members in proportion to their current shareholding unless statutory pre-emption rights have been dis-applied.
• B.If the shares were issued for a non-cash consideration, they were not subject to the statutory pre- emption rights of shareholders unless the articles of association so provided.
• C.If the directors had the legal authority to issue shares, the issue cannot be challenged by the shareholders.
• D.The share issue is voidable and the original shareholders may ratify or cancel the issue by ordinary resolution.

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Which of the following is CORRECT?
(i) A company registered today may restrict its ability to contract by including a provision to that effect in its articles of association.
(ii) A company which was registered before the Companies Act 2006 came into force may pass a special resolution to remove its objects clause from its memorandum of association.
(iii) If the directors ignore any restriction on the company's ability to contract they may be sued for breach of duty by the company.

• A.(ii) only
• B.(i), (ii) and (iii)
• C.(i) and (iii) only
• D.(i) only

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You work for a company that designs and manufactures children's toys. Which of the following is NOT an example of social responsibility that your company might choose to address?

• A.The environmental impact of transporting toys from the country of manufacture to the country of sale
• B.Whether the recommended retail price of a particular product provides sufficient margin after the unit cost of production is taken into account
• C.The use of chemicals in manufacturing
• D.The welfare of workers who assemble the company's products

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Andrea is completing an audit on the finance department for a medium-sized company. In her report she makes note of the fact that her audit was severely limited due to her being unable to access many of the department's documents.
Because of this and a number of other things she's discovered whilst conducting her audit, she thinks fraudulent activity might have been taking place within the department.
However, Andrea knows that it is not the business of auditors to seek out fraud.
What should she do?

• A.There's nothing she can do - it's not the business of auditors to deal with matters concerning fraud.
• B.Detail her suspicions in the 'emphasis of matter' section in the audit report.
• C.Issue a disclaimer of opinion.
• D.Report her suspicions to the company's senior management.

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