Which of the following statements most accurately summarises the legal principle behind Duty 4 - Duty to act in good faith and in the best interest of the company: Select one: a. Directors only owe a duty to the company’s creditors if the company is nearing insolvency b. Directors who suspect that the company is nearing insolvency, owe a duty to unsecured creditors c. While the company is solvent, directors owe a duty to majority shareholders d. While insolvent, the directors act in the best interest of the company – only now, the company’s interest is to minimise harm to creditors
Which of the following statements most accurately summarises the legal principle behind Duty 4 - Duty to act in good faith and in the best interest of the company: Select one: a. Directors only owe a duty to the company’s creditors if the company is nearing insolvency b. Directors who suspect that the company is nearing insolvency, owe a duty to unsecured creditors c. While the company is solvent, directors owe a duty to majority shareholders d. While insolvent, the directors act in the best interest of the company – only now, the company’s interest is to minimise harm to creditors
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which of the following statements most accurately summarises the legal principle behind Duty 4 - Duty to act in good faith and in the best interest of the company:
Select one:
a. Directors only owe a duty to the company’s creditors if the company is nearing insolvency
b. Directors who suspect that the company is nearing insolvency, owe a duty to unsecured creditors
c. While the company is solvent, directors owe a duty to majority shareholders
d. While insolvent, the directors act in the best interest of the company – only now, the company’s interest is to minimise harm to creditors
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