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BA4 - Fundamentals of Ethics, Corporate Governance and Business Law Questions 166–170 (page: 35)

Updated On: 9-Feb-2026

Z Ltd intends to participate in a "substantial property transaction" with one of its directors. Which of the following is correct in relation to substantial property transactions?

(i) The value of the asset must exceed 10% of the company's net assets and be more than £5,000.

(ii) The transaction must be approved by the shareholders.

(iii) The director must disclose his interest in the transaction.

  1. (i) only
  2. (i) and (ii) only
  3. (i) and (iii) only
  4. (i), (ii) and (iii)

Answer(s): D



Allowing bias, conflict of interest or undue influence of others to override professional or business judgments violates the CIMA Code of Ethics fundamental principle of:

  1. Objectivity
  2. Transparency
  3. Truthfulness
  4. Objection

Answer(s): A



Which of the following is correct?

  1. The shares of all public limited companies are quoted on the Stock Exchange.
  2. The company secretary of a public limited company must be qualified.
  3. A private limited company must have at least two shareholders.
  4. A public limited company cannot trade until it has paid up share capital of at least £50,000.

Answer(s): B



Who is entitled to sue under Section 994 of the Companies Act 2006, which empowers the court to grant a remedy in the event of the company's affairs being conducted in a manner "unfairly prejudicial to the interests of members..."?

  1. Any member.
  2. The holders of at least 10% of the company's issued share capital.
  3. The shareholders as a whole.
  4. The directors.

Answer(s): A



High profile corporate scandals in the past decade have had an effect on which of the following?

  1. Public trust in business
  2. Legislation in the US and elsewhere
  3. Public trust in accountants
  4. All of the above

Answer(s): D



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