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CIMA BA4 Exam Syllabus Topics:

CIMA Fundamentals of Ethics - Corporate Governance and Business Law Sample Questions:

Question 1

R, S and T are the only shareholders in RST Ltd each holding 5,000 ordinary £1 shares. R is the only director of the company. The articles of association of RST contain the following provisions:
1. R is to be a director of RST Ltd for life.
2. In the event of any resolution to dismiss R by ordinary resolution his votes shall count three times.
Which of the following is CORRECT?
(i) Provision 1 is void as a director cannot be appointed for a period exceeding 3 years.
(ii) Provision 2 is valid and R may outvote any proposed resolution to dismiss him.
(iii) Provisions 1 and 2 are both unenforceable by R as they are not ordinary membership rights.

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

Question 2

Which of the following contracts might be specifically enforceable?

A. C has contracted to buy a new Ford motor car but the garage is now refusing to honor the contract.
B. D has contracted to purchase a number of tins of fruit for her business but the seller has now stated that he no longer wishes to proceed with the contract.
C. E has contracted to sing at a concert organized by F, but E has withdrawn as he has received a more lucrative offer from G.
D. A has contracted to sell his house to B but has changed his mind and no longer wishes to sell it.

Question 3

One of your colleagues is running an event to raise money for a local charity. One evening, you see her taking boxes of pens, notepads and post-it notes. When you challenge her, she says that she is taking them for her fundraising and, although she has not asked permission to take them, she is sure the company will not mind. Is this an ethical issue and why?

A. Yes - she is using company property for other purposes without permission
B. No - it is just stationery and nothing valuable
C. Yes - she should not be undertaking charitable initiatives
D. No - the company would undoubtedly not mind her using the stationery for charitable purposes, so there is nothing wrong with her taking it

Question 4

Which of the following statements is incorrect in relation to the Memorandum of Association of a company which is registered after the Companies Act 2006 is fully in force?

A. The Memorandum of Association must state that the subscribers wish to form a company under the Act.
B. The Memorandum of Association must contain a statement of the company's authorized share capital.
C. The Memorandum of Association will no longer be a company's superior constitutional document.
D. The Memorandum of Association must state that the subscribers agree to become members of the company.

Question 5

Which of the following is incorrect?

A. An agreement is not binding in English law unless it is supported by consideration or contained in a deed.
B. An invitation to treat is a call to start negotiations.
C. A person must know of an offer before he can accept it.
D. An acceptance is ineffective unless it is communicated to the offeror by the offeree personally.

Solutions: