Fiduciary Duties of Directors: Acting in the Best Interest of the Company
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Questions and Answers

What is the primary obligation of directors under fiduciary duties?

  • To act in the best interests of the company's shareholders (correct)
  • To prioritize their personal interests and gains
  • To avoid conflicts of interest with the company's creditors
  • To exercise reasonable care, skill, and diligence
  • What is the expectation of directors when carrying out their duties and decision-making process?

  • To act solely in the interests of the company's management
  • To act only in the interests of the company's employees
  • To act with a certain degree of care, skill, and diligence (correct)
  • To act with a certain degree of recklessness and negligence
  • What is a consequence of directors failing to disclose conflicts of interest?

  • They are required to resign from their position
  • They are exempt from any further fiduciary duties
  • They are prohibited from participating in related decisions (correct)
  • They are liable to the company for any damages caused
  • What is an expectation of directors in terms of their dealings with the company?

    <p>They must act honestly and in good faith</p> Signup and view all the answers

    What is a restriction on directors under fiduciary duties?

    <p>They are prohibited from using company information for personal gain</p> Signup and view all the answers

    What is the minimum number of directors required for a Private Limited Company?

    <p>3</p> Signup and view all the answers

    What is the primary reason for a director to disclose their personal interest in a matter?

    <p>To comply with regulatory requirements</p> Signup and view all the answers

    What is the consequence if a director does not disclose their personal interest in a matter?

    <p>The court can declare the agreement valid</p> Signup and view all the answers

    What is the primary responsibility of directors when handling financial statements and reporting?

    <p>All of the above</p> Signup and view all the answers

    What is the maximum number of directors allowed for a Joint Venture company?

    <p>Unlimited</p> Signup and view all the answers

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