Mr a Is the Sole Shareholder of X Ltd

question 95

Multiple Choice

Mr. A is the sole shareholder of X Ltd., and is also a director of Y Ltd. Y Ltd. is negotiating to buy property from X Ltd. Which of the following is false?

• A) Failure to disclose his interest will make Mr. A liable to Y Ltd. for any profits he makes on the transaction and for any losses suffered by Y Ltd.
• B) So long as Mr. A discloses his position to the board of directors of Y Ltd., he can vote in favour of the contract at the directors' meeting.
• C) Mr. A does not owe a fiduciary duty to X Ltd. or to his fellow X Ltd. shareholders.
• D) To protect himself, Mr. A must disclose his interest to the other directors and refrain from voting or influencing the decision.
• E) Mr. A has a duty to act in the best interests of Y Ltd., and to avoid any conflict of interest.

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Definitions:

Easement

A right granted to a party to use the property of another for a specific purpose, like a right-of-way.

Recording

Filing a deed, with any other related documents such as mortgages, with the appropriate county office, thereby giving official notice of the transfer to all interested parties.

Legal Recourse

The right of an individual or entity to seek justice or compensation through legal procedures and court actions.

Senior Citizen's Center

A community facility that provides activities, services, and support specifically for older adults.