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:

High-Temperature Heat

Heat energy characterized by temperatures significantly above normal environmental or operational levels, often used in industrial processes.

Pumped-Storage Hydropower

A type of hydroelectric power system that stores energy by pumping water from a lower elevation reservoir to a higher elevation one and generating electricity as the water flows back down through turbines.

Peak Periods

Times of highest activity or demand in a particular process or system.

Output

The amount of something produced by a person, machine, or industry.