Multiple Choice Questions and Answers (Version #2)

08/07/2018 Topics I and II - Introduction, Corporate Personality and Limited Liability: 2018 Winter Main - LAWS2014 /5014 Corporations
rporations Law
Topics I and II - Introduc on, Corporate Personality and

Limited Liability
Due No due date Points 10 Questions 10 Time Limit None
Allowed Attempts 10
Take the Quiz Again
A empt History
Attempt Time Score
LATEST Attempt 1 6 minutes 8 out of 10
Score for this attempt: 8 out of 10

Submitted Jul 8 at 8:45
This attempt took 6 minutes.
Question 1 0 / 1 pts
1. Members of any company registered under the Corporations Act in

Australia have the benefit of limited liability.
You Answered
True
orrect Answer False
The liability of members of an unlimited company is contingent upon the

company being wound up and the assets of the company being inadequate
to satisfy its liabilities
Correct!
True
https://canvas.sydney.edu.au/courses/9598/quizzes/35106 1/4
08/07/2018 Topics I and II - Introduction, Corporate Personality and Limited Liability: 2018 Winter Main - LAWS2014 /5014 Corporations Law
False
A single shareholder of a registered proprietary company in Australia can

have the benefit of limited liability even when he or she is also the sole
director of the company.
Correct! True
False
According to Lee v Lee’s Air Farming Ltd, it is not possible for a major
shareholder to contract with the corporation under an employment contract.
True
Correct! False
In Gilford Motor Co Ltd v Horne, the plaintiff was successful in its action to
pierce the corporate veil, on the basis that Horne had intentionally set up a
new corporation to avoid a restrictive covenant in his contract of service.
Correct! True
False
In Smith Stone and Knight Ltd v Birmingham Corporation, the court was
prepared to pierce the corporate veil because the case involved a wholly-
owned subsidiary in a corporate group.
You Answered True
orrect Answer False
Australian public companies are required to have at least 3 directors and

proprietary companies are required to have at least 2 directors.
True
Correct!
False
The so-called “Bubble Act” was the first UK statute to grant full corporate
status to joint-stock companies
True
Correct!
False
In Australia all registered public companies are listed on the Australian

Securities Exchange.
True
Correct! False
A small business such as a hairdressing salon can be conducted through the

form of a no liability company.
True
Correct! False
Quiz Score: 8 out of 10
08/07/2018 Topic III Corporate Constitution Quiz: 2018 Winter Main - LAWS2014 /5014 Corporations Law
Topic III Corporate Cons tu on Quiz

Due No due date Points 10 Questions 10 Time Limit 10 Minutes
Allowed Attempts 2
A empt History
Attempt Time Score
KEPT Attempt 2 6 minutes 9 out of 10
Attempt 1 6 minutes 7 out of 10

The law strictly prohibits the imposition of any requirement additional to the
passing of a special resolution by the general meeting, in order to alter a
company’s constitution
True
Correct!
False
Correct
Correct
A company’s constitution and any replaceable rules have the effect as a

contract between a member and each director
True
Correct! False
False
The constitution of a public company can exclude the application of section

203D of the Corporations Act, which provides that a ‘public company may by
resolution remove a director from office’
True
Correct! False
The majority in the High Court decision of Gambotto v WCP Ltd decided that
an amendment to a company’s constitution to allow the expropriation or
compulsory acquisition of shares would be valid if it is for a proper purpose or
will not operate oppressively in relation to minority shareholders.
True
Correct! False
A member can bring an action to enforce all rights under a statutory contract
given to the member in that capacity
Correct!
True
False
A provision in a company’s constitution conferring rights otherwise than in the

capacity as a member are never enforceable at law
True
Correct!
False
In Read v Astoria Garage (Streatham) Ltd, the plaintiff managing director

failed in his allegation of breach of contract, because the Court of Appeal
held that, as a matter of construction, his contract of employment
incorporated Article 68 of the UK Companies legislation, entitling the
shareholders in general meeting to terminate his employment.
Correct!
True
False
An alteration to the articles may result in an alteration to the terms of a

special outside contract, provided that this is the intention of the parties.
orrect Answer True
You Answered False
Incorrect. See Bailey's case.
A provision in the constitution requiring membership disputes to be arbitrated

is not part of the statutory contract.
True
Correct! False
According to Shindler v Northern Raincoat Co Ltd, the board does not have
the power to enter into fixed term employment contracts.
True
Correct! False
08/07/2018 Topic IV Corporate Organs: 2018 Winter Main - LAWS2014 /5014 Corporations Law
Topic IV Corporate Organs

Due No due date Points 10 Questions 10 Time Limit 15 Minutes
Allowed Attempts 2
A empt History
Attempt Time Score
KEPT Attempt 2 5 minutes 7 out of 10
Attempt 1 10 minutes 4 out of 10

For every registered public company, the power to manage the business of
the company is vested in the Board of Directors.
You Answered True
Incorrect. Matter for the statutory contract.
orrect Answer False
The decision in Re Totex-Adon demonstrated that only the shareholders or

directors of a company may convene a general meeting
True
Correct! False
The decision in Automatic Self-Cleansing Filter Syndicate Co Ltd v

Cuninghame is based on a theory that views directors as the agents of
individual shareholders.
True
Correct! False
Cordiant Communications (Aust) Pty Ltd v Communication Group Holdings

Pty Ltd confirms that s 1322 Corporations Act can only be used to cure
procedural, and not substantive, irregularities.
Correct! True
False
100 members have a right, not only to request that the directors call a
general meeting under s 249D, but also to call a meeting directly under s
249F.
True
Correct! False
Members of a public company have an absolute right to appoint a proxy, but

members of a proprietary company have no absolute right to appoint a proxy.
orrect Answer True
You Answered False
The relevant standard for a notice of meeting is that it must be

comprehensible to a reasonably careful business person reading the
document.
True
Correct!
False
Under the Corporations Act, a company can never be appointed as a director

of another company?
Correct!
True
False
Under s 247A Corporations Act, a court is likely to make an order authorising

a member of a company to inspect its books, even though that member may
be motivated by a wish to obtain confidential information for the benefit of
one of the company’s competitors.
You Answered True
orrect Answer False
Under the organic theory of corporate law, a company is bound by the acts of
its board of directors because those acts are treated as acts of the company
itself.
Correct! True
False

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08/07/2018 Topics I and II - Introduction, Corporate Personality and Limited Liability: 2018 Winter Main - LAWS2014 /5014 Corporations

Topics I and II - Introduc on, Corporate Personality and

Take the Quiz Again

Score for this attempt: 8 out of 10

1. Members of any company registered under the Corporations Act in

orrect Answer False

The liability of members of an unlimited company is contingent upon the

A single shareholder of a registered proprietary company in Australia can

You Answered True

orrect Answer False

Australian public companies are required to have at least 3 directors and

In Australia all registered public companies are listed on the Australian

A small business such as a hairdressing salon can be conducted through the

Quiz Score: 8 out of 10

Topic III Corporate Cons tu on Quiz

LATEST Attempt 2 6 minutes 9 out of 10

Attempt 1 6 minutes 7 out of 10

Score for this attempt: 9 out of 10

A company’s constitution and any replaceable rules have the effect as a

The constitution of a public company can exclude the application of section

A provision in a company’s constitution conferring rights otherwise than in the

In Read v Astoria Garage (Streatham) Ltd, the plaintiff managing director

An alteration to the articles may result in an alteration to the terms of a

orrect Answer True

You Answered False

Incorrect. See Bailey's case.

A provision in the constitution requiring membership disputes to be arbitrated

Quiz Score: 9 out of 10

Topic IV Corporate Organs

LATEST Attempt 2 5 minutes 7 out of 10

Attempt 1 10 minutes 4 out of 10

Score for this attempt: 7 out of 10

You Answered True

Incorrect. Matter for the statutory contract.

orrect Answer False

The decision in Re Totex-Adon demonstrated that only the shareholders or

The decision in Automatic Self-Cleansing Filter Syndicate Co Ltd v

Cordiant Communications (Aust) Pty Ltd v Communication Group Holdings

Members of a public company have an absolute right to appoint a proxy, but

orrect Answer True

You Answered False

The relevant standard for a notice of meeting is that it must be

Under the Corporations Act, a company can never be appointed as a director

Under s 247A Corporations Act, a court is likely to make an order authorising

You Answered True

orrect Answer False

Quiz Score: 7 out of 10

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