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

1. Articles of association regulate the relationship between:

A) the company and its directors
B) the company and its creditors
C) the company and its customers
D) the company and its members

2. Which of the following is correct in relation to loans to directors of a public company?

A) If a public company pays the debts of one of its directors on terms that the payment must be repaid by the director, the shareholders must approve the payment
B) A public company which provides a loan to one of its directors commits a criminal offence unless the loan is approved by the shareholders
C) A public company cannot make loans to its directors
D) A public company is not subject to any restrictions when making a loan to one of its directors

3. Michael is conducting a social and environmental audit on a chemicals factory. Which of the following should he review?

A) Wastage levels and the procedures the company has in place to manage them.
B) Emissions levels and the procedures the factory has in place to manage them.
C) Operational efficiency.
D) Recycling targets and procedures.
E) Suitability of the project plan, and project management process.
F) Adherence to health and safety procedures.
G) Adherence to rules and procedures.

4. Which of the following is correct?

A) A public limited company cannot trade until it has paid up share capital of at least £50,000.
B) A private limited company must have at least two shareholders.
C) The company secretary of a public limited company must be qualified.
D) The shares of all public limited companies are quoted on the Stock Exchange.

5. In relation to offers, which of the following statements is correct?

A) An offer to sell goods can be made to the whole world
B) Statements made in early negotiations cannot amount to offers.
C) An item displayed in a shop window with a price tag is an offer to sell
D) Goods displayed on a supermarket shelf are deemed to be offers to sell

Solutions: