Question 1

In a family-owned brewery, the retired founder, Arthur, is not officially on the board of directors. However, the officially appointed directors refuse to make any major decisions without Arthur's approval, and they consistently follow his instructions.

In company law, how would Arthur be classified?

Accepted Answer

Match the scenario (instructing the board from behind the scenes without acting as a director publicly) to the statutory definition in s.251 CA 2006.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Confusing shadow directors with de facto directors. A de facto director openly acts as a director (e.g., signing documents as 'Director'), whereas a shadow director controls the board from behind the scenes.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA LW — Corporate and Business Law Practice Exam 2

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