Question 1

**Scenario:** 'Quantum Lithography PLC' manufactures microchips. The CEO, David, secretly sets up a rival consulting firm and diverts a lucrative government contract away from Quantum to his new firm. Another director, Fiona, fails to declare her 30% shareholding in a company that Quantum just signed a major supply contract with.

**Question:** Which specific statutory duty under the Companies Act 2006 has Fiona breached?

Accepted Answer

Distinguish between s.175 (external conflicts/opportunities) and s.177 (internal transactions with the company).

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Choosing s.175 (Duty to avoid conflicts of interest). Section 175(3) explicitly states that the duty does not apply to a conflict of interest arising in relation to a transaction or arrangement *with the company*. That specific scenario is governed by s.177.

How to approach this question

Full Answer

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