ExpertEasy2 marksMultiple Choice
Syllabus F: Management, administration and the regulation of companiesSection ACorporate and Business Law
ACCA · Question 17 · Syllabus F: Management, administration and the regulation of companies
Which of the following best describes a 'shadow director' under the Companies Act 2006?
Which of the following best describes a 'shadow director' under the Companies Act 2006?
Answer options:
A.
A person formally appointed to the board but who rarely attends meetings.
B.
A person in accordance with whose directions or instructions the directors of the company are accustomed to act.
C.
An alternate director appointed to vote on behalf of another director.
D.
A director of a subsidiary company.
How to approach this question
Recall the statutory definition of a shadow director.
Full Answer
B.A person in accordance with whose directions or instructions the directors of the company are accustomed to act.✓ Correct
Section 251 of the Companies Act 2006 defines a shadow director as 'a person in accordance with whose directions or instructions the directors of the company are accustomed to act'. Professional advisors acting in their professional capacity are excluded from this definition.
Common mistakes
Confusing a shadow director with a de facto director (someone who acts as a director and holds themselves out as one, but lacks formal appointment).
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