Syllabus F: Management, administration and the regulation of companies — ACCA Practice Question 18

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Identify the specific statutory duty that prevents directors from taking corporate opportunities for themselves.

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C.Duty to avoid conflicts of interest (s.175).✓ Correct

Section 175 of the Companies Act 2006 requires a director to avoid a situation in which they have, or can have, a direct or indirect interest that conflicts with the interests of the company. This specifically applies to the exploitation of any property, information, or opportunity (the 'corporate opportunity' doctrine).

Common mistakes

Selecting s.176 (benefits from third parties) instead of s.175.

A director of a cross-border multinational company discovers a lucrative investment opportunity during the course of their duties. The director decides to exploit this opportunity personally without disclosing it to the board. Which statutory duty has the director primarily breached?

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Practice the full ACCA LW — Corporate and Business Law Practice Exam 3

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