Corporate and Business Law — ACCA Practice Question 18

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Distinguish between de jure, de facto, and shadow directors based on their appointment and behavior.

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C.She is a shadow director.✓ 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'. Because the official board consistently follows Elena's instructions, she is a shadow director and is subject to many of the same statutory duties and liabilities as officially appointed directors.

Common mistakes

Confusing a shadow director (who instructs the board) with a de facto director (who openly acts as a director without valid appointment).

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Common mistakes

Practice the full ACCA LW — Corporate and Business Law Practice Exam 4

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