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CIMA Fundamentals of Ethics - Corporate Governance and Business Law Sample Questions:

1. Zed plc contracted to build an apartment block for Exe Ltd. Which of the following would provide Zed with a valid excuse not to proceed with the contract?
(i) A key employee who was to manage the project has resigned.
(ii) The price of the materials to be used by Zed plc have increased to such an extent that the building can only be completed at a loss to Zed plc.
(iii) Planning permission has been refused.

A) (i) and (ii) only
B) (i) and (iii) only
C) (iii) only
D) (i) only

2. Which of the following destroys the original offer and puts another in its place?

A) A counter offer.
B) A revocation.
C) A request for further information.
D) An acceptance.

3. Exe Ltd has five members. A has 90% of the shares and the other four members holds 2.5% of the shares each.
Which of the following is correct in relation to the calling of a general meeting on short notice?

A) All five of the members must agree to short notice
B) A and any two of the other members can agree to short notice
C) A alone may call the meeting on short notice
D) Any three of the members may agree to the meeting being held on short notice

4. AB Ltd contracted to deliver two desks and three filing cabinets to CD Ltd. On the day when delivery was due to take place AB Ltd did not have a vehicle with sufficient capacity to hold all the goods. As a result AB Ltd delivered the two desks only Which of the following is correct?

A) The failure to deliver the filing cabinets is a breach of a warranty which entitles CD Ltd to claim damages
B) The contract between AB Ltd and CD Ltd is frustrated.
C) CD Ltd is legally entitled to refuse delivery of the desks
D) The delivery of the desks amounts to substantial performance of the contract and CD Ltd is obliged to pay the contract price less an amount for the defects in performance

5. Which of the following are recommended by the UK Corporate Governance Code?
(i) The roles of Chairman and Managing Director should be separated
(ii) A senior independent director should be identified and available as a contact for shareholders (iii) At least one half of the board as a whole should be made up of independent non-executive directors

A) (i) and (ii) only
B) (i) and (iii) only
C) (i), (ii) and (iii)
D) (i) only

Solutions: