Which of the following is NOT a valid defence for insolvent trading? Select one: a. A director had reasonable grounds to expect that the company was solvent, and that it would remain solvent. b. A director delegated monitoring of the company’s financial situation to a competent and reliable person. c. A director was absent from management for holidays for 2 weeks. d. A director took all reasonable steps to prevent the company from incurring the debt.

whether there has been a breach of the directors’ duty to avoid insolvent trading.

Question 51 PointWhich of the following statements best describes actions for wrongful and fraudulent trading?Only a liquidator can bring an action for wrongful trading.A liquidator can bring an action for wrongful trading against a director or any officer of a company.An award against a director for wrongful trading will be assessed on a compensatory basis.A creditor can bring an action for fraudulent trading against a director or any officer of a company. An award against a director for fraudulent trading will be assessed on a punitive basis.

If a firm fails to meet its responsibilities to _____, it may be forced into bankruptcy. A. its employees B. the environment C. the government D. its creditors E. its owners

Franz, Zac, and Jordan comprised the board of directors for Ben & Jolly’s Pty Ltd, and took a business decision to invest heavily in a major software upgrade across the organisation. When the relevant debt was incurred, the company had many outstanding invoices from suppliers and was significantly behind in loan, rent, and tax payments. Which amongst the following statements is CORRECT? Select one: a. If the company has been trading whilst insolvent, a liquidator can recover the debts from the directors personally. b. If the company has been trading whilst insolvent, a creditor, such as the supplier of the software, can recover the debt from the directors personally (with permission of the liquidator). c. Franz, Zac, and Jordan can be made personally liable for the company’s debts if they were incurred at a time when the company was trading whilst insolvent, and as a result they may be required to compensate the company. d. All of the other options for this question are correct.

Which of the following is INCORRECT in relation to a director who accepts a bribe in return for selling the company’s business for a low price? Select one: a. The director has breached their statutory duties under ss 181 and 182 of the Corporations Act 2001 (Cth). b. The director may be found guilty of a criminal offence if they were intentionally dishonest. c. The director has breached their fiduciary duty to avoid a conflict of interest. d. The director will only be liable under the common law and under the Corporations Act 2001 (Cth) if they were intentionally dishonest and evidence establishing the directors’ dishonest intention must be put forward.