ЁЯУв Too many exams? DonтАЩt know which one suits you best? Book Your Free Expert ЁЯСЙ call Now!

    Question

    Consider the following statements regarding the duties

    of directors under Sections 166-167 of the Companies Act, 2013: Statement 1: A director must avoid conflicts of interest between personal activities and company interests. Statement 2: A director shall not gain undue advantage or allow relatives to gain advantage through the directorship. Statement 3: A director cannot assign his office; any assignment made is void. Statement 4: The company can indemnify a director for loss arising from criminal acts committed by the director in their capacity as director. Which statements are correct?
    A Statements 1, 2, and 3 only Correct Answer Incorrect Answer
    B Statements 1 and 2 only Correct Answer Incorrect Answer
    C Statements 2 and 3 only Correct Answer Incorrect Answer
    D Statements 1, 2, 3, and 4 only Correct Answer Incorrect Answer
    E Statements 1 and 4 only Correct Answer Incorrect Answer

    Solution

    Sections 166-167 address directors' duties and liabilities. Statement 1 is correctтАФSection 166(4) requires avoiding conflicts of interest. Statement 2 is correctтАФSection 166(5) prohibits undue gain by the director or relatives. Statement 3 is correctтАФSection 166(6) explicitly states office cannot be assigned and any such assignment is void. Statement 4 is incorrectтАФSection 167 provides that indemnification cannot extend to criminal acts or intentional fraud; the company can only indemnify for innocent breaches. Statements 1, 2, and 3 are correct.

    Practice Next
    More Other Laws and Acts Questions

    Relevant for Exams:

    ask-question