ICAEW BL · Chapter 10 · Question 6 of 10
Which of the following best describes a shadow director under the Companies Act 2006?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A person, not formally appointed, in accordance with whose directions or instructions the directors are accustomed to act, other than advice given in a professional capacity
Explanation
Section 251 defines a shadow director as a person in accordance with whose directions or instructions the directors are accustomed to act. A person is not a shadow director merely because the directors act on advice given in a professional capacity. Shadow directors are subject to many directors' duties and to wrongful trading liability. Someone filling a casual vacancy, or a non-executive director, is a formally appointed director.
More Directors, members and company meetings MCQs
- Q8Redwing Ltd has a paid-up share capital of 200,000 £1 ordinary shares, all carrying voting rights. Members holding 12,000 of those shares…
- Q9What is the minimum period of notice required for the annual general meeting of a public company, unless all members entitled to attend…
- Q10Three friends set up Bramble Ltd and each held a third of the shares as directors on the understanding that all would take part in…
- Q1The members of Carrick Ltd, a private company, want to remove director Owen before his term ends. At a general meeting called on 14 days'…
- Q2The board of Ashgrove Ltd is deciding whether to close a loss-making factory that is the main employer in a small town. Under s172…