Skip to content

CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Business Ethics, Code of Conduct and Anti-Bribery

Arjun Infra Pvt Ltd uses a freelance liaison consultant, Mr Bhatt, who is neither an employee nor a subsidiary. He regularly represents Arjun before state departments. Arjun argues he is not an associated person because he has no formal employment contract. How is this argument best assessed under Section 9?

The argument fails because association with a commercial organisation is determined by all relevant circumstances, not merely by the formal relationship. A consultant performing services on behalf of Arjun can be an associated person even without an employment contract, whatever his capacity.

  1. AIt succeeds, because only employees can be associated persons
  2. BIt succeeds, because a consultant is always an independent contractor
  3. CIt fails, because association is determined from all relevant circumstances and not merely the nature of the relationshipCorrect
  4. DIt fails, because every consultant is conclusively presumed to be associated

Explanation

A person is associated if he performs services for or on behalf of the organisation, whatever his capacity, employee, agent or subsidiary. Explanation 2 says this is determined by all relevant circumstances and not merely the nature of the relationship. The presumption in Explanation 3 applies only to employees and is rebuttable, so option D is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Business Ethics, Code of Conduct and Anti-Bribery shows your real accuracy, how long you take and where you lose marks.

Practise Business Ethics, Code of Conduct and Anti-BriberyFree diagnostic mock

More Business Ethics, Code of Conduct and Anti-Bribery questions