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ACCA Applied Skills · Corporate and Business Law (Global) · Company directors

Kasim has been told by the managing director of Orvale Ltd that he will be 'treated as a director'. He is not formally appointed, but he regularly gives instructions to the board, which habitually acts on them. He has never been named in the register of directors. How is Kasim best classified?

Kasim is a shadow director. He has not been formally appointed, but the board is accustomed to act on his directions, so he can carry director-type duties and liabilities. A de jure director is validly appointed, and an alternate acts for another director.

  1. AA shadow director, because the board is accustomed to act on his directionsCorrect
  2. BA de jure director, because he gives instructions to the board
  3. CAn alternate director, because he is not on the register

Explanation

A shadow director is a person in accordance with whose directions the board is accustomed to act, even though not formally appointed. A de jure director is validly appointed, which Kasim is not. An alternate director is appointed to act for a named director, which does not apply here.

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