ACCA Applied Skills · Corporate and Business Law (Global) · Company directors
Raj is appointed a director of Altus Ltd. Which of the following is the most accurate description of the legal relationship created by his appointment?
A director is an agent of the company and owes it fiduciary duties. Appointment does not make him liable for the company's debts or owner of its assets, because the company is a separate legal person.
- AHe becomes an agent of the company and owes fiduciary duties to itCorrect
- BHe becomes a personal guarantor of all the company's debts
- CHe becomes the legal owner of the company's assets
Explanation
Directors act as agents of the company and owe it fiduciary duties and a duty of care. Appointment does not make them liable for company debts or owners of its property, which belong to the company as a separate legal person.
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