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The articles of association of A Ltd provide that all disputes between A ltd and its directors must be referred to arbitration. Del is a director of A ltd and is in dispute with the company about late payment of his director’s fees.
Which of the following is correct?
1)Del is obliged by the articles of association to refer the dispute to arbitration whether or not he is a shareholder.
2)Del is obliged by the articles of association to refer the dispute to arbitration only if he is a shareholder.
A. 1 only
B. 2 only
C. both 1 and 2
D. neither 1 nor 2Shouldn’t the answer be B because members and shareholders are the same right?
I presume that the answer given is D
The articles are a binding contract between:
the company and the members,
the members and the members,
the members and the company …
… but only in their capacity as members and not in any other capacity (eg directors)
Your comment about shareholders and members being synonymous is irrelevant to the question
Finally, no, the term “member” is technically NOT the same as the expression “shareholder” although for the purposes of an ACCA law exam the two are generally taken to be the same
OK?
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