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Dear Tutor,
I found this question in ’14 exam and find it difficult to understand the answer.
The question is “In relation to wrongful trading, the standard against which the conduct of directors will be assessed in which of the following?
A. Purely subjective, depending on actual skill of the director
B. Purely objective, depending on what is expected of a director in that position (my guess)ank you.
C. A mixture of subjective and objective but only to increase potential liability (exam answer)
D. A mixture of subjective and objective but only to reduce potential liability.Please help
One more question where there is uncertainity:
Which of the following are ordinary partnerships UNABLE to create in relation to their property?
1. Mortgages
2. Fixed charges
3. Floating chargesquestion 21
In UK a criminal case must be proved beyond reasonable doubt. This concept relates to:
A. Burden of proofs
B. Standard of proof
C/ Balance of profabilities
D. Reverse burden of proofMy answer would be A but is says B… can you help explaining?
I got this from Wikipedia – I think it explains the correct option
“In order to establish liability, the liquidator needs to demonstrate, using the civil burden of proof (i.e. on the balance of probabilities) that the directors continued trading the company beyond a point in time when they knew, or ought to have ascertained, that insolvent liquidation was inevitable.
The facts a director ought to have known were those a reasonably diligent person—having both the skill and experience possessed by a reasonable director (so subjective) — together with the skill and experience actually possessed by that individual (the objective element)
This means that there is a two-fold test for knowledge. There is a general level of skill required for all directors under the first part of the test. Under the second, a higher standard of knowledge is required by those with specialist skills.
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