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Sahil Is a Director of Dog Toy Pty Ltd, a Company

Question 9

Multiple Choice

Sahil is a director of Dog Toy Pty Ltd, a company which makes and sells plastic dog toys. Sahil is also a majority shareholder in Aussie Plastic Ltd, a company which sells plastic products. The other directors of Dog Toy Pty Ltd have been aware for some time that Shail is a majority shareholder in Aussie Plastics Ltd. Dog Toy Pty Ltd entered into a significant contract with Aussie Plastics Ltd to buy plastic for the manufacture of the dog toys it is producing. Which of the following is correct about Sahil's obligations under section 191 of the Corporations Act.


A) The only way Sahil can satisfy his obligations under section 191 is by giving notice to the other directors of the nature and extent of his interest in Aussie Plastics Ltd.
B) Sahil does not have any obligation under section 191 because Dog Toy Pty Ltd is a proprietary company and section 191 only applies to public companies.
C) Because Dog Toy Pty Ltd is a proprietary company, section 191(2) (b) would apply, and since the other directors are aware of the nature and extent of Sahil's interest in Aussie Plastics Ltd he is exempt from making disclosure under section 191(1) .
D) If Sahil was required to make disclose under section 191, he could not be present at any meeting where the contract with Aussie Plastics Ltd was being discussed.
E) This is a related party transaction and shareholder approval needs to be obtained before the contract is entered into.
F) Both (a) and (e) are correct.

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