Which of the following statements is correct?
A)where there is an agreement with other investors or a statute,control will only exist while the agreement is current
B)where there may be apathy on the part of shareholders who may not cast votes or attend annual general meetings,control can exist with less than 50 % ownership of issued shares
C)both A and B
D)professional judgment is never required to determine the existence of control

Question

Quizplus · Accepted Answer

Both statements A and B are correct. Statement A refers to situations where control may be established through agreements with other investors or through legal statutes, and it emphasizes that control will only exist while the agreement is in place. Statement B, on the other hand, refers to situations where control may be established through owning less than 50% of the issued shares, due to apathy on the part of other shareholders who do not exercise their voting rights. Both of these statements reflect different ways in which control can be established or maintained, and both are valid. As for statement D, it is incorrect since professional judgment is often required to determine the existence of control, especially in complex situations where ownership and control may be diversified or fragmented.

Which of the Following Statements Is Correct