Site navigation

Section 166(2) of the Companies Act, 2013 lists the interests in which a director must act in good faith. Which of the following does it NOT name?

Question and options

Section 166(2) of the Companies Act, 2013 lists the interests in which a director must act in good faith. Which of the following does it NOT name?

  1. The protection of the environment

  2. The company's employees

  3. The community

  4. The company's creditors

Answer and explanation

Correct answer: D - The company's creditors

Section 166(2) of the Companies Act, 2013 requires a director to act in good faith to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of the environment. Creditors are not named in the sub-section, although their interests are protected by other provisions, such as those on fraudulent conduct and insolvency.

Practice for these exams

Related exam syllabi

More solved explanations in Directors & key managerial personnel