Feed / CA Final FR / Q350

FR TEST 3 MCQ 4

. Investors A and B establish Entity C and each holds 50% of the voting rights. The shareholders ‘agreement between A and B specifies that: Entity C‘s purpose is to generate capital gains from investing in commercial property. Its activities are limited to buying, managing and selling properties that meet predetermined investment criteria all decisions concerning major capital activities, including buying and selling properties, and associated financing activities, require the agreement of both investors Investor A is responsible for other day-to-day management activities, including marketing to prospective tenants, negotiating rental agreements, rent collection and property maintenance, security and insurance. Investor A is paid for these services on the basis of costs incurred plus a fixed margin. 


MY question is if both A and B have equal rights and major decision is taken by both then how can it state that only A has control of entity C

1 Answers Reply
Please login to view Answers
You must login to post an answer
SignUp Icon