ICANBusiness, Management and FinanceWorking Capital Management2020

Under the provisions of the Companies and Allied Matters Act (CAMA) 2020, which of the following best describes the primary obligation of a company's directors regarding the management of working capital?

ADirectors must ensure current assets always exceed current liabilities by a minimum ratio of 2:1 as prescribed by the Corporate Affairs Commission.
BDirectors have a fiduciary duty to manage the company's affairs, including liquidity, in the best interest of the company and its members.CORRECT
CDirectors are required to file a quarterly working capital statement with the Financial Reporting Council of Nigeria (FRCN).
DDirectors must obtain shareholder approval before extending trade credit to any customer exceeding ₦5,000,000.
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Why the answer is B, and why the others tempt you.
CAMA 2020 imposes fiduciary duties on directors to act in good faith in the best interests of the company, which encompasses prudent management of liquidity and working capital. There is no statutory minimum current ratio prescribed by the CAC, nor a mandatory quarterly working capital filing with FRCN. The other options describe non-existent statutory requirements.
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