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A, B C and D are sole directors and shareholders of EFG Company each holding 25% of the shares in the company. The articles of association of EFG Company state that "the directors cannot enter into any contract on behalf of the company exceeding $30,000 without the agreement of all the shareholders''.
B contracted on behalf of the company for $40,000 with Y Company without the agreement of the other shareholders. Which of the following is correct?
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A. 1 and 3 only
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C. 1,2 and 3
D. 1 and 2 only
Answer: A

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