Company Law Tutorial

Company law tutorial inquire year 3 Semester1. 1. Under the ordinary rules of law, a present order and a subsidiary company, pull down a 100 per cent subsidiary company, be distinct legal entities and in the absence of an role disregard between the ii companies, one cannot be said to be the agent of the other. This seems to be all the way established by the rule in Salomon v. A. Salomon & Co. Ltd. critically discuss. 2. The principle laid down in Foss v. Harbottle continues to effect a significant obstacle to minority sh areholder action. Discuss. 3. Layton Co. Ltd. , private company with Articles in the form of put over A, has in its memorandum, the following articles The objects for which the company is established are (i) to manufacture, process and distribute computer software and CD Roms (ii) to purchase and hold property, to fasten on or to get money, and to dispose of funds or property owned by the company and (iii) to do anything that is in the credit of the directors necessary to make profits from the use of the assets of the company. Geoff and Marcia, two of the directors of Layton Co.Ltd. , own approximately 20 percent of the shares in Layton Co. Ltd. Stacy, a director, unbek right awayn to the board of directors, purports to enter into a catch with High State Developers Ltd. , on be half(prenominal) of Layton Co. Ltd. , for the twirl of a health spa for stressed executives. In order to secure machinery, Stacy writes to Health fiend Inc. , on Layton Co. Ltd. s stationery, offering Health Fanatic Inc. the contract to provide technical training for any staff employed by the spa. Health Fanatic Inc. accepts the offer. Layton Co. Ltd. , now refuses to build he health spa behaveable to a depression in the market and is therefore not in need of Health Fanatic Inc. s services. Discuss. 4. Tamara and Kathy have been conducting business as artefact restorers for several years. In January, 1999, Tamara and Kathy decided to control thei r business. In order to facilitate the make of the registered head affair of the company, Tamara purchased lower from her grandfather for$50,000. Meanwhile, Kathy executed a contract on behalf of hereditary pattern Ltd. , engaging the services of Sherry, a geology expert, to carry turn out a geological survey.Sherry submitted a report headed subject to confirmation which stated that the land was suitable for building a multistoried entangled and that there was evidence of mineral deposits. In June 2004, heritage Ltd. was incorporated as a public company with Tamara, Kathy and Bill as its directors. Tamara promptly sold the packet of land of land to Heritage Ltd. for $2. 2 million and submitted an banknote for $70,000 for services rendered prior to the incorporation of Heritage Ltd. In April 2005, Tamara, unbeknown to the board, enters into an agreement with Jump Up Inc. or the acquisition of a fleet of trucks. It is customary for Heritage Ltd. to lease trucks as acquisitio n is extremely costly. Advise. The gravid of Bush afternoon tea Co. Ltd. consists of fully paid up ordinary and taste shares. The governing regulations of Bush Tea Co Ltd. provide as follows 17(a) Preference shareholders shall invite a cumulative preference dividend of 5% half yearly and (b)Two votes shall be attached to each preference share issued. Due to an outbreak of the Pink farinaceous bug disease, the production of bush tea has dramatically declined.The board of directors of Bush Tea Co. Ltd. proposes to alter clause 17(a) of the governing regulations to reduce the preference dividend from 5% to 2% and to move a resolution to increase the suffrage rights of ordinary shareholders. Advise the preference shareholders. 5. In 2001, Mr. sharp decided to build condominiums on a parcel of beach front property which he had purchased in 1996 for $40,000. On March 26th, 2001, Mr. smart instructed Mr. Safe Guard, an attorney-at-law, to incorporate a company to be called bank ha rbor Ltd. to manage the condominiums. Immediately after leaving Mr.Safe Guards office, Mr. knowing entered into an oral agreement on behalf of set down haven Ltd. with Fast Seal Cement Ltd. for the supply of building blocks for the construction of the condominiums. The company, Beach Haven Ltd. , was eventually incorporated, in January, 2002. Its board of directors consists of Mr. Ingenious, Mr. Deke, Ms. Peta-Gaye and Ms. Jayanti. At the directors meeting of February, 2002, the board of directors heady to purchase the beach front property from Mr. Ingenious for $1million. Unfortunately, due to a slump in the actual estate market Beach Haven Ltd. s profits declined significantly. It has been discovered that, prior to incorporation, Mr. Ingenious undertake with Wire Steel Inc. , signing on behalf of Beach Haven Ltd. , for the supply of 12 tons of high-tension steel at a price considerably above the market price. Mr. Deke, in March, 2003, hired his girlfriend, as a consultant, for $10,000 per month without board approval. The cement blocks purportedly purchased on Beach Haven Ltd. s behalf are discovered to be of inferior quality. Advise Beach Haven Ltd. 6. Sashawa Enterprises Ltd. (SE Ltd. ) is a public company incorporated in Jambah.The Articles of intimacy of SE Ltd. are in the form of Table A. The objects clause of the Memorandum of Association contain the following provisions (a)To carry on the business of the manufacture of textiles and clothing apparel (b)To borrow money (c)To do all such things which in the opinion of the directors may be conveniently carried out by the company. In January, 2001, Michael and Midge, two directors of SE Ltd. , contract with Caribbean Construction Ltd. to build a coffee frequent on premises adjacent to the corporate main office of SE Ltd. To finance this project SE Ltd. orrowed $5 million from Careless Bank Ltd. This loan was canonic quickly, since Careless Bank Ltd. was a long rest customer of SE Ltd. and Care less Bank Ltd. was conform to of Caribbean Construction Ltd. s credit worthiness. After the events of kinfolk 11th, 2001, the profits of SE Ltd. declined considerably. SE Ltd. is no durable interested in constructing the coffee shop and is refusing to pay both Caribbean Construction Ltd. and Careless Bank Ltd. still SE Ltd. is desirous of donating $12 million dollars to the outside(a) War Relief Fund. Discuss.