Company Law Tutorial

caller law tutorial question class 3 Semester1. 1. Under the ordinary forms of law, a present bon ton and a supplemental company, even a 100 per penny subsidiary company, are distinct heavy entities and in the absence of an agency get hold of between the deuce companies, one cannot be said to be the agent of the other. This seems to be clearly established by the rule in Salomon v. A. Salomon & Co. Ltd. Critically discuss. 2. The rationale laid down in Foss v. Harbottle continues to bring out a significant obstacle to nonage shareholder action. Discuss. 3. Layton Co. Ltd. , private company with Articles in the form of Table A, has in its memorandum, the by-line clauses The objects for which the company is established are (i) to frame, help and distribute computer software and CD Roms (ii) to grease ones palms and hold property, to borrow or to lend funds, and to dispose of funds or property owned by the company and (iii) to do anything that is in the opinion of the d irectors needed to make profits from the use of the assets of the company. Geoff and Marcia, devil of the directors of Layton Co.Ltd. , own approximately 20 portion of the shares in Layton Co. Ltd. Stacy, a director, unbek directn to the identity card of directors, purports to enter into a contract with gamey State Developers Ltd. , on behalf of Layton Co. Ltd. , for the construction of a health watering hole for stressed executives. In order to secure machinery, Stacy writes to wellness overzealous Inc. , on Layton Co. Ltd. s stationery, offering Health Fanatic Inc. the contract to provide skilful training for any staff employed by the spa. Health Fanatic Inc. accepts the offer. Layton Co. Ltd. , now refuses to fig he health spa due to a depression in the securities industry and is consequently not in need of Health Fanatic Inc. s operate. Discuss. 4. Tamara and Kathy have been conducting business as artifact restorers for several years. In January, 1999, Tamara and K athy decided to turn back their business. In order to facilitate the create of the registered head office of the company, Tamara purchased land from her granddaddy for$50,000. Meanwhile, Kathy executed a contract on behalf of heritage Ltd. , engaging the services of Sherry, a geology expert, to carry out a geologic survey.Sherry submitted a report headed subject to tick which stated that the land was suitable for construction a multistoried complex and that at that place was evidence of mineral deposits. In June 2004, hereditary pattern Ltd. was incorporated as a everyday company with Tamara, Kathy and Bill as its directors. Tamara readily sold the parcel of land to Heritage Ltd. for $2. 2 meg and submitted an invoice 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 dash of trucks. It is customary for Heritage Ltd. to lease trucks as acquisition is extremely costly. Advise. The capital of pubic hair Tea Co. Ltd. consists of fully paid up ordinary and druthers shares. The governance regulations of scrubbing Tea Co Ltd. provide as follows 17(a) Preference shareholders shall receive a cumulative druthers dividend of 5% half annual and (b)Two votes shall be attached to each preference share issued. Due to an outbreak of the pink Mealy bug disease, the production of bush tea has dramatically declined.The board of directors of shrub 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 annex the voting rights of ordinary shareholders. Advise the preference shareholders. 5. In 2001, Mr. cagey decided to variety condominiums on a parcel of set down front property which he had purchased in 1996 for $40,000. On March 26th, 2001, Mr. Ingenious instructed Mr. well(p) Guard, an attorney-at-law, to incorporate a co mpany to be called brink seaport Ltd. to manage the condominiums. right off after leaving Mr.Safe Guards office, Mr. Ingenious entered into an literal agreement on behalf of rim haven Ltd. with Fast Seal Cement Ltd. for the render 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 resolved to purchase the beach front property from Mr. Ingenious for $1million. Unfortunately, due to a slump in the real estate market Beach Haven Ltd. s profits declined significantly. It has been observe that, prior to incorporation, Mr. Ingenious contracted with conducting wire Steel Inc. , signing on behalf of Beach Haven Ltd. , for the supply of 12 lots of high-tension steel at a price well 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 low-level quality. Advise Beach Haven Ltd. 6. Sashawa Enterprises Ltd. (SE Ltd. ) is a public company incorporated in Jambah.The Articles of Association of SE Ltd. are in the form of Table A. The objects clause of the document of Association contain the following comestible (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. , contracted with Caribbean Construction Ltd. to build a coffee shop on premises adjacent to the corporate render of SE Ltd. To finance this project SE Ltd. orrowed $5 million from Careless bank building Ltd. This loan was approved quickly, since Careless camber Ltd. was a long standing guest of SE Ltd. and Careless Bank Ltd. was snug of Caribbean Construction Ltd. s credit worthiness. afterward the events of September 11th, 2001, the profits of SE Ltd. declined considerably. SE Ltd. is no longer interested in constructing the coffee shop and is refusing to pay twain Caribbean Construction Ltd. and Careless Bank Ltd. however SE Ltd. is desirous of donating $12 million dollars to the International War Relief Fund. Discuss.