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Company Law scenario

:smile: hey everyone, I'm just looking for abit of help with this problem question...
QuietLife Ltd (the "Company") is a private company limited by shares which has adopted a slightly amended version of the Model Articles for Private Companies Limited by Shares as its Articles of Association. Grace and her brother John hold 20% of the shares each while their cousins, Francis and Edward hold 30% of the shares each. Francis and Edward are also directors of the company.

There has been a serious disagreement between Grace and John on the one hand and Francis and Edward on the other. Grace and John have alleged that the directors are approving excessive payments to themselves for the services they provide to the Company. Furthermore, although the Company is a profitable one, no dividend has been paid to shareholders for six years.

Grace recently transferred her shares to her daughter Samantha, but the directors refused to register the transfer without giving reasons for their refusal. In an effort to 3


get out of the Company, John called upon the directors to purchase his shares equally between them for a fair value. The Articles of Association provided:

"Every member who intends to transfer his shares to a person other than a lineal descendant shall inform the directors who will take said shares equally between them at fair value."

Again the directors refused to purchase the shares.

Advise Grace and John as to any remedies they have as shareholders
ANY help would be greatly appreciated :smile: thanks x
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