Hi, I've got to write a memorandum of advice for this question.
Note: Anna is a minority shareholder, while Kerry is a majority shareholder Kerry and I set up the Company on the basis that we would run the Company together.I lent the Company £50,000 to help it get up and going. The loan is due to be repaidnext month.
The Company has been a great success; we have turned a profit for the first two years.However, Kerry is now proposing to extend the business into ‘cold yoga’. She thinksthis will be the latest craze but I am not convinced. I have just found out that theCompany has entered into a contract with Better Builders Limited to install refrigerationunits in all of the Company’s studios at a cost of £30,000. I am very concerned that thismeans the Company will be unable to repay my loan. When I objected, Kerry said thatshe will remove me as a director if I don’t go along with the proposed diversification. Isthis possible?
Separately I understand that Kerry has been in talks with ‘Stretchy Holidays’ about thepossibility of running yoga retreats in Europe later in the year. Kerry says that she willdo this in her own time. ‘Stretchy Holidays’ had approached the Company a couple ofmonths ago to do a collaboration in Europe but Kerry and I had decided to focus onexpanding the London business.
Confused on how to best structure the response & then outline the claims.
So far, the main issues I've identified:
(i) Validity of the transaction with Better Builders (unlikely, since approval from all shareholders were not obtained);
(ii) Validity of A's removal as director (being the minority shareholder) by majority shareholder;
(iii) Private talks with another company SH by K - not being ratified within the directors' duties?
(iv) inability to pay back the loan put in by A, (so an assessment of all the relief measures she could enforce)?
Thank you so very much in advance for any help/ insights you may have!!
Company Law Problem Question: Help PLEASE.
|TSR's new app is coming! Sign up here to try it first >>||17-10-2016|