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Accounting & Consulting Accounting Posted 4 years ago

Fixed Price

Budget: $30
Delivery by October 31, 2012

Start Date

October 20, 2012


Rangers LTD is a company that was registered ten years ago and specialises in providing outdoors activities to disabled children. Kumar, muna amd mark are the shareholders and directors of the company. Kumar had helped his cousin, Muna to become a shareholder hence director of the company by granting him an interest free loan. In return, kumar had hoped that Muna would always vote as director by him and that Muna would sell his shares to him after a period of five years at a price to be fixed by Kumar. During the first two years of the business, Muna voted as directed by Kumar, however, recently muna started disagreeing with kuma on company matters and has repeatedly turn down kumar's offer to buy his shares. Instead, muna is trying to assume more control in the company as its profit margin has increased in recent years. Kumar and  Mark have also discovered that muna is diverting part of the company's business to a rival company in which he has an interest.

kumar now wishes to alter the company's articles of association so as expel muna from the company by buying his shares, since mark is not interested in acquiring more shares in the company. The new articles would read as follow. Any member who carries on business competing with the company shall be required by the company, by ordinary resolution, to sell his shares to the members at fair price to be fixed by the directors.

muna is threatening to commence legal action preventing Rangers LTD from altering its articles. You are legal team summoned to attend  a case conference. kumar, who is also the managing director of the company, has asked your team to prepare a legal analysis of the relevant company law issues raised in the above scenario and advise whether:

a) Rangers LTD can proceed with the proposed alteration
b) what difference, if any, would it make to your answer if the alteration were to read as follows:
the company could by ordinary resolution require any member to sell his shares to the other members at faire price to be fixed by the directors

Skills: analysis

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