Company Law Case Study Assignment Questions and Answers

Company Law Assignment Solutions to Questions

 

Assignment Details:-

  • Topic: Company Law
  • Subject: Law
  • Number of Words: 3500
  • Citation/Referencing Style: Harvard

 

 

Maliha Ahmed was appointed marketing director of Watlings Ltd (“the Company”), a company specialising in corporate hospitality, in 2019. She, like each of the other three directors, holds 10% of the issued share capital of the Company, with the remaining 60% held by other shareholders. The terms of her service contract provide that she is to hold office for five years.

The Company has adopted the Model Articles (2008/3229, Schedule 1) in their entirety, save that the provision below has been added to article 3.

The directors have the power to negotiate contracts on behalf of the Company

a)      as long as these fall within the Company’s business and
b)      do not exceed £50,000 in value.

 

Any contracts and transactions exceeding this value require the collective consent of the board of directors and an ordinary resolution passed by shareholders at a duly convened meeting.

Ms Ahmed recently negotiated a contract with Bluster & Bluster Ltd, a manufacturer and supplier of tents, gazebos and blinds, to add gazebo and tent hire to the Company’s range. The combined cost of acquiring tents and gazebos comes to £65,000. She believes this extension of the Company’s services to be a good business decision but did not discuss this with her fellow directors before entering into the contract with Bluster & Bluster Ltd. Nor was the transaction placed in front of shareholders for their approval.

The other directors of the Company are not convinced that her ‘renegade’ decision benefits the company and decided that Ms Ahmed should be removed from her directorship. They placed a resolution before the shareholders in general meeting that Ms Ahmed be removed from office. The resolution was duly passed.

Ms Ahmed was at that meeting and made a statement that she intended to take legal advice, insisting that she could not be removed in breach of her service contract. The remaining directors of Watlings Ltd have come to you for advice.

 

You are required to draft a statement for the board of directors by making reference to relevant statutory provisions and cases explaining

a) Watlings Ltd’s position with regard to the contract with Bluster & Bluster Ltd;
and
b) Ms Ahmed’s authority and potential liability, if any, for entering into this contract;
and
c) whether Ms Ahmed acted in the best interest of the company, thus complying with her statutory duty under s 172(1);
and
d) whether the resolution by the shareholders to remove Ms Ahmed was passed with the requisite authority and following proper procedure;
and
e) what is Ms Ahmed’s position following her removal with regard to her service contract?;
and
f) what other legal redress, if any, Ms Ahmed might seek from the Company and/or from the other members (only consider matters of company law here, do not address employment law claims for wrongful or unfair dismissal)?

 

Learning Outcomes

In undertaking this assessment, you will

•       reflect on and integrate feedback received on your first sit submissions;
•       consider the practical aspects of running a company;
•       access relevant resources to research information;
•       consult relevant statutes and case law to support your findings; and
•       write a concise and accurate draft statement on the aspects identified in the brief.

 

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