1) Discuss how a company is classified according to the liability of its members.

2)a) Joseph is a shareholder of AAPPP Sdn. Bhd. and holds 40% of the shares. Piles and Miles are the directors as well as the shareholders of AAPPP Sdn. Bhd., a company that specialises in the manufacturing and sale of herbal products. Each of them owns 30% of the company's shares.

The company has three other directors. It was recently discovered that Piles has established a partnership with Charles. Their firm, Herbswonder & Partners also deals in the manufacturing and sale of herbal products. Last year, AAPPP Sdn. Bhd. entered into a contract with Herbswonder & Partners for the purchase of RM400,000 worth of herbal products. When Joseph protested over this matter, the directors called up for a general meeting and ratified the matter as majority shareholders. AAPPP Sdn. Bhd. is also keen to purchase a plot of land from Miles who owns a land in

Segamat, Johor which is worth RM2.6 million. Miles has offered to sell the land for the said price.

(i) Advise Joseph whether there has been a breach of duty by the directors of AAPPP Sdn. Bhd. Under the Companies Act 2016 in relation to the purchase of the herbal products. Support your answer with any relevant case law.

(ii) Advise AAPPP Sdn. Bhd. whether it can successfully purchase the land from Miles.

(b) Keong and Kon have been appointed as the directors of KingKong Sdn. Bhd., a company which was incorporated one month ago. They intend to appoint their friend Dino, who just graduated with a Bachelor's Degree in Chemical Engineering as the company's auditor.

(i) Advise Dino whether he qualifies to be appointed as an approved company auditor in Malaysia.

(ii) Keong and Kon are unsure and are concerned on the procedures involved in removing an auditor if there is a need to do so. Explain to them whether they can remove an auditor any time at their option or whether there are any available procedures under the

Companies Act 2016, which may afford an auditor some protections from such removal.

3) a)ABCD Bhd. was incorporated in the year 2016 and has suffered losses over the last two years. Advise the Managing Director of the company whether the company can pay a cash dividend using its capital. Support your answer with reference to the Companies Act 2016.

(b) Examine the capital maintenance rule with reference to a case law.