Question
1. The company constitution of a new company, Happy Life Pty Ltd, stated that Willem was to be its company solicitor. Willem wrote the constitution
1. The company constitution of a new company, Happy Life Pty Ltd, stated that Willem was to be its company solicitor. Willem wrote the constitution on the instructions of the company's founder, Armin. However, Willem was never appointed as company solicitor. Instead, his arch rival Renate got the job. At the time when the constitution was created, Willem was not a member of the company, although he is now. Willem sues for breach of the company constitution. Can Willem enforce the constitution in his favour? (Hint: This problem is based on Eley v Positive Government Security-Life Assurance Co Ltd (1875) 1 Ex D 88, although that case was easily distinguished on its facts.) 2. Adira has just become a co-director and member of Gary's company. Adira wants to amend the company's constitution to embed rules that ultimately favour her rather than Gary. In particular, Adira is proposing that Gary be paid twice the dividend amount he would normally be paid, in return for Adira getting 75 per cent of the company's voting shares (currently, shares are split 50/50 between Gary and Adira). a,Is Adira's proposal permissible under the Corporations Act? b, Advise Adira and Gary. 3. Kelly and Jordan are directors of ASP Pty Ltd and jointly own 70 per cent of the shares. Taj holds the remaining 30 per cent of the shares. The constitution provides that Taj will hold the position of the company's 'senior product tester' for the period 1 January 2015 to 1 January 2020. There is no separate written employment agreement. Kelly and Jordan want to remove Taj from the position of senior product tester. Advise Kelly and Jordan. 4. The shareholders of Zedzee Pty Ltd are Sufyaan (10 shares), Shahedah (10 shares), Hilton (10 shares) and Sue (10 shares). The directors are Sufyaan and Shahedah. Upon registration, Zedzee adopted a constitution that replaces all the replaceable rules. Clause 10 of the constitution provides: The maximum number of directors shall be three (3). Clause 11 of the constitution provides: Directors can remove other directors from office by majority vote, except that Shahedah can only be removed by members' resolution approved by 95 per cent of the members voting. a, Sue is dissatisfied with the way Sufyaan and Shahedah are running the company. She wants to alter clause 10 of the constitution to say that there can be four directors. Can she apply
? If so, how? B, Can Sue amend the constitution to remove clause 11? If this occurred, could Sufyaan enforce clause 11 pursuant to s 140 of the Corporations Act? C, Sufyaan and Shahedah are annoyed about Sue's plans regarding the constitution and want to remove her as a shareholder. Could they alter the constitution to allow the company to compulsorily acquire her shares at a stated price? D, Hilton is concerned that Sue might sell her shares to a competitor. If the competitor owned the shares, Hilton is concerned this may adversely impact Zedzee's business. He proposes altering the constitution to provide that shareholders cannot sell their shares to anyone in competition with the company. Would such an alteration be enforceable?
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