Anthony, Betty and Carlton are the Directors of Modern Jamaica Tech Ltd, a company whose main objects are to engage in the business of computer software development and 'any other business which, in the opinion of the Directors is in the interests of the company'.

In November 2012 the company was approached by Frankie, a computer games software designer, who wished to sell one-half of his interest in certain products which he has designed but not yet launched on the market. At a meeting attended by all three Directors and Frankie the possibility of such a joint venture was discussed but rejected by the company on the grounds that, given the volatile nature of consumer demand and the fast changing nature of the computer games market, the venture was too risky. In January 2013 Frankie approached Anthony, Betty and Carlton with a view to obtaining their personal involvement in the venture. Anthony declined but Betty and Carlton accepted Frankie's invitation. They incorporated a new company, Betcar Technologies Ltd., with Betty and Carlton each holding on-half of the issued share capital in the company; they were also its two Directors. This arrangement was not disclosed to Modern Jamaica Tec Ltd.

In April 2013 Modern Jamaica Tech Ltd was taken over by Prosperous Computer Ltd. And Anthony, Betty and Carlton were replaced by nominees of Prosperous Computers Ltd. The new Board of Directors has now learned of the Betcar Technologies Ltd project and that the initial investment made by Betty and Carlton has tripled to 25 million Dollars.

Advise Modern Jamaica Tech Ltd

Mark Scheme:

Proper identification of the legal issues involved 5 marks

Reasoned argument of the relevant laws 30 marks

Application of law to issue 10 marks

Conclusion 5 marks

Total