Bed & breakfast limited, a private own limited liability company had declared $1M profit after tax. The broad of director have however decided to plough back all the profit into expansion of the business. Mr. Bruce a shareholder in the company does not agree with this and is insisting that part of the profit be paid as dividends to shareholders.

Mr. Bruce has also been advised by his stock broker to invest in another company by buying shares of the company because of its profits potential. Mr. Bruce cannot decide whether he should buy ordinary shares or preference shares and has come to me for advice.

I am required to advice Mr. Bruce on all the issues arising from the case.