(Corporate Law)

QUESTION ONE

Good Guys Developments Ltd ("Good Guys") has not paid any dividends to its shareholders in three years. When it finally paid a dividend it was very low. This was far below the expectations of its shareholders given the extreme profitability of the company in the last four years.

The directors of Good Guys of had decided in each of these preceding years to use profits for the sole purpose of expanding the business into low socio-economic areas in order to improve employment and provide budget accommodation for Australians struggling to find accommodation in the soaring property market in the Australian cities.

REQUIRED:

A group of shareholders wants your advice as to what can be done to force the board to declare higher dividends. (Corporate Law)