Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

David and his sister Donna incorporated a private limited company, under the name Right Lifestyle Limited (RLL) which specializes in healthy meals. One month before

image text in transcribed
David and his sister Donna incorporated a private limited company, under the name Right Lifestyle Limited (RLL) which specializes in healthy meals. One month before the incorporation of RLL David entered into a contract with Vegetables Supplies Ltd for the supply of 500 pounds of carrots signing the contract in his own name. The carrots were supplied to the company upon incorporation, and Vegetables & Supplies Ltd is insisting that they have a legally binding agreement with RLL. After several disagreements with David. Donna has indicated that she will be selling her shares to Jeff an old school friend who is a prominent banker. David is insisting that as an existing shareholder, he should be given first option to purchase the shares that Donna is offering to her friend, especially since this is a clause set out in the Articles. However, Donna is insisting that she can sell her shares to whomever she wants since the shares is her personal property. In January 2020 the company made a profit and the board of directors decided to plough back the profit into the business, since the company is in the process of embarking on a lucrative project. However. Donna is insisting that dividends be paid to the shareholders, and if not, she is going to take legal action to compel the company to pay. In an effort to raise additional funds for the upcoming project. David is thinking of creating a fixed legal charge over all RLL fixed assets in favour of Bank Ltd. The company had created a previous charge in favour of Cash Ltd where they were given the right to use the assets until the order was withdrawn. The company is contemplating that in the case of liquidation which charge would take priority in payment Advise Right Lifestyle Limited (RLL) on all the legal issues arising from the above case

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Constitutional Law A Contemporary Approach

Authors: Gregory Maggs, Peter Smith

5th Edition

1684675715, 978-1684675715

More Books

Students also viewed these Law questions

Question

Why do you think this problem has occurred?

Answered: 1 week ago