Question
delicious Desserts Ltd was incorporated two (2) years ago by Louise, David, George, John and Claire after they had run the business as a small
delicious Desserts Ltd was incorporated two (2) years ago by Louise, David, George, John and Claire after they had run the business as a small partnership for many years. They specialise in the production of luxury chocolate desserts and their success meant that they wanted to enjoy the benefits of limited liability whilst all remaining involved in the business as they had done before incorporation. The company's articles follow the Model Articles but also contain the following provision:
'David shall be entitled to be the company's deputy managing director for life. On any resolution to remove him from office, the shares held by him shall carry three votes per share.'
Louise, David, George, John and Claire each hold 20% of the issued share capital of Delicious Desserts Ltd. George, Louise and David are the company's directors. Louise and David wish to develop a new non-chocolate related product, but George, John and Claire are opposed to this. At a forthcoming meeting, George, John and Claire are planning to propose a resolution to remove Louise and David from their directorships.
Louise and David have been given advanced notice that they will be facing a resolution to remove them and, as such, they have approached you for advice on the procedures that must be followed to remove them, whether they can be removed as directors, and if there is anything that they can do to fight this.
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