Question
Five years ago, Tom, Dick and Harry were equal partners in the business of car washing in Sydney. In February last year, they decided to
Five years ago, Tom, Dick and Harry were equal partners in the business of car washing in Sydney. In February last year, they decided to carry on business as a proprietary company. Accordingly, they formed Car Wash Pty. Ltd, which adopted the replaceable rules. Each had 100 $1 shares. All three were directors and all profits were distributed by way of salary to directors. In November last year a dispute arose because Tom and Dick wished to diversify by opening a chain of hair dressing salons in Dubbo. Harry dissented vigorously and as a result Tom and Dick convened a general meeting of shareholders and removed him from the Board. Harry now wishes to sell his shares but the Board refuses to allow him to transfer the shares to an outsider, and the Board refuses to pay more than one dollar per share. Car Wash Pty. Ltd. has a net asset value of $30,000. Advise Harry of his rights at common law and under the Corporations Act.
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