Instructions: For this assignment, please ensure that you Issue: Define the legal relevant issue. 2. Relevant law: Identify legal principles from cases and statutes. ... 5. Apply to the facts: Develop legal arguments by applying the law to the facts. 4. Conclusion: Arrive at a considered conclusion. Keep your answers short and to the point.

QUESTION 7 - CASE STUDY 1 (10 Marks) Toys Manufacturers Limited (TML) is a company that manufactures a range of toys, including jigsaw puzzles, board games and, for very young children, sustainably sourced safe wooden toys. It has adopted unamended Model Articles for Private Companies. In its latest filed accounts, TML's net asset value was $7,500,000. Karen Finch holds 12% of TML's shares. She has never been formally appointed as a director, but for the last five years has regularly attended and participated in board meetings. She has 18 years' experience in the toy manufacturing industry and has been able to provide invaluable advice to TML. TML's board has been seeking new office premises recently. Karen has proposed that the company lease from her a suitable property that she owns, for an initial premium payment of $800,000. The lease would be for 10 years at an annual rent of $200,000. TML is also proposing to appoint a new director, Ainsley Hunte, with the offer of a three-year, fixed-term service contract. Advise the TML board on: a) the steps it needs to take to: appoint Ainsley formally as a director; grant him the proposed service contract; (6 Marks) b). Whether Karen could be regarded as a director of TML and, if so, the consequences of her granting the proposed lease to TML. (4 marks)