Jake Kapa is the chairperson of Kapa & Associates, a firm of management consultants. Jake has seconded Kate Steel, a junior consultant, to advise Ironwright Ltd, a struggling company. Larry Zinc is the sole director and shareholder of Ironwright. After several months, Larry is following Kate's advice on all matters relating to the business. In turn, Kate is following the instructions of Jake. A year later, Jake and Kate are unhappy. Ironwright has been turned around. The value of Larry's shareholding has increased considerably, but they are only earning consulting fees. When a supplier offers a new contract to Ironwright, Jake and Kate form their own company and take the contract for themselves. Larry claims they have breached their duties under section 131 of the Companies Act 1993.

Required: Explain whether you agree with Larry in relation to:

(a) Kate; (15 marks)

(b) Jake. (10 marks)

Question Three: Directors Jake Kapa is the chairperson of Kapa & Associates, a firm of management consultants. Jake has seconded Kate Steel, a junior consultant, to advise Ironwright Ltd, a struggling company. Larry Zinc is the sole director and shareholder of Ironwright. After several months, Larry is following Kate's advice on all matters relating to the business. In turn, Kate is following the instructions of Jake. A year later, Jake and Kate are unhappy. Ironwright has been turned around. The value of Larry's shareholding has increased considerably, but they are only earning consulting fees. When a supplier offers a new contract to Ironwright, Jake and Kate form their own company and take the contract for themselves. Larry claims they have breached their duties under section 131 of the Companies Act 1993. Required: Explain whether you agree with Larry in relation to: (a) Kate; (15 marks) (b) Jake. (10 marks)