Jelly Pty Ltd (Jelly) has five shareholders: Adam, William, Michelle, Janet, and Marie. Adam, William and Marie own 90% of the shares and are also the directors of the company. Janet and Michelle owned 5% of the shares each. Over the years, the company flourished and the directors decided to expand the business and discovered that they needed some extra capital. Accordingly, the board of directors passed a resolution to raise capital by issuing debentures to the general public. On the urging of the directors, Adam put an advertisement in Investors Weekly for interested investors detailing the rights and obligations that came with the debenture. Unknown to the rest of the directors, Adam is also a shareholder in several wholesale companies that had a policy to pay bonuses to shareholders who employed their services. Adam always made sure that Jelly contracted with these companies. When Janet discovered this, she raised her concern with other directors but no one took her concerns seriously and nothing was done about it. As a result, Janet became very upset and wanted to take legal action against Adam but she was not sure what her rights in relation to this matter are. After a certain period, William and Marie stopped being involved in the business of the company and they relied on Adam for all matters. Adam decided that the company should expand and start being involved in the synthetic business. An expert report, which was sent 2 to all the directors of Jelly, clearly stated that the expansion in the synthetic business was not a good idea. Adam called for a director's meeting and put his proposal to them. Marie was absent from the meeting. William was in a hurry to go to a Golf tournament so he said that he trusted Adam and he supported him in all matters. Accordingly, Adam was able to start the new expansion plan. But the expansion led the company to suffer a loss of $ 1 Million. Even though the company remained solvent, it was a wake-up call for Michelle who was no longer happy with the company's management. Michelle asked the directors to call for a members meeting to pass a resolution to remove Adam from his position and appoint a new director in his place. The board of director dismissed Michelle's proposal noting that the resolution cannot be passed. As a result the meeting would be a waste of time for everyone. So they refused to call the meeting. Adam was upset by Michelle's action and he decided to call for a meeting to change the company's constitution to expropriate the shares of Michelle.

Advise the company, the directors and the members on their rights and obligations. Mention the sanctions that will apply if a breach of the law has occurred.