Question
Joy, Doug, Sky, Max, and Guy were directors and shareholders of ABC Pty Ltd. The company has one class of shares - ordinary shares. Guy
Joy, Doug, Sky, Max, and Guy were directors and shareholders of ABC Pty Ltd. The company has one class of shares - ordinary shares. Guy resigned from his director position as a result of a disagreement with Joy, Doug, Sky, and Max. Guy is a minority shareholder. He was also dismissed from his position as Business Development Executive (BDE) without a valid reason. He remembers that he was asked and invested in the company, provided that he was employed as a BDE. All other directors agreed that this agreement was to be embodied in the company's constitution. In response to his resignation, the directors wanted to dilute his shareholding. Joy, Doug, Sky, and Max called a general meeting of ABC Pty Ltd where they motioned to insert a new provision in the company's constitution which gives Joy, Doug, Sky, and Max the right to compulsory acquires Guy's shares for their issue price. This was done by way of a special resolution. They also issued additional shares for their mutual friend Oscar, who was not a member of ABC Pty Ltd at that time. Guy was not invited to the general meeting and was not informed about this decision. He is unhappy and wants to know about his rights as a member. Moreover, Guy claims that the directors did not act objectively fair on his part because this would have entailed offering the shares to existing members in proportion to the shares they currently hold. The company's constitution also has the provision to reflect the above right. QUESTIONS: (IRAC is required) Advise Guy about any legal rights he may have against shareholders and the company by citing relevant Australian law.!??
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