Kindly answer this

QUESTION

Company-A( Shirley -director) (whichmarketscomputersoftware)and

company - B (Laverne- director) (whichrunsa computertrainingcollege)enterintoanagreementtoformanewcompany, company C.

Company C is to provide onsite computer training for retail businesses that usecompanyA'ssoftware.Shirley (a directorofcompanyA )andLaverne(a director of company B) are authorised by the boards of director s of their respective companiesto,asamatterofurgency,takewhateverstepsarenecessarytoform company C and to secure training contracts on its behalf.

Shirley and Laverne instruct solicitors to register a company. More quickly than they anticipate, they manage to attract a large training job from company Y. Purportedly on behalf of company C, they execute a contract with company Y.They have told the company Y representatives that company C is not yet registered.The parties agree to includeaclausethatprovidesthatifcompanyC(oracompany reasonably identifiablewithit)isnotregisteredwithintwomonthsofthedateofthecontract, then company Y can rescind the contract.

Consider these facts in the light of each of the following scenarios and questions.

1. Assume company C is registered a monthafterthecontractisexecuted.What steps must Shirley and Laverne take to ensure that:

the contract with company Y is binding on company C; and

neither of them is personally liable for the actions of company C under the contract.

2. Assume company C is not registered within thetwo-monthperiod.What remedies does company Y have and against whom?

3. Assume Shirley and Laverne do procure the registration of company C. Company A,companyBand twoindividuals,CandD,becomeitsshareholders.Shirley andLaverneorganisethetransferofassetsfromtheirowncompany,company SL, to company C at grossly inflated values. Company C becomes insolvent and a liquidator is appointed. Once registered, neither Shirley nor Laverne have taken any role in the management of company C. Despite this, what remedies might the liquidator still pursue against Shirley and Laverne?