Question
Paul, Mark and Maria each own two yoga studios. They decide to form a company, Move Pty. Ltd., to run them all. Paul holds 25%
Paul, Mark and Maria each own two yoga studios. They decide to form a company, Move Pty. Ltd., to run them all. Paul holds 25% of the company's shares and Mark and Maria hold the remaining shares between them. All three are directors of the company. Paul believes that the company should spend more money on advertising its yoga classes, and that Mark and Maria are too conservative in their choice of instructors who Paul thinks are all too old and boring. He has expressed these views to Mark and Maria on many occasions, but they have rejected his arguments. Paul discovers that recently, Mark and Maria have held directors' meetings in his absence. Furthermore, at a general meeting of the company held last week, they used their majority voting power to increase their own directors' salaries substantially, whilst keeping Paul's salary at the same figure. Mark and Maria now wish to acquire Pauls shares. They make an offer far below their real value and when he refuses the offer they use their majority voting power to remove him as a director. Under the company's Constitution, Paul is unable to sell his shares to a person outside the company without the consent of the directors. Mark and Maria have stated categorically that they will refuse to give their consent to any such transfer. Required Advise Paul whether Mark and Maria have appropriately exercised their powers as directors and, if not, what remedies may be available to Pau
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