Question 1:

Mei, Wang and Ali are the only shareholders of Futong Pty Ltd. They each own 30 shares in the company. Wang and Ali are the only directors of the company.

There was a dispute between the three of them. Wang and Ali want to change the company's constitution to prevent Mei from ever being a director.

To do this Wang and Ali come up with a plan to pass a resolution of the directors to allow the company to issue 100 shares to Ding their friend for $100,000.

Ding does not like Mei and the company does need extra cash to complete capital works in the company.

REQUIRED:

1. Advise Wang and Ali if they have complied with their duties to the company by doing what is proposed.
2. What can Mei do about the proposed action by the Board?