Question 1

Rocky intends to incorporate a private limited company by shares. Rocky has also instructed Megan to assist in the incorporation of the company. Rocky intends to name the company; Lucky Sdn. Bhd. References with the registrar revealed that a company that was registered back in 2010 carries the name Luckie Sdn. Bhd. The nature of businesses for both entities are however different. Last week during a wedding reception, Rocky's friend Roy informs him that it is compulsory for private limited companies to have a company secretary and that the company will be fined without appointing one.

In a separate situation, Megan had on behalf of the company entered into a contract for the purchase of furniture and other electronic equipment from Techno Sdn. Bhd. In return, Techno Sdn. Bhd. has given Megan a voucher for a three-night stay at a beach motel costing only RM50 per night.

With references to the above question, answer the following questions.

a. Advise Rocky in relation to general issues of registration and companies as mentioned in the facts above.

(5 marks)

b. Advise Megan if she has breach her duties. Would your answer be different if these were discovered after the company was successfully incorporated?

(15 marks)

Question 2

Pepper Sdn. Bhd. was incorporated on the 15th of July 2018. The company's object clause provides that the company "specializes in the manufacturing of the custom made furniture". Over the years, business at Pepper Sdn. Bhd. has been flourishing and the company has decided to collaborate with Salt Sdn. Bhd.; a company limited by guarantee that is incorporated in Malaysia.

During the company's first annual general meeting, the board of directors have revealed that Sarah, the company's promoter had appointed Jinggle; her classmate from the same University as the company's accounts manager. The board of directors are alleging that although this information although was disclosed, Jinggle's examination results and work performances was not sufficiently disclosed to the board of directors before her appointment was officiated. The board of directors are of the opinion that this is a breach of Sarah's duties as promoter.

In a separate scenario, it was revealed that Salt Bhd. had to be wound up due to a plunge in its profits. Pepper Sdn. Bhd. wants to claim for the outstanding accumulated debts from Salt Sdn. Bhd. but was advised that the company is prevented from doing so due to the existence of the 'corporate veil.

With reference to the facts above, answer the following questions:

a. Pepper Sdn. Bhd.'s claim against Salt Bhd.

(5 marks)

b. Discuss Sarah's probable liability in this question.(15 marks)