Question
QUESTION 5 Maria and Simon are the two directors of XYZ Systems Ltd, a computer systems applications company. Together they own 75% of the shares
QUESTION 5
Maria and Simon are the two directors of XYZ Systems Ltd, a computer systems applications company. Together they own 75% of the shares of the company. The rest of the shares of the company are divided between Molly (8%), Bart (5%), Rita (10%) and Suzie (2%).
Maria and Simon are very excited about the software that has been developed by their company. They believe that it will revolutionise the market. They decide to sell the software considerably below market price to M&S Pty Ltd, a company they control. M&S Pty Ltd uses the software and as predicted, the software is a hit and their business flourishes.
- Can the directors enter into such a transaction and have they breach any of their duties?
- What can a shareholder do in respect of such breaches of director's duty? What are the remedies available to the shareholder?
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