Tuesday, August 13, 2019

Company law Essay Example | Topics and Well Written Essays - 1000 words

Company law - Essay Example Rangers Ltd can proceed with the proposed alteration if Muna continues to express interest with the rival company. However, Kumar illegally helped his cousin acquire shares in the company posing a threat to the legal procedure; this is also another legal issue, which is actionable in a court of law, but it is unfortunate that mark is not aware of the issue. This is because nepotism is illegal according to the law and parties should not favour their relatives over other partners. Kumar abused his position as the managing director to promote his relatives. By telling his cousin to support his decisions, he corrupts the process of decision making for the company. This means that all decisions were in his favour but not for the well-being of the company and other shareholders. It is evident that proceedings Rangers Ltd in the have been for the interest of the Kumar as there are only three directors in the company. This is a serious offence and Kumar should as well be terminated from the company. It is evident that the two want to attain full ownership of the company under majority shares. The third shareholder is a determinant where the party he supports attain the majority opinion, which is considered in ruling out their case by voting. The majority rule favours Kumar who has the support of Mark, such a situation reduces the chances of Muna succeeding in his accusations. They should follow the procedure outlined in the business ethics. It illustrates that liaising with another company with an aim of combining shares is against the law. The initial Article of Association is significant in showing the duties and responsibilities of individual. All directors are subject to the article and thus Muna should be answerable in a court of law action as far as is actions are concerned. This adds to why the company is justified to take legal charges against Muna (Geltzer & Trainor, 2010). According to the previous case laws, the company should be the complainant and not indi vidual shareholders. Therefore, the three should all support each other in filling the case against certain decisions. This points out that the proposed alterations cannot be made until the final ruling is done. The statute in the Company’s Directors Disqualification Act of 1986 states that if the director goes against the rules of the company then disqualification is a disciplinary measure. Under the companies Act of 2006, any member is prevented by law from selling any shares from the company without an agreement from other members and shareholders. In addition, the agreement for sale or shifts of shares must be by all the members. The proper claimant principle helps in ruling a case where the company is the sole complainant. However, in this scenario, there is a tag of two members against one thus the common law that protect the minorities is enforced based on the argument presented. Some of the members’ rights have been infringed, and thus the exceptions are applic able for this case (Aiman, 2008). All occurrences must be considered to achieve a fair ruling on all parties. For the two shareholders to add clauses to the current article all members must be present to avoid fraud. This ensures that they are both heard and a base for their argument established. Muna is not justified in assuming more control for the company since he is a director and Kumar is above him as the managing director; his actions are against all ethics of company law thus should face

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