Law of Business Organisation Essay - Cookpride ltd

Law of Business Organisation
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Table of Contents
Introduction......................................................................................................................................3
Scenario............................................................................................................................................3
PART (a)................................................................................................................................4
Part b).....................................................................................................................................7
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
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Introduction
Business organisation law is referred to the different ways of business that can be legally
formed under state laws. Along with this, to incorporating as a corporation, the business can be
formed as limited liability companies, partnership and different form of business. There are
different types of organisation operate their business and they set specific, tax, management and
liability benefits and drawbacks. There are different types of law which a company should follow
with respect to carrying out business in a legal manner. The present report is based on the
scenario in which Cookpride ltd is a company that is specialised in manufacturing domestic
ovens and other cooking appliance. This study covers breached duties while carrying out the
business by directors of Cookpride Ltd. Apart from this advice will be provided to Graham, a
minority shareholder in Cookpride ltd that he can initiate any action against the directors of the
company.
Scenario
Jack, Maggie, Kim, and Linda are the directors of Cookpride Ltd, a company which is
specialised in manufacturing domestic ovens and other cooking appliance. Each director of the
company holds 10% of the shares of the company and remaining shares are held by Graham and
four other shareholders. Kim is inexperience and lives abroad and he takes less part in business
activities. Along with this she only occasionally attends boards meeting when use to be in a
town. In the month of January 2016, Board of director received an offer from Mackenzie Snow
for CookPride Ltd in order to manufacture Snow’s newly patented design for heavy duty
commercial fridge’s in respect to return for a percentage of profits which comes from sales of the
products. Snow’s was designed that can be used for Aerofoils so that energy in the commercial
open fridge can be saved and from laboratory test, it shows incredible potential energy savings.
In the Month of March, the board convened to discuss Snow offer and Jack advised the board to
reject the offer invention which was done is different from the company existing lines. Along
with this Jack is supported by Linda and Maggie for rejecting the proposal. Since after sometime
in the month of July Jack resigns and incorporates Hardhome Ltd. To acquired snow’ patent and
started manufacturing the commercial fridges and make the huge profit. However, Cookpride
spotted serious irregularities in the last two sets of annual accounts. From investigation it is
identified that Jack had secretly been defrauding Cookpride ltd for significant sum of money.
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