Company Law Assignment - (Doc)

Report

Table of Contents
INTRODUCTION...........................................................................................................................1
PART-A...........................................................................................................................................1
A). Advising May, Harry, Tim and Belinda in order t understand their roles and fiduciary
duties............................................................................................................................................1
PART-B...........................................................................................................................................5
Advising Mark, a minority shareholder, regarding possible actions that can be taken against
directors.......................................................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Company law should be followed by all businesses in order to work under rules and
regulations formulated by government that helps to maintain business operational activities.
There are different types of roles and responsibilities will be assessed in this report in context of
directors in order to understand mistake taken by them. Company law 172 and 175, 174 will
apply for this scenario or business case study. An advice related to the case study situation is
provided at the end of report in order to provide information whether they have breached any of
their roles, responsibilities, administrative or fiduciary duties as directors of Jupiter publication
Ltd.
PART-A
A). Advising May, Harry, Tim and Belinda in order t understand their roles and fiduciary duties
According to the case study there are four directors of a company Jupiter Publications Ltd
which was formed in 1998. Each one of them is covering 15% of the business shares effectively.
Remaining 40% share belongs to the other five investors who largely remained passive. There is
a person Peter Higgins who is a writer and publish books who had also made a deal with Jupiter
Publications for a political thriller which he was writing currently. The book of Peter also
featured interns in The White House being brain washed into becoming political assassins
effectively (Chang, 2018). In case peter said that he want a advance fee for the book. The board
members refused to pay to peter as they also mistakenly believed that there is no record available
of peter in publishing saleable stories. May knows that peter has published a few stories
successfully using different pen names. Tim and May both be happy with this. It can be said that
there are different activities made by May and Tim and both are connected to each other. May
made an instant agreement with peter knowing that he is successfully updating stories. When
Tim and Harry found involvement of May with Peter they decided to take a legal action against
May and Peter. May produced evidences which shows that there is no agreement made between
Jupiter publications and Peter Once, he also discovered that Jupiter publications had ending
lawsuits over copyright infringements effectively. Board also passed a resolution in which there
are no proceedings taken against Tim. They organised a shareholder meetings which ratify
breaches of duty on May and Tim Part. These two also voted in the favour of resolution. These
two made a mistake against firm. The two owners are liable for all this condition within business.
Tim and May both failed to think long term profits for the firm and themselves. In case they both
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are is in breach of Section 172 in which the action can be taken by only board members and
failure to consider stakeholders would also constitute as a breach. They both are aware of
situation of Peter that he is a successful writer using alternative names but kept the information
between them (Ferran, 2016). Thus, the firm mistakenly found Peter as a wrong involvement
person and decided to cancel the contract, Tim and May both are not able to complete their
fiduciary duties and have reached to breached on their administration duties effectively. In this
case, they put themselves in a situation of conflict. However, the action taken by firm against is
right from the point of view of Harry but Tim was earlier involved in the situation and
information with May.
Apart from this, their mistake prevents them to grab an opportunity of corporate
development and improvement in terms of profits and production. In this section the opportunity
is diverted by company itself in terms of these all four directors with involvement of Tim and
May specially and effectively. Directly or indirectly their mistake steals a customer of business
and also misappropriate assets of company is made. In this conflict of interest, the following case
study is linked to Section 175 CA 2006. According to state 175 (1), a business director must
avoid a situation where he or she has or have an indirect or direct interest that conflict or may be
conflicts with the business interest efficiently. The duty is breached by both Tim and May simply
by avoiding a situation where there may be a chance of conflict of interest. Section 175 (2),
reflects a principle in Cooley V IDC which applies in a situation in specific exploitation of any
information, opportunity or property (Hu, 2015). A director is also able to keep his or her
personal profit if the shareholders are consent by resolutions. In addition to this, it can be said
that a director is also able to take benefit and advantage of a corporate opportunity in his or her
own account if the business has already considered the same thing or proposition rejected in a
good and effective faith. According to this, Tim and May are able to take advantage of
opportunity from Peter in terms of publishing the book which will definitely increase their
profitability and production. In addition to this, May take advantage of this opportunity and
should not guilty about the connection made with Peter effectively. A disadvantage is their that
only Tim and May knows that the publication will rock and help business to increase profits. In
this case, they should aware other board members Harry and Belinda that they are making
mistake by refusing proposal of Peter (Ng, 2015). There is a valid authorisation also provided in
the Section 175 (5) in which authorisation prevent the action from becoming a breach
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