Business Law Assignment: Company Law and Director Obligations

This business law assignment delves into critical aspects of business structures and corporate governance. It begins by evaluating the suitability of different business structures, such as partnerships and companies, for specific scenarios, emphasizing the ease of formation and the regulatory requirements. The assignment then explores trademark law, examining how trademarks are utilized to protect brands and differentiate services and goods. Furthermore, it investigates the responsibilities and obligations of company directors, referencing key legal cases to determine breaches of duty, including loyalty and care. It also analyzes shareholder rights, particularly in relation to financial information and participation in company management, while discussing potential remedies for minority shareholder oppression. The document provides a comprehensive overview of business law principles, offering insights into the legal aspects of business operations, corporate governance, and shareholder rights.

Running head: BUSINESS LAW
BUSINESS LAW
Name of the Student
Name of the University
Author Note

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Question 1
The issue in the given scenario is that to what degree the statement of the lecturer can be
considered to be adequate in relation to the appropriate business structure.
A ‘general partnership’ or simply a ‘partnership’ is considered to be formed or
established when two individuals or more than two individuals may commence and continue a
particular business that is in common with the motive and the viewpoint of making profits.
Usually, the maximum quantum of partners that may be permitted in connection to a partnership
business is the twenty. The partners who may be involved in a specific partnership business may
be corporate institutions or certain individuals. The concept of distinct legal personality does not
exist in case of partnership. The assets relating to the partnership are collectively owned by the
partners and each partner shall be considered to be separately accountable regarding the
liabilities and debts arising out of the partnership. There shall be no limit regarding the private
accountability of the partners in connection to the entire debt amount. Although, it may be said
that the partners may decide the ratio in relation to their respective accountability in connection
to the losses and debts of the business. Regarding the formation or creation of partnership, it
must be mentioned that formal steps are mandatory to establish a partnership. As long as the
existence of a particular relationship is in force, where two individuals or more than two
individuals continue with a business with the common intention of making profits, the law shall
identify and acknowledge the presence of a partnership. Section 2 as provided in the Partnership
Act generate certain specific rules and guidelines in connection to the determination of the fact
that whether there is any existence of a partnership. A particular agreement between the partners,
which may be written or oral, gives effect to a partnership (Lin, 2019).

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A company is considered to be an entity or a body, which is registered as per the
Companies Act. A company has a distinct legal existence separate from its managers and other
members. Specifically, a private company or organization is one which confines or limits the
right and privilege of the members in connection to the transference of their shares in the
organization or company. In case of a private company, the maximum quantum of members shall
not be more than fifty. A limited shares private organization or a company would mean that the
accountability of the members shall be restricted to the unpaid amount in relation to the shares
that are held by the members. A company shall be able to start a business only after the company
is incorporated and the ‘certificate of incorporation’ is received. It is essential that a MOA and an
AOA (Memorandum and Article) is prepared by the management of the company before the
commencement of the business (Kashyap & Parihar, 2019).
Therefore, it may be said that in the given scenario, the most suitable business structure
for Ong, Chong and Tan would be the partnership form of business, as it is easy to start a
partnership business. However, a company form of business would require a huge amount of
paperwork as it is essential that the company is incorporated and the ‘certificate of incorporation’
is received, and a MOA and an AOA (Memorandum and Article) is prepared by the management
of the company before the commencement of the business.
To conclude, it can be said that the lecturer’s advice can be considered to be adequate in
relation to the appropriate business structure.

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Question 2
The issues in the provided scenario are as follows:-
a) What shall be considered to be a trademark and how it may be possible for the brothers of
Charles to utilize trademark in relation to the companies that are governed by them.
b) Whether Mrs. Ong, Barry and Andy have violated their responsibilities as the directors of
Bougainville Garden Pte. Ltd, and what might be the consequences that might be faced
by them.
c) What shall be the rights that Charles may possess by being a shareholder of the company
named Bougainville Garden Pte. Ltd, and what shall be the remedies that may be availed
by Charles as per the common law or the Companies Act.
A trademark shall be considered to be a symbol, like a logo or a brand name, which is
utilized by a business in order to distinguish between the services and the goods that are
produced by them. In the nation of Singapore, a trademark is protected in order to protect it as
per the Trade Marks Act of the year 2005. Although, one may seek protection and fortification
(in case the trademark is not registered) as per the common law right relating to ‘passing off’
(Wang, 2018).
The case of Percival v Wright [1902] 2 Ch 401 shall be considered to be a significant
case in relation to the obligations and responsibilities of the directors in any particular
organization. In this particular case, it was held that the directors shall be obligated towards any
specific organization on the basis of loyalty. Their responsibility shall not be extended in respect
individual shareholders. The principle forwarded in this case is regarded as good law. The ruling
of this case was followed in the case of Johnson v Gore Wood & Co [2000] UKHL 65.

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The case of Coleman v Myers [1977] 2 NZLR 225 must be regarded as an important case
in relation to the responsibilities of the directors. In this case, it has been stated that the directors
have certain distinct responsibilities in relation to the shareholders of the organization and such
responsibilities are considered to be of fiduciary nature. It shall be the obligation of the directors
to provide full information to the shareholders, and the directors should evade from misleading
and deceiving the shareholder, in instances where the approval or action of the shareholders is
essential. The disclosure will relate to material considerations having an effect on the
management of the company.
In the case named Re D'Jan of London Ltd [1994] 1 BCLC 561, the director was
performing his responsibilities in an honest manner and put his signature on the form that was
provided to him. However, it was held that the director violated his responsibility to show care
and diligence to the organization. In the case of Norman v Theodore Goddard [1991] BCLC
1028, a particular question was argued and discussed. The question related to the fact that how
much skill and care must be shown by a particular director in relation to the organization. It was
stated that the quantum of care that must be shown by a director in relation to the organization,
should be in accordance to the care that may be shown by any particular reasonable or rational
individual.
The case of Ezion Holdings Ltd v Teras Cargo Transport Pte Ltd [2016] SGHC 175 must
be regarded as an important case in relation to the rights of shareholders. This particular case
primarily discussed the right of any particular shareholder in relation to financial information and
data in an organization. It is very evident that any particular shareholder in an organization do
not possess the right to attain financial data or information of the organization. A shareholder
shall only have the entitlement to be informed about the audited and inspected financial records,

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which are presented at the ‘annual general meetings’ (AGMs). The rights that may be possessed
by the shareholders are the the right to dividends after dividends are declared, right of voting, the
right of appointing and removing directors, as well as the right of altering the constitution of the
company. The management and administration in relation to the company shall be performed by
the directors and usually the shareholders are not involved in such matters. Hence, if there is no
participation on the part of the shareholders in relation to the management and the administration
of the company, then the shareholders does not require any unconstrained right in relation to
financial information. However, if no AGMs have been held or any AGM is postponed, and the
shareholders are unable to receive any information regarding the financial status relating to the
company, then the shareholders may make a particular application as per section 216 as provided
in Companies Act of Singapore in connection to oppression of minority.
A trademark shall be considered to be a symbol, like a logo or a brand name, which is
utilized by a business in order to distinguish between the services and the goods that are
produced by them. The brothers of Charles shall utilize a trademark as per the Trade Marks Act
of the year 2005, in order to protect the symbol or brand of their companies and distinguish their
companies from the original company.
Applying the case of Percival v Wright [1902] 2 Ch 401 and the case of Johnson v Gore
Wood & Co [2000] UKHL 65 in the given scenario, it may be said that the directors of
Bougainville Garden Pte Ltd shall be obligated towards the organization on the basis of loyalty.
Their responsibility shall not be extended in respect individual shareholders.
However, applying the case of Coleman v Myers [1977] 2 NZLR 225 in the given
scenario, it may be said that the directors of Bougainville Garden Pte Ltd have certain distinct
responsibilities in relation to the shareholders of the organization and such responsibilities shall

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be considered to be of fiduciary nature. It shall be the obligation of the directors of the
aforementioned company to provide full information to the shareholders, and the directors
should evade from misleading and deceiving the shareholder, in instances where the approval or
action of the shareholders is essential.
Applying the case of Norman v Theodore Goddard [1991] BCLC 1028 in the given
scenario, it may be said that the quantum of care that must be shown by the directors of
Bougainville Garden Pte Ltd in relation to the organization, should have been in accordance to
the care that may be shown by any particular reasonable or rational individual.
Therefore, considering the abovementioned cases that are applied in the given scenario,
Andy did not show any kind of loyalty towards Bougainville Garden Pte Ltd, and started his own
company without informing any other member of the aforementioned company. Similarly, in
case of Barry, he commenced another company in the same business without informing any
other member. In case of Mrs. Ong, even though she was not actively involved in the
management of the business, she reaped the benefits of the profits of the company. Therefore, all
the directors of the aforementioned company have caused the violation of their responsibilities as
directors towards the company.
The case of Ezion Holdings Ltd v Teras Cargo Transport Pte Ltd [2016] SGHC 175 shall
be applied in the given scenario in relation to the rights of shareholders. It is very evident that
any particular shareholder in an organization do not possess the right to attain financial data or
information of the organization. Charles shall only have the entitlement to be informed about the
audited and inspected financial records, which are presented at the ‘annual general meetings’
(AGMs). The rights that may be possessed by Charles are the right to dividends after dividends
are declared, right of voting, the right of appointing and removing directors, as well as the right

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of altering the constitution of the company. The management and administration in relation to
the company shall be performed by the directors and usually the shareholders are not involved in
such matters. Therefore, it may be said that if there is no participation on the part of Charles in
relation to the management and the administration of the company, then he shall not require any
unconstrained right in relation to financial information. However, it may also be said that if no
AGMs have been held or any AGM is postponed, and he is unable to receive any information
regarding the financial status relating to the company, then a particular remedy shall be available
to Charles. He may make a particular application as per section 216 as provided in Companies
Act of Singapore in connection to oppression of minority.
To conclude, it may be said that:-
a) Any particular symbol or logo shall be considered to be a trademark and the brothers of
Charles may utilize trademark to protect the symbol and logo of the companies that are
governed by them.
b) Mrs. Ong, Barry and Andy have violated their responsibilities as the directors of
Bougainville Garden Pte. Ltd, and damages might be claimed from them.
c) Charles may possess the rights of being a shareholder of the company named
Bougainville Garden Pte. Ltd, and remedies may be availed by Charles

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Question 3
Among other factors for ensuring proper and adequate growth and advancement of any
particular business, a particular key factor is the availability and accessibility of capitals and
funds. If any particular business wants to expand and grow, then funds and capital are
mandatory. The start-up capital cannot be considered to be enough amount to run and operate
everything in any particular business. Hence, there is always a necessity to raise capital and
funds in relation to a business. It is very crucial that the right and correct method should be
chosen in order to raise funds. Following are certain methods for raising funds.
Firstly, angel investment may be considered to be a primary source of raising and
accumulating funds. An angel investor usually is any person or association willing to make an
investment in relation to a company or an enterprise involving high risk, in lieu of shares in
connection to the business. Such investors may function in a network known as ‘angel network’
that may help to raise huge funds (Harrison, 2017).
Secondly, debt financing is regarded as another noteworthy fund-raising opportunity in
the nation of Singapore. It may be referred to the raising of capital by the sale of bonds, bills or
notes in favor of individual or institutional investors. The investors generally become the
creditors of company and promise is made to them relating to the interests and returns.
Businesses may attain debt financing from the banks and bondholders. Although, it might be
challenging to attain, it delivers capital and fund at minimal interest rates in comparison to equity
financing (Goh et. al., 2017).
Thirdly, venture capital may be regarded as funds that are provided by venture capitalists
in relation to the expansion of any specific business. The venture capital firms specialize in

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creating high-risk portfolios. Apart from capital and funds, the venture capitalists also provide
advice as to how the profitability in relation to the business may be improved. Venture capitalists
generally necessitate high rate regarding return, the common estimation being 25 percent (Gaba
& Dokko, 2016).
Fourthly, crowdfunding is regarded as the newest fundraising technique, which utilizes
technology in order to raise capital and funds from numerous individuals and associations. This
technique relating to fundraising is performed through the internet-mediated archives and
registries. Other ways of raising money with this method include the use of mail-order
subscriptions and benefit events among others (Ang & Kwek, 2020).
Fifthly, ‘Initial Public Offering’, or IPO is regarded as the most noteworthy source to
raise capital in Singapore. In order to raise funds and capital for expansion, a particular company
might sell its shares. The primary advantages relating to IPO or making it public are access to
further fund and capital, increased liquidity, increased prestige, publicity, and easy acquisitions
and mergers (Ho, 2016).
Therefore, it may be said that IPO shall be the best option for Dr. Chan to raise capital
and fund.

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References
Ang, A., & Kwek, S. (2020). Regulation of Crowdfunding in Singapore. Business Law
International, 21(1), 59-68.
Coleman v Myers [1977] 2 NZLR 225.
Ezion Holdings Ltd v Teras Cargo Transport Pte Ltd [2016] SGHC 175.
Gaba, V., & Dokko, G. (2016). Learning to let go: Social influence, learning, and the
abandonment of corporate venture capital practices. Strategic management
journal, 37(8), 1558-1577.
Goh, B. W., Lim, C. Y., Lobo, G. J., & Tong, Y. H. (2017). Conditional conservatism and debt
versus equity financing. Contemporary Accounting Research, 34(1), 216-251.
Harrison, R. T. (2017). The internationalisation of business angel investment activity: a review
and research agenda. Venture Capital, 19(1-2), 119-127.
Ho, H. (2016). A Comparative Study of Initial Public Offerings in Hong Kong, Singapore and
Malaysia. Nang Yan Business Journal, 4(1), 1-12.
Johnson v Gore Wood & Co [2000] UKHL 65.
Kashyap, A. K., & Parihar, K. (2019). Corporate Insolvency Laws in Singapore: Restructuring
and Reforms. In Corporate Insolvency Law and Bankruptcy Reforms in the Global
Economy (pp. 191-214). IGI Global.
Lin, L. (2019). Private Equity in Singapore.
Norman v Theodore Goddard [1991] BCLC 1028.

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Percival v Wright [1902] 2 Ch 401.
Re D'Jan of London Ltd [1994] 1 BCLC 561.
Wang, J. (2018). Innovation and government intervention: A comparison of Singapore and Hong
Kong. Research Policy, 47(2), 399-412.