Download Majority Shareholders - Company Law for Business Students - Exam and more Exams Corporate Law in PDF only on Docsity! PRIFYSGOL ABERYSTWYTH UNIVERSITY DEGREE EXAMINATIONS 2012 DEPARTMENT OF LAW AND CRIMINOLOGY COMPANY LAW FOR BUSINESS STUDENTS (LA37810) Time allowed ONE AND A HALF hours Answer TWO questions – all questions carry equal marks. Candidates are not permitted to bring any books, notes or any other materials into the examination. 1. Answer BOTH (a) AND (b) (a) Define and briefly explain the following: (i) corporate personality, (ii) limited liability, (iii) lifting the veil of incorporation and (iv) floating charge. (b) Make a list of director‟s duties as required under Companies Act, 2006 and illustrate the same using case law and examples. 2. John, his sister, Aly and their friend, Rumo run Wheels Ltd, a company selling car tyres and spare parts. John owns 60% of the shares of Wheels Ltd., Aly own 30% and Rumo owns 10% of the shares. When Rumo‟s wife, Clara, purchase 40% of the shares of a rival company, Tyres Ltd., John and Aly alter the Articles of Association giving the majority shareholders the power to “buy out any shareholder in order to protect the interests of the company.” Having changed the Articles, they then require Rumo to sell his shares to them. Discuss, with reference to relevant case law and Companies Act 2006, whether the altered Articles of Association is valid and will allow John and Aly to buy out the minority shareholder, Rumo‟s shares in the company? 3. „Auditors are meant to be the financial watchdog of the company directors. The problem is that they are asked to bite the hand that feeds them.‟ Discuss the ways the law seeks to ensure the independence of auditors. Does the auditor owe a duty of care to the shareholders? Illustrate your answer using relevant case law. 4. Helen, Jenny and Ewan would like to start a business together providing interior decoration services in Aberystwyth. Helen is willing to invest her savings of 7500 pounds. Jenny has recently inherited 20,000 pounds which she is willing to invest into this business. Ewan does not have any money but he has a university degree in interior decorations. Helen and Jenny believe that Ewan‟s knowledge will be an important contribution towards the business. Jenny would like to consult a lawyer and seek his advice on business structures and the kind of business vehicle that will be most suited to their enterprise. The friends approach you for advice. Advise them of their options in terms of available business vehicles which will be suitable for their business. _______________________
