Tutorial 3 answers.doc - Tutorial 3 1 Happening Place is a private company Tuf Tan holds 45 of the shares in Happening Place Pte Ltd Advise Tuf Tan and

Tutorial 3 answers.doc - Tutorial 3 1 Happening Place is a...

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Tutorial 3 1.Happening Place is a private company. Tuf Tan holds 45% of the shares in Happening Place Pte Ltd.Advise Tuf Tan and the directors as to the following:(a) The directors appoint Payne Soh as the company’s public relations officer (ie an employee). Payne Sohhas a personal conflict with Tuf Tan on one occasion. As a result, at a requisitioned meeting of the membersTuf Tan manages to get a resolution directing the directors to fire Payne Soh. The directors refuse to obey. While Tuf Tan managed to get the resolution passed, by virtue of section 157A of the Companies Act,directors have the power to manage the company and members generally cannot take on managementdecisions, such as hiring and firing of employees. Even if Tuf Tan went to court for a declaration that thedirectors observe the resolution, the court may not allow it, since the directors were conferred power todetermine such management issues. Having said that, if Tuf Tan insist of hiring Payne Soh, he can remove the current directors by ordinaryresolution. This should be relatively easy since he has a large portion of shares in Happening Place Pte Ltd.Thereafter, appoint new directors who are agreeable to firing Payne Soh. (b) Tuf Tan is also unhappy that one director’s mistress Lolli, has been appointed production manager (ie anemployee) of the company’s factory. This instance is a breach of fiduciary duties to the company, whereby there is a conflict between thedirector’s personal interest and duties to the company. As such, it is possible to go to court to get themistress Lolli fired. Under section 157 of the Companies Act, a director must act honestly and use reasonable diligence in thedischarge of his duties. Therefore, he should not place himself in a position of conflict of interest. In thiscase, there is a clear conflict of personal interest and interest for the company. As such, it is possible to goto court to get the mistress Lolli fired.
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  • Spring '18
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  • Corporation, Public company

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