Disqualification is automatic and Moon will be guilty of an offence ifhe disobeys it.However, the disqualification may be lifted if the leave of court orwritten permission of the official assignee is obtained (section 148(2))NOTE: must state if disqualification is automatic or not(b) Rain was also the director of Water Works Pte Ltd which was madeinsolvent sometime back. Whether Rain can continue being the director depends on thecircumstances in which he was disqualified from being one of WaterWorks Pte Ltd. It depends on whether the company became insolvent while he wasthe director or within three years of him ceasing to be one. It alsodepends on whether his conduct was such to make him unfit to be adirector.If so, Rain may be disqualified as a director under Section 149(1) ofthe Companies Act. However, disqualification under section 149 is notautomatic → can continue as director until someone applies to courtfor disqualification order(c)Snow is also a director of Flakes Pte Ltd and has been convicted of anoffence under section 157(1) in relation to that company. Under Section 154(2), where Snow is convicted of any offence underSection 157, he may be disqualified as a director for up to 5 years.
However, if his offence involves fraud or dishonesty punishable onconviction with imprisonment of 3 months or more, he isautomatically disqualified for 5 years.If Snow continues to be a director despite the Section 154disqualification being imposed, he would be guilty of an offenceunless he has the leave of court.(d)AssumingMoon, Rain and Snow are disqualified from acting asdirectors on the grounds stated in (a), (b) and (c) respectively, canthey continue to run another business organisation which is not acompany (i.e a sole trader, partnership, LP or LLP)?For Moon, No. Undischarged bankrupt would not be able to runanother business organisation unless the disqualification islifted by an appealFor (b), Yes, unless LLP where Rain cannot be the partner butcan be the manager
#3Trust, Ernest and Honest are directors of No Problems Ltd, a publiclisted company. Advice No Problems Ltd and the directors in the followingcircumstances:(a) No Problems Ltd enters into a contract for the purchase of 1000 tonsof iron from another company. Trust is the majority shareholder inthat other company. In accordance with Section 156(1) of the Companies Act, when NoProblems Ltd enters a transaction and Trust has a direct or indirectinterest in that transaction, Trust must disclose to the board ofdirectors of No Problems Ltd that he has a material interest in thecontract since he is a majority shareholder in the company.