Disqualification is automatic and Moon will be guilty of an offence if he

Disqualification is automatic and moon will be guilty

This preview shows page 3 - 6 out of 6 pages.

Disqualification is automatic and Moon will be guilty of an offence if he disobeys it. However, the disqualification may be lifted if the leave of court or written 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 made insolvent sometime back. Whether Rain can continue being the director depends on the circumstances in which he was disqualified from being one of Water Works Pte Ltd. It depends on whether the company became insolvent while he was the director or within three years of him ceasing to be one. It also depends on whether his conduct was such to make him unfit to be a director. If so, Rain may be disqualified as a director under Section 149(1) of the Companies Act. However, disqualification under section 149 is not automatic → can continue as director until someone applies to court for disqualification order (c) Snow is also a director of Flakes Pte Ltd and has been convicted of an offence under section 157(1) in relation to that company. Under Section 154(2), where Snow is convicted of any offence under Section 157, he may be disqualified as a director for up to 5 years.
Image of page 3
However, if his offence involves fraud or dishonesty punishable on conviction with imprisonment of 3 months or more, he is automatically disqualified for 5 years. If Snow continues to be a director despite the Section 154 disqualification being imposed, he would be guilty of an offence unless he has the leave of court. (d) Assuming Moon, Rain and Snow are disqualified from acting as directors on the grounds stated in (a), (b) and (c) respectively, can they continue to run another business organisation which is not a company (i.e a sole trader, partnership, LP or LLP)? For Moon, No. Undischarged bankrupt would not be able to run another business organisation unless the disqualification is lifted by an appeal For (b), Yes, unless LLP where Rain cannot be the partner but can be the manager
Image of page 4
#3 Trust, Ernest and Honest are directors of No Problems Ltd, a public listed company. Advice No Problems Ltd and the directors in the following circumstances: (a) No Problems Ltd enters into a contract for the purchase of 1000 tons of iron from another company. Trust is the majority shareholder in that other company. In accordance with Section 156(1) of the Companies Act, when No Problems Ltd enters a transaction and Trust has a direct or indirect interest in that transaction, Trust must disclose to the board of directors of No Problems Ltd that he has a material interest in the contract since he is a majority shareholder in the company.
Image of page 5
Image of page 6

You've reached the end of your free preview.

Want to read all 6 pages?

  • Spring '18
  • -
  • Tuf Tan

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture