Company Law - Rangers Ltd - Essay Example

? Company Law Section A One of the chief law issues is a conflict of interest. There is also bleach of company law as itis illegal for a company director or any shareholder to be in partnership with a competitor. This is because the party may involve itself in bringing down the other company. Teaming up with a rival company is also an action highly discouraged by law. This means that Muna has no legal power to defend the legal actions against him. He is not acting for the success of the company, which is the key objective of all directors (Banks & Banks, 2009). Rangers Ltd can proceed with the proposed alteration if Muna continues to express interest with the rival company. However, Kumar illegally helped his cousin acquire shares in the company posing a threat to the legal procedure; this is also another legal issue, which is actionable in a court of law, but it is unfortunate that mark is not aware of the issue. This is because nepotism is illegal according to the law and parties should not favour their relatives over other partners. Kumar abused his position as the managing director to promote his relatives. By telling his cousin to support his decisions, he corrupts the process of decision making for the company. This means that all decisions were in his favour but not for the well-being of the company and other shareholders. It is evident that proceedings Rangers Ltd in the have been for the interest of the Kumar as there are only three directors in the company. This is a serious offence and Kumar should as well be terminated from the company. It is evident that the two want to attain full ownership of the company under majority shares. The third shareholder is a determinant where the party he supports attain the majority opinion, which is considered in ruling out their case by voting. The majority rule favours Kumar who has the support of Mark, such a situation reduces the chances of Muna succeeding in his accusations. They should follow the procedure outlined in the business ethics. It illustrates that liaising with another company with an aim of combining shares is against the law. The initial Article of Association is significant in showing the duties and responsibilities of individual. All directors are subject to the article and thus Muna should be answerable in a court of law action as far as is actions are concerned. This adds to why the company is justified to take legal charges against Muna (Geltzer & Trainor, 2010). According to the previous case laws, the company should be the complainant and not individual shareholders. Therefore, the three should all support each other in filling the case against certain decisions. This points out that the proposed alterations cannot be made until the final ruling is done. The statute in the Company’s Directors Disqualification Act of 1986 states that if the director goes against the rules of the company then disqualification is a disciplinary measure. Under the companies Act of 2006, any member is prevented by law from selling any shares from the company without an agreement from other members and shareholders. In addition, the agreement for sale or shifts of shares must be by all the members. The proper claimant principle helps in ruling a case where the company is the sole complainant. However, in this scenario, there is a tag of two members against one thus the common law that protect the minorities is enforced based on the argument presented. Some of the members’ rights have been infringed, and thus the exceptions are applicable for this case (Aiman, 2008). All occurrences must be considered to achieve a fair ruling on all parties. For the two shareholders to add clauses to the current article all members must be present to avoid fraud. This ensures that they are both heard and a base for their argument established. Muna is not justified in assuming more control for the company since he is a director and Kumar is above him as the managing director; his actions are against all ethics of company law thus should face a court of law. The company’s profits should be shared as per their agreement, and one member should not seek to get larger shares than the others did in the company. It is against the law for a member to make personal decisions as Muna does in showing interest in rival company. This is a form of betrayal; it will ruin the company’s activities. An act to solve the matter is vital to prevent loss of the company’s profit, which should be used for the company’s expansion. Section B Memorandum of the association is a key article in creating a basis of running a company. This is following the fact that it dictates ways in which members relate with the company and members of the society. The content can be changed for the interest of the company; this is legal provision in reference to company law. The document can be used to raise charges against members, who fail to work in line with its content, as it is a mandatory for them to abide with it to the letter. The current narrative addresses to issues concerning members ganging up with competitors. The narrative is specific in nature and thus does not give room for unfair practices practiced by such as Muna. The specificity is also relates only to actions concerning the involvement with competitors. The narrative in the Memorandum of Association can by its nature be a fair means of terminating Muna from the company. However, altering the article could create a situation where members can expel other members by voting. The directors are three in number thus having a majority vote is possible; Mark is not happy with actions of Muna thus he will vote for a change in the memorandum of association. If any member is thought to act to his own benefit, the rest can hold a meeting and vote for or against taking legal actions against him or expelling him at their disposal. This means changing it would ease the procedures of terminating selfish members. The means there will be a substantial difference between because of changing the narrative in question. The change will also bring about instances where members are eliminated because of other reason, as the change does not specify the reason for dissolving the company. References Aiman Nariman Mohd. Sulaiman. (2008). Commercial applications of company law in Malaysia. [Singapore], CCH Asia. Banks, T. L., & Banks, F. Z. (2009). Corporate legal compliance handbook. New York, Aspen Law & Business. Geltzer, R. L., & Trainor, H. C. (2010). Guidelines for a corporate law department manual. Chicago, The Association]. Read More