Question 4.There are four directors of PizzaPie Ltd (the “Company). The company is inthe catering business and primarily provide pizza catering services to largecompanies for corporate events.All directors are equal shareholders within the company. Pat is one of thesedirectors having a 25% shareholding. Recently the other three directors havesought to freeze Pat out from the business. On one occasion the threedirectors became aware of a business opportunity for the company. Theydecided to take advantage of this contract but did not want Pat to benefit fromit. So, they passed a resolution at a company meeting declaring that thecompany has no interest in the contract and confirming that the three directorscould enter into it on their own behalf.Pat is outraged at this and believes the directors have defrauded thecompany. He has threatened to take legal action on behalf of the company.The other directors have informed him that there is nothing much he can do,and he is not in a position to take a case.Advise Pat whether the directors are correct and what form of redress areopen to him.
Programme Code: TU918/TU904/DT592 Module Code: LAW2502 CRN:24262 TECHNOLOGICAL UNIVERSITY DUBLIN AUNGIER ST CAMPUS _____________ TU918, TU904, DT592: LLB Bachelor of Law, Bachelor of Business and Law Year 2 ______________ SUPPLEMENTAL EXAMINATIONS 2020/21 ______________ Module Title: Company Law Internal Examiner: Dr Deirdre McGowan Ms. Clare Maguire, LLM The Exam must be completed and uploaded to the appropriate Brightspace module before 5pm on Friday 27th August 2021. Upload one pdf document only. You may upload at any time until the deadline but only the last uploaded document will be marked. Answers must not exceed 1,500 words per question. If you write more than 1,500 words per question, only the first 1,500 words will be marked. Answer 3 questions only. You must answer at least one question from both Section A and B. If you answer more than 3 questions, only the first three will be marked. In submitting this assessment, students confirm that they have read and agreed to the conditions set out in the TU Dublin Student Declaration of Integrity. SECTION A Question 1. Section 2 of the Companies Act 2014 defines a director as “any person occupying the position of a director by whatever name called”. What are the implications of this broad definition for those involved in the management of companies? Question 2. Capital maintenance is an essential concept within company law, the purpose of which is to protect creditors. Discuss this statement referring to all relevant case law and statute law. Question 3. Critically discuss the examinership process as instituted under Part 10 of the Companies Act 2014. In your answer discuss what must be proven for the appointment of an examiner by the court and outline the main role of the examiner. You must refer to relevant statue and case law in your answer. SECTION B Question 4. There are four directors of PizzaPie Ltd (the “Company). The company is in the catering business and primarily provide pizza catering services to large companies for corporate events. All directors are equal shareholders within the company. Pat is one of these directors having a 25% shareholding. Recently the other three directors have sought to freeze Pat out from the business. On one occasion the three directors became aware of a business opportunity for the company. They decided to take advantage of this contract but did not want Pat to benefit from it. So, they passed a resolution at a company meeting declaring that the company has no interest in the contract and confirming that the three directors could enter into it on their own behalf. Pat is outraged at this and believes the directors have defrauded the company. He has threatened to take legal action on behalf of the company. The other directors have informed him that there is nothing much he can do, and he is not in a position to take a case. Advise Pat whether the directors are correct and what form of redress are open to him. Question 5. Mick and Joe are the Directors of All Men Beauty Limited (the “company”). The company has 25 shareholders, including Mick and Joe and members of their extended families as well as some investors. The company manufactures and distributes beauty and skincare products for men. The company’s assets are valued at €1 million. (A) In 2019 the Company needed to expand its warehouse facilities due to a surge in demand for its products. Mick owns a large lock up unit valued at €220,000 and discusses with Joe the possibility of selling the unit to the company. Joe is aware that there might be some issue with this transaction. Advise Mick and Joe how they might ensure that the transaction complies with the Companies Act 2014. (B) Joe wants to buy a holiday home for himself and his family in Co Wexford. He is arranging a mortgage through his bank but needs to move fast to secure the property he wants. The company has a lot of cash on hand and Joe discusses with Mick the possibility of the company loaning him the €200,000 he needs to complete the purchase. Advise Mick and Joe how they might ensure that the transaction complies with the Companies Act 2014 (C) Mick has been offered some consultancy work with a multi-national cosmetics brand. He can do the work in his spare time and he will earn about €20,000 over a period of three months. He discusses this with Joe who thinks it is a good idea because it will raise the profile of their own company as well as benefitting the multi-national. Advise Mick and Joe whether this work can be undertaken and any steps they need to take to ensure compliance with the Companies Act 2014. Question 6. Jake is a director and one third shareholder of PeaceOut ltd (the “Company”) which designs and sells beach clothes. The other 2 directors, Tom and John are also shareholders within the company. All 3 shareholders are childhood friends and incorporated in 2014 to pursue their lifelong goal of running a clothing business. The Company has become hugely successful since its incorporation and is managed equally by all 3 of the friends. In recent months, the relationship between Jake and the other 2 directors has soured and Jake’s position as a director has been undermined. The other directors have engaged in several business activities without Jake’s knowledge. They have also been known to take large drawings from the company for personal use despite Jake’s objections. Furthermore, they caused the Company to pay off a debt of €20,000 due by company to Richard, who is Tom’s father. They did not pay any of the other creditors of the Company. At a recent extraordinary general meeting they voted to remove Jake as a director of PeaceOut Ltd. Jake is outraged at these events and wants to petition the court to have the company put into liquidation. Advise Jake whether, and if so on what grounds the company can be liquidated and examine the validity of the payment to Richard.