INSTRUCTIONS: Read the following carefully and provide your advice using decided
cases and the correct legal format.
Anthony, Betty and
Carlton are the Directors of Modern Jamaica Tech Ltd, a company whose main
objects are to engage in the business of computer software development and ‘any
other business which, in the opinion of the Directors is in the interests of
the company’.
In November 2012
the company was approached by Frankie, a computer games software designer, who
wished to sell one-half of his interest in certain products which he has
designed but not yet launched on the market. At a meeting attended by all three
Directors and Frankie the possibility of such a joint venture was discussed but
rejected by the company on the grounds that, given the volatile nature of
consumer demand and the fast changing nature of the computer games market, the
venture was too risky. In January 2013 Frankie approached Anthony, Betty and
Carlton with a view to obtaining their personal involvement in the venture.
Anthony declined but Betty and Carlton accepted Frankie’s invitation. They
incorporated a new company, Betcar Technologies Ltd., with Betty and Carlton
each holding on-half of the issued share capital in the company; they were also
its two Directors. This arrangement was not disclosed to Modern Jamaica Tec
Ltd.
In April 2013
Modern Jamaica Tech Ltd was taken over by Prosperous Computer Ltd. And Anthony,
Betty and Carlton were replaced by nominees of Prosperous Computers Ltd. The
new Board of Directors has now learned of the Betcar Technologies Ltd project
and that the initial investment made by Betty and Carlton has tripled to 25
million Dollars.
Advise Modern
Jamaica Tech Ltd
Mark
Scheme:
Proper
identification of the legal issues involved 5
marks
Reasoned
argument of the relevant laws 30
marks
Application
of law to issue 10
marks
Conclusion
5 marks
Total 50 marks