Singapore Company Law QUESTION ONE Andy recently had a serious discussion with B
ID: 342892 • Letter: S
Question
Singapore Company Law
QUESTION ONE
Andy recently had a serious discussion with Barney and Cathy (both Directors) regarding buying a 30% share of their company, Fly High Pte Ltd. Andy was hesitant to invest so much money into their company. To entice Andy to commit to buying the shares, Barney and Cathy promised to give Andy a job for an extended period of time. They promised to appoint him as the Senior Manager of Business Operations since Andy had previous experience with large multi-national corporations.
Before Andy invested in the company Barney and Cathy got shareholder approval to amend the constitution to show that Andy would from the time that the contract had been signed be the Senior Manager of Business Operations for a period of 10 years.
Based on this, Andy bought 30% of the shares in the company.
After six months, Barney and Cathy noticed that Andy rarely showed up to work and showed very little concern about the company’s affairs as he was often flying around Asia and having a good time. Barney and Cathy called for a general meeting but did not notify Andy as they were certain he would not make an appearance.
Andy also ordered furniture for his office costing $75,000.
At the general meeting, the shareholders voted to change the constitution and remove Andy from his position.
When Andy returned, he became very upset and wishes to take action against the 2 directors and the company.
Required:
Please advise Andy regarding any legal issues arising from the facts above, citing relevant case law and legislation.
Advise the company whether it is bound to pay for the furniture ordered by Andy
Explanation / Answer
Andy bought 30% share of the company, Fly High Pte Ltd and he was enticed by a position of senior manager of business operations. It is important for the company to provide Andy with strict warnings if he is not shoeing up at work and fulfilling his responsibilities.
Andy can file a case stating that the contract had been signed be the Senior Manager of Business Operations for a period of 10 years. Plus he also owns 30 percent of the shares in the company. The decision for removing Andy was taken without informing him and giving him any idea about it. They assumed he would not turn up for the meeting.
There is no doubt that Andy has not fulfilled his responsibilities effectively but it is also true that the company did not give any warnings or instructions to Andy. It is important to follow a legal and formal Process before removing anyone. It cannot be done abruptly. The company did not follow the legal procedures for removing Andy. Also he has 30 percent of shares in the company which gives him. Rights of shareholdersh The company is not bound to pay for any furniture for Andy. Only the furniture which is required needs to be paid by the company. Anything which is not related to the company directly should not be paid. It is also important for Andy to take permission from the company before ordering for anything that the company needs to pay.