Advise Oscar and Stephen in regard to their question about how they could facilitate Stephen replacing Harvey
Question:
Oscar, Stephen and Harvey are equal shareholders of a company, Fun Facts Films Pty Ltd. The company produces documentary films and is operating without a constitution. The directors of the company are Harvey and Stephen. Harvey is keen on branching out into other genres and would like to investigate the possibility of producing low budget movies with interesting story lines. Harvey manages to obtain funding to produce a low budget thriller, 'Lockdown', and presents the idea to Oscar and Stephen. Oscar and Stephen do not share Harvey's enthusiasm for the idea and suggest that they should retain their current focus on producing documentaries. Harvey decides to do produce the film on his own through another company that he forms for this purpose - Mogul Movies Pty Ltd. 'Lockdown' is a roaring success, and Mogul Movies Pty Ltd succeeds in making a huge profit from the movie - especially as it was able to keep the costs quite low by using Fun Facts Films Pty Ltd.'s employees and equipment during the filming and production process: Oscar and Stephen are furious when they hear that Harvey used Fun Facts Films Pty Ltd.'s employees and equipment to make the movie. They feel that Fun Facts Films Pty Ltd is entitled to a share in the profit generated by 'Lockdown' and would like to sue Harvey to obtain compensation and a share in the profits for Fun Facts Films Pty Ltd but are not sure whether this is possible. In addition, Oscar and Stephen would like for Stephen to replace Harvey on the board of directors, but are not sure how to go about to achieve that. They decide to approach you for advice. Advise Oscar and Stephen in regard to their question about whether and how they could facilitate Stephen replacing Harvey on Fun Facts Films Pty Ltd.'s board of directors.
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts