Tomas and Alberto are trustee of a trust. The trust property includes shares in a private...

 

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Tomas and Alberto are trustee of a trust. The trust property includes shares in a private company that were transferred to the trustees on the creation of the trust. The settlor had been involved in starting up the private company and did not want the shares sold. The shares in the private company held in a trust by Tomas and Alberto accounted for 30% of the issued voting shares of the company. Because Tomas and Alberto held shares in their capacity as trustee, they received notice of a shareholder's meetings. When they attend the shareholders meeting, they became aware that the company had significant potential but, due to internal conflict between the other shareholders, the company's potential could not be fully achieved. Tomas and Alberto have convinced one of the other shareholders who holds 25% of the voting shares of the company to sell his shares. If Tomas and Alberto can acquire those shares, they will have sufficient control over the company to make changes they believe will produce significant gains for the company. The trust fund includes substantial property other than the shares in the private company and there are more than adequate funds to acquire the additional private company shares as part of the trust property. Tomas and 2 Alberto want to buy the shares for themselves so they can personally profit from the potential gains they believe they can make by exercising control over the company. Required: With reference to Companies Act of Fiji 2015, critically evaluate the plan of Tomas and Alberto. Tomas and Alberto are trustee of a trust. The trust property includes shares in a private company that were transferred to the trustees on the creation of the trust. The settlor had been involved in starting up the private company and did not want the shares sold. The shares in the private company held in a trust by Tomas and Alberto accounted for 30% of the issued voting shares of the company. Because Tomas and Alberto held shares in their capacity as trustee, they received notice of a shareholder's meetings. When they attend the shareholders meeting, they became aware that the company had significant potential but, due to internal conflict between the other shareholders, the company's potential could not be fully achieved. Tomas and Alberto have convinced one of the other shareholders who holds 25% of the voting shares of the company to sell his shares. If Tomas and Alberto can acquire those shares, they will have sufficient control over the company to make changes they believe will produce significant gains for the company. The trust fund includes substantial property other than the shares in the private company and there are more than adequate funds to acquire the additional private company shares as part of the trust property. Tomas and 2 Alberto want to buy the shares for themselves so they can personally profit from the potential gains they believe they can make by exercising control over the company. Required: With reference to Companies Act of Fiji 2015, critically evaluate the plan of Tomas and Alberto.

Answer rating: 100% (QA)

The plans of Tomas and Alberto with reference to the Companies Act of Fiji 2015 Under ... View the full answer