a) Kelvin, Lily, Melody, Nathan and Otto decided to form a business enterprise which trades 3D...

 

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a) Kelvin, Lily, Melody, Nathan and Otto decided to form a business enterprise which trades 3D printers. They entered into an oral agreement under which Kelvin will contribute HKS5,000,000 cash on the understanding that at the end of four years he will be repaid at least HK$700,000. Lily will allow her motor van to be used for the delivery of the printers sold to customers. Nathan will contribute electronic products and printers manufactured by his father's factory as capital in the business enterprise and Nathan will provide after-sale services to repair sold printers to customers. Melody will use her financial skill and expertise in business management and administration. Otto will responsible for finding customers for the business. Explain whether Kelvin, Lily, Melody, Nathan and Otto formed a valid partnership. b) Elon, Yuki and Carson are the directors of Ally Hardware Co. Ltd. Elon is the managing director. Carson is husband of Yuki. Yuki has been asked by Elon to buy 500 printers for Ally Hardware Co. Ltd. Unknown to the other directors, Yuki runs her own company that sells printers and she gave the Ally Hardware Co. Ltd. expensive contract to it. Yuki did not mention this to the other directors of Ally Hardware Co. Ltd. and she earned secret personal profit HK$200,000. Carson is busy with his job as an airline pilot and has failed to attend any directors' meetings for the last two years. He told Elon and Yuki that he is happy to agree with whatever decisions they make with regard to the business. Three months ago, Carson forgot to renew the insurance over the company's premises. Last week, there was a fire which destroyed the company premises and the company suffered HK$300,000 property loss without insurance compensation cover. Carson received huge directors' fees (HK$100,000) cach month. Explain whether Yuki and Carson breached the director's duties. a) Kelvin, Lily, Melody, Nathan and Otto decided to form a business enterprise which trades 3D printers. They entered into an oral agreement under which Kelvin will contribute HKS5,000,000 cash on the understanding that at the end of four years he will be repaid at least HK$700,000. Lily will allow her motor van to be used for the delivery of the printers sold to customers. Nathan will contribute electronic products and printers manufactured by his father's factory as capital in the business enterprise and Nathan will provide after-sale services to repair sold printers to customers. Melody will use her financial skill and expertise in business management and administration. Otto will responsible for finding customers for the business. Explain whether Kelvin, Lily, Melody, Nathan and Otto formed a valid partnership. b) Elon, Yuki and Carson are the directors of Ally Hardware Co. Ltd. Elon is the managing director. Carson is husband of Yuki. Yuki has been asked by Elon to buy 500 printers for Ally Hardware Co. Ltd. Unknown to the other directors, Yuki runs her own company that sells printers and she gave the Ally Hardware Co. Ltd. expensive contract to it. Yuki did not mention this to the other directors of Ally Hardware Co. Ltd. and she earned secret personal profit HK$200,000. Carson is busy with his job as an airline pilot and has failed to attend any directors' meetings for the last two years. He told Elon and Yuki that he is happy to agree with whatever decisions they make with regard to the business. Three months ago, Carson forgot to renew the insurance over the company's premises. Last week, there was a fire which destroyed the company premises and the company suffered HK$300,000 property loss without insurance compensation cover. Carson received huge directors' fees (HK$100,000) cach month. Explain whether Yuki and Carson breached the director's duties.

Answer rating: 100% (QA)

a Yes they have formed a valid partnership A partnership settlement may be oral or in writing It isn... View the full answer