Between 2015 and 2019, Suzie and Tara ran a successful business in partnership. In 2019, they decided to incorporate the business, and to take this opportunity to bring a mutual friend Uma who had previously been working informally with them. Joyful Limited was incorporated with an issued share capital of 1,000 shares (HK$10 per share), Suzie and Tara each taking 450 shares, and Uma taking 100 shares. All three became directors of Joyful Limited on incorporation.

About a year after incorporation, Suzie and Tara voted to remove Uma from her directorship, and thereafter have not allowed Uma to be involved in management. They claim that she is difficult to get on with and does not work as hard as they do. The company has never paid any dividends. Suzie and Tara claim that the company is not profitable enough to pay dividends but Uma says profits are being kept to a minimum because Suzie and Tara are paying themselves substantial remuneration and perks.

(a) Advise Uma who is unhappy with the current position.
(b) Would your answer to part (a) differ if Suzie and Tara had offered to buy Uma’s shares, with the value to be determined by the company’s auditor?

Answer rating: 100% (QA)

Answer As per the requirement of the above question the answer is below A Advise Uma who is unhappy ... View the full answer