Case study

Mr. Flaky worked with Healthy Nyammings & Things Limited a large restaurant as the Head Chef for over twenty years. At a recent meeting, a major disagreement developed between Mr. Flaky and the Managing Director of the company, Mr. Josephs, which resulted in Mr. Flaky resigning from the company. During the heated argument Mr. Flaky informed Mr. Josephs that he intended to incorporate a business with the name Healthy Namminz & Thingz Limited in a Plaza nearby, so the job does not mean much to him anyway.Mr. Josephs is furious and is contemplating seeking legal advice on the matter

Prior to the incorporation of Healthy Nyammings & Things Limited Mr. Josephs had entered into a contract with Vegetables & Supplies Ltd for the supply of 500 pounds of carrots signing the contract in his own name. The carrots were supplied to the company upon incorporation, and Vegetables & Supplies Ltd is insisting that they have a legally binding agreement with Healthy Nyammings & Things Ltd.

In January 2020 the company made a profit and the board of directors decided to plough back the profit into the business, since the company is in the process of embarking on a lucrative project. Mr. Smart an ordinary shareholder in the business, is insisting that dividends be paid to the shareholders, and if not he is going to take legal action to compel the company to pay.He has also stated that as an ordinary shareholders

In an effort to raise additional funds for the upcoming project, Mr. Joseph is thinking of creating a fixed legal charge over all Healthy Nyammings & Things Ltd. fixed assets in favour of Bank Ltd.The company had created a previous charge in favour of Cash Ltd where they were given the right to use the assets until the order was withdrawn.The company is contemplating that in the case of liquidation which charge would take priority in payment