Equity Investments Co Ltds constitution provides that Equity Investments Co Ltd will own and operate an equity
Question:
Equity Investments Co Ltd’s constitution provides that Equity Investments Co Ltd will own and operate an equity securities investment business. It also provides Equity Investments Co Ltd will not own or operate any other kind of business. Equity Investments Co Ltd enters into a contract with Wilson Construction Co Ltd to purchase a 10-story central city commercial property for investment purposes. Subsequently, the Income Tax Act 2007 is amended with adverse consequences for lessees, and market rentals for central commercial property drop significantly. Equity Investments Co Ltd then refuses to proceed with the contract. Mark Wilson is a director of both Equity Investments Co Ltd and Wilson Construction Co Ltd.
Required:
Referring to relevant sections of the Companies Act 1993, advise Wilson Construction Co Ltd whether it can enforce its contract with Equity Investments Co Ltd.
Concepts in Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher