Halima and Julian run a successful partnership. In 2018, they incorporate their business (Bin Dawud & Sulaiman Sdn Bhd) and 500 shares are issued. Halima and Julian each take 100 shares, 200 shares are taken by Zahra, and the remaining 100 shares are taken by Diane.

The company’s accounts are audited by Daniel. It is apparent that Daniel has been negligently auditing the company’s accounts and Halima, Julian, Zahra, and Diane all believe that Daniel should be removed before his period of office has expired. Halima is aware of the consensus and so writes a letter to Daniel informing him that his office is terminated and he is no longer the company’s auditor. Zahra and Diane rarely attend meetings and Halima shows little interest in attending board and general meetings. Julian, therefore, tends to run the business by herself, and the other members appoint her to act as their proxy. She uses this power to alter the articles and to change the company’s name to Bin Dawud Sdn Bhd.
Given that Halima never attends board meetings, Zahra and Diane are of the opinion that she should step down as a director but Halima refuses. Zahra and Diane request that the directors call a general meeting to decide the issue, but Halima and Julian refuse. Accordingly, Zahra and Diane convene a meeting themselves (at their own expense) and invite Halima and Julian to attend. The meeting takes place and, as Zahra and Diane collectively hold 300 shares compared to the directors’ 200 shares, they contend that the resolution is passed and Halima should vacate office. Halima points
to a provision in the company’s articles, which states that a director can only be removed if a special resolution is passed. Zahra and Diane state that Wilkins Sdn Bhd should reimburse them for the costs of the meeting.

Required
Discuss whether any breaches of the law have occurred and whether the decisions taken have followed the applicable procedures.

Answer rating: 100% (QA)

In a perfect world business contracts would be entered into both sides would benefit and be pleased with the outcome and no disputes would arise But i... View the full answer