Jerry owns a motorcycle repair business. After 5 years, he decided to expand his business to include
Question:
Jerry owns a motorcycle repair business. After 5 years, he decided to expand his business to include selling motorcycles and bicycles. He incorporated a company called J&J Motors Sdn Bohdan transferred all the assets of his business to the company.Jerry holds 95% of the shares of the company and his friend, Jenny holds the balance 5%. Consider the following separate and independent situations:
1. To protect the company from any loss against theft, Jerry purchased an insurance policy under his own name to insure all the assets of the company including the motorcycles and bicycles from A Assurance Bhd. 7 months later, the company premise was burgled andsome RM500,000 worth of motorcycles and bicycles were stolen.Advise A Assurance Bhd. whether it can avoid the claim made byJerry on his insurance policy to recover the loss against theassets of the company, from the perspective of company law. (10marks)
2. Jerry and Jenny made a restraint of trade agreement toprohibit either one of them from approaching customers of J&JMotors Sdn. Bhd., after leaving the company. 2 months later, Jennyleft J&J Motors Sdn. Bhd. and sold all her shares to Jerry. Shebegan to set up a similar business by incorporating another company, Jenny Motors Sdn. Bhd. and she started to approach J&JMotors’ customers using her new company. Jerry was furious to knowabout this and he threatened to take legal action against Jenny for breaching their restraint of trade agreement. Jenny claim that shehad not breached her agreement with Jerry on the ground that shedid not personally approach the customers. Advise Jerry whether hecan seek the court to lift veil of incorporation of Jenny MotorsSdn. Bhd. so that he can enforce the agreement?
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett