Mizan, Ayubbi and Salahuddin are the directors and shareholders of Aims Tune Auto Berhad, a company dealing with repairing and selling used cars. In 2018 Mizan and Ayubbi created a loan in favour of the company for the sum of RM750,000 from Mari Pinjam Bank. The loan was for the purpose of raising up the capital in the company.

In December 2019, the directors bought on credit RM1 million worth of imported second hand cars from Sportcars Bhd, although the company was not in the position to repay the debt. This is due to the financial crisis faced by the company and the company has not been profitable since early 2019. The company also failed to remit its contribution to the Employee Provident Fund for their employees.

In January 2020, the court granted an eviction order against Aims Tune Auto Berhad. This means that they were required to vacant the premises in one-month time. However, Mizan and Salahuddin locked up the premises and they fled to Australia. The owner of the premises now intended to sue the directors. Subsequently, the company went into liquidation and the liquidator’s wish to sue the directors for all the debt created.

Based on the above situations, advise all the parties on their liabilities in the above transactions.

Answer rating: 100% (QA)

Limited liability The basis of limited liability is that all debts incurred by a company are the companys liabilities and are not directly the legal l... View the full answer