Question $1$

Pets Pty Ltd $($Pets$)$ operates a business selling pet products $($dog and cat food, kitty litter, leashes,

etc$)$ all around Australia.

Pets is owned by Merve, Silvia, Roger and Oliver. Merve and Silvia together own $75\%$ of the shares

and are Managing Director and Company Secretary respectively. Roger and Oliver own $25\%$ of the

remaining shares between them.

Although they are minority shareholders, Roger and Oliver like to be informed about everything that

is happening in the business. As they have indicated that they might like to invest more money in

Pets, Merve and Silvia have indulged them by discussing company matters that are not within their

power as shareholders.

However, this practice has become very time consuming, especially because Merve and Silvia and

Roger and Oliver disagree about many things. For example, Merve and Silvia are convinced that Pets

needs to capitalise on the new interest in pet ownership by purchasing a dog kennel that breeds pug

dogs. Roger and Oliver are opposed to buying that business on grounds that it is a puppy farm. There

is an acrimonious discussion about the topic, one of many.

Merve and Silvia have recently met Brandy, who runs a small private equity business. She sees

potential in Pets and has offered to refinance Pets. Specifically, she has offered to provide enough

money to Pets to buy out Roger and Oliver$$s share of the capital and purchase the dog kennel.

However, Roger and Oliver don$$t want to sell their shares.

Merve and Silvia wonder whether they can pass a resolution to change the constitution to force

Roger and Oliver to sell their shares to them $($Merve and Silvia$).$ They tell you that there is a

$$desperate need to harmonise relationships between the shareholders and management$$ and that

they would be willing to Roger and Oliver $75\%$ of the estimated market price, as calculated by the

company accountant. Considering the equitable limit on minority voting power, is the constitutional

amendment within Merve and Silvia$$s power? Explain your answer.