SoulFood Pte Ltd (“SF”) was a company that specialised in creating juice cleanse kits. It claimed to be the first juice cleanse company in Singapore with an AVA approved and licensed juice kitchen. SF was a joint venture between Daisy, Rose, Pansy and Violet, 4 good friends who believed in eating well. Daisy and Rose were also directors of SF. The 4 friends had wanted to make premium raw, organic, cold pressed juices accessible to everyone and therefore started SF. SF’s constitution had an objects clause which stated that the company’s object was the creation of quality juices and cleanse programmes that were nutritionally designed and certified. There were no other objects. The business was doing well but in the past year, sales started to slide. The directors of SF decided to boost the business by going into the food and beverage business. They were in the process of completing the purchase of a bistro in Orchard Road at a price of
$200,000 and were contemplating purchasing another two cafés, one in Chinatown, and another in Katong. Pansy was completely against the idea of expanding into the food and beverage business because it was outside the scope of the company’s objects clause.

(a) Advise Pansy if the contract to purchase the bistro could be challenged on the grounds that it was outside the company’s objects clause. In your answer, explain to Pansy, using cases and statutory provisions, the remedies she may have to prevent the contemplated purchase of the three food outlets.

(b) Explain, with reference to the relevant section(s), how a company’s objects clause could be amended.

Answer rating: 100% (QA)

a If Pansy were to challenge the contract to purchase the bistro on the grounds that it was outside ... View the full answer