Problem:
Kelvin-Decline Ltd manufactures and wholesales fashion clothes. The company has 3 directors, including Kelvin, the managing director. The company does not have a constitution. The directors are negotiating to sell the company's factory and to shift manufacturing to China. All the members attend an annual general meeting of the company and the directors advise the meeting about their plans for the future. The members disagree with the factory closure and a resolution is passed by 80% of the votes that the company is not to sell its manufacturing facility. The directors tell the members that they will ignore their resolution. The members then pass a resolution removing a director. They then vote to replace the managing director.
Required:
If you do not consider the members have acted correctly, provide alternative procedures they could have used.
Additional Information:
This question is belongs to Law as welll it discusses regarding a condition where the members of company remove the directors and the managing director after the disagreement over shifting manufacturing to China. Alternative processes for this condition have been suggested in the solution.
Word Limit: 376 Words