Assignment
(MALAYSIA) COMPANY LAW REFER TO COMPANIES ACT 1965
PLEASE ANSWER ANY TWO (2) QUESTIONS
Question 1
Is the doctrine of "Separate Legal Entity" still relevant today?
Support your answer with relevant cases and legal arguments.
Question 2
Happy Sdn. Bhd. was incorporated in January 2015. The company specialises in the manufacturing of plastic bottles as reflected in its Memorandum of Association. Adam and Jimmy are both directors and shareholders of Happy Sdn. Bhd. Prior to its incorporation, Happy Sdn. Bhd.'s promoter Marion entered into a contract for raw material supplies and other machineries with Suppliers 4U Sdn. Bhd in December 2014.
With reference to relevant cases and provisions of the Companies Act 1965, advise Happy Sdn. Bhd. on the following issues which had arisen:
i) The status of the contract entered into by Marion prior to its incorporation.
ii) The Board of Directors through the passing of a resolution has decided to expand the company's business toward the trading of soft drinks; a collaboration with Grape Rocks Sdn. Bhd. Delores, one of its debenture holders objected to the decision.
Question 3
EDDIE and ADA each holds 2000 preference shares in Sunshine SdnBhd (the company). They are the only preference shareholders in the company. The Article of Association of the company stated that preference shareholders have a right to a fixed dividend of 12% per annum. Last month the company convened a meeting of the ordinary shareholders and passed a special resolution altering the Article of Association to the effect that preference shareholder shall only have a right to fixed dividend of 8% per annum. EDDIE and ADAwere later informed by the company that henceforth they would only be entitled to a fixed dividend of 8% per annum.
EDDIE and ADAare unhappy with the alteration and seek for your advice as to whether they can challenge the validity of the decision of the company.