Legal Business Management
Lorraine and Brenda have been in partnership in the antique trade since 2008. They have both
been employed full time in the business and have shared profits equally.
In September 2015, they decided that it is an appropriate time to convert their partnership into a
private limited company called Webb Ltd, in which Lorraine will hold 55% of the shares and
Brenda 45%; but that both will be the directors of the company.
They seek your advice on the following matters:
(a) What are the documents which they have to submit to the Registrar of Companies for approval
in connection with the formation of the company?
(b) In what way may the first directors of the company be appointed?
(c) To what extent, if any, may the company’s financial affairs be kept secret from the public?
In October 2015, the company is formed and the directors appointed. The company’s certificate
of incorporation is dated 10 October and the shares are allotted at a board meeting held on that
date. Brenda has now discovered that the Registrar of Companies did not sign and issue the
certificate until 20 October 2015.
(d) Brenda wishes to know whether she can challenge the validity of the share certificate on
grounds that the company was not incorporated on 10 October 2015 (the date the shares were
In November 2015, Lorraine and Brenda begin to disagree as to how the business should be
run. Lorraine decides that she no longer wishes Brenda to participate in the running of the
business. She wishes to remove Brenda from the board.
(e) State the procedure Lorraine must follow to effect Brenda’s removal.
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