Question

SECTION C (Answer one question from this section) 6. Explain the significance of the case of Salomon v Salomon and Co Ltd (1897] AC 22. 7. Jeremy is a shareholder in A Ltd. A Ltd specialises in the sale and purchase of laptops. He has 1000 shares in the company. There are also other shareholders in the company. Jane has 500 shares, Amjad has 500 shares and Saira has 700 shares. All four of the shareholders are also directors of the company. Jane is also a director of B Ltd. B Ltd is also a company that specialises in the sale and purchase of laptops. Both A Ltd and B Ltd are competitors. When Jane became director and shareholder of A Ltd she never disclosed she was a director in B Ltd. Jeremy is the managing director of the company. He was the founder of the company and had also acted as the promoter of the company. Jeremy discovers that Jane is a director of B Ltd and wishes to remove Jane as director of the A Ltd. Answer the following questions: a) What duties are directors of a company subject to? b) Advise Jane about her two directorships. c) Advise Jeremy about his attempt to remove Jane as director of A Ltd. 8. Distinguish between private companies limited by shares and public companies limited by shares.

SECTION C

(Answer one question from this section)

6. Explain the significance of the case of Salomon v Salomon and Co Ltd [1897] AC 22.

7. Jeremy is a shareholder in A Ltd. A Ltd specialises in the sale and purchase of laptops. He has 1000 shares in the company. There are also other shareholders in the company. Jane has 500 shares, Amjad has 500 shares and Saira has 700 shares. All four of the shareholders are also directors of the company.

Jane is also a director of B Ltd. B Ltd is also a company that specialises in the sale and purchase of laptops. Both A Ltd and B Ltd are competitors. When Jane became director and shareholder of A Ltd she never disclosed she was a director in B Ltd.

Jeremy is the managing director of the company. He was the founder of the company and had also acted as the promoter of the company. Jeremy discovers that Jane is a director of B Ltd and wishes to remove Jane as director of the A Ltd.

Answer the following questions:

1. What duties are directors of a company subject to?
2. Advise Jane about her two directorships.
3. Advise Jeremy about his attempt to remove Jane as director of A Ltd.

8. Distinguish between private companies limited by shares and public companies limited by shares.

Answer 1

We were asked to answer any one question

So answering Question no.8

Difference between private companies limited by shares and public companies limited by shares

Private Company Limited by Shares	Public Company Limited by Shares
It's securitiea are not listed and not publicly traded	It's Securities are publicly traded and are listed
Minimum number of members required is 2	Minimum number of members required is 7
Maximum number of members acceptable is 200	There is no limit on the maximum number of members except the authorised share capital which can also be altered
Minimum number of directors are 2	Minimum number of directors are 3
Business commencement certificate is not mandatory	Business commencement certificate is mandatory to start it's business
Prospectus need not be issued for its Share issue	Prospectus is must for its IPO or FPO (Initial Public Offer or Further Public Offer)
Quorum for an AGM must be minimum 2 members	Quorum for an AGM must be minimum 5 members
It should have "Private limited" in its name	There is no such compulsion
There are restrictions on transferability of shares	There are no restrictions on transferability of shares. They can be traded in open market (stock market)
The rules & regulations are minimal	There are many rules & regulation to comply with, otherwise penalties & fines may be imposed
The funds are to be raised from known & close sources	The company can go to public for fund raising