Peter and Paul are good friends, who started a business by
incorporating PP Limited (“PP”), a private limited company in Hong
Kong on 1 April 2019. Peter and Paul hold 7,000 shares and 3,000
shares of PP respectively.
Peter lives in Hong Kong. Paul is a Singaporean and, for most of
the time, he stays in Singapore where he has his own business.
Although both of them are directors of PP, the operation of PP is
mainly run by Peter in Hong Kong. Peter is also the company
secretary of PP.
Chu & Chan is the auditing firm for PP. Mr Chu is a partner in
Chu & Chan and is the best friend of Paul. Pauline is the
finance manager of PP and she has had an argument with Mr Chu over
PP’s audit fee. Pauline asked Chu & Chan to resign, but Mr Chu
wants to talk to Paul about the issue of the audit fee.
Pauline has proposed to Peter that Chu & Chan should be
removed. Peter discussed Pauline’s suggestion to remove Chu &
Chan with Paul. Paul told Peter that there was no provision in PP’s
articles of association for the removal of an auditor, and so Chu
& Chan could not be removed.
Peter is unhappy with Paul’s reply and thinks that Paul is not
contributing to the business operation. Peter wants to remove Paul
as a director of PP and alter the minimum number of directors in
PP’s articles of association from two to one within one week.
a Advise Peter whether he can remove Chu & Chan and the
rights/duties of Chu & Chan in relation to the removal.
b Advise Peter on the statutory requirement for passing members’
resolution(s) in the form of a written resolution.
c Critically analyse whether Paul may be removed as a director of
PP, and whether PP’s articles of association may be altered within
one week.
d Discuss whether Peter can continue to be PP’s company secretary if Paul is removed from the board of PP.
Answer a) The general case ,the removal of an auditor is by an ordinary resolution of members at a general meeting of shareholders. As Peter has majority of shares in company , he can remove the auditor.(Section 419(1))
Answer b)Section 547 of act explain about the written resolution , a proposed written resolution should be passed by the eligible members entitled to vote on the resolution on the date of resolution.
A resolution can be passed for any decision about company , without any previous notice , by a written resolution by eligible members.
Section 549: Any resolution in general meeting may be considered as a written resolution by— (a) the directors or (b) a member
Answer c) .Paul may be removed as a director of PP by the removal of an director by an ordinary resolution of members at a general meeting of shareholders, but PP’s articles of association may not be altered within one week, it requires more time generally 2 or more weeks for the same,
Answer d) No peter cannot continue to be PP’s company secretary after removal of Paul, as sole director can't allow to act as secretary in PP limited company in HongKong.
Peter and Paul are good friends, who started a business by incorporating PP Limited (“PP”), a...
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