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Exe Ltd includes the following provisions in its Articles of Association. If Exe Ltd acted in breach of these clauses, identify which would not be enforceable against the company as a breach of contract.
Suggested Answer: B
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31 comments · newest first
RY
Ryan
11 months ago
D is interesting, but how do you determine a "fair price"?
ST
Starr
11 months ago
A sounds solid, but B is just standard practice, right?
FR
Frederick
11 months ago
Wait, are you sure about C? Seems a bit harsh to just dismiss it.
HU
Huey
12 months ago
I agree, C is a no-go. Can't tie someone down like that.
IN
Ines
12 months ago
C is definitely not enforceable. Lifelong contracts are tricky!
RO
Rosina
12 months ago
The clause about selling shares seems tricky too. I recall a practice question where the company had to follow specific procedures for share buybacks.
CH
Chan
1 year ago
I’m not entirely sure, but I feel like the dividend payment clause could be enforceable since it relates to shareholder rights.
BE
Beckie
1 year ago
I think the clause about Tom being the managing director for life could be problematic. It seems too absolute and might not hold up.
SH
Sharita
1 year ago
I remember discussing how certain provisions might not be enforceable, especially if they conflict with company law.
AL
Alline
1 year ago
This is a tricky one. I'll need to be really careful in my analysis to make sure I don't overlook any important details. Gotta stay focused and not get tripped up.
EL
Elvis
1 year ago
Okay, let's think this through step-by-step. First, I need to identify the key legal principles around the enforceability of articles of association clauses. Then I can apply those to each of the provisions given in the question.
JO
Jolene
1 year ago
Hmm, I'm a bit unsure about this one. I'll need to review the relevant laws and principles around the enforceability of articles of association provisions. Gotta make sure I don't miss anything.
NA
Natalie
1 year ago
This question seems straightforward, I think I can handle it. I'll need to analyze each provision and determine which one would not be enforceable against the company.
DO
Dorothea
1 year ago
Clause B about shareholder voting rights sounds pretty standard, but Clause C is just asking for trouble. The company will be stuck with Tom whether he's good or not.
BI
Billi
1 year ago
Yeah, having a clause like that could really limit the company's options in the future.
RI
Rima
1 year ago
I agree, but Clause C seems risky. What if Tom is not a good managing director?
CO
Cory
1 year ago
Clause B is definitely important for shareholder participation.
RE
Reuben
1 year ago
Haha, can you imagine Tom as the company's MD for life? I bet he's already planning his retirement villa on a private island.
MA
Mattie
1 year ago
Clause A about paying dividends in cash is reasonable, but Clause C is just absurd. The company can't be bound to a managing director for life!
AN
Annmarie
1 year ago
D) Shareholders wishing to sell their shares shall offer them to the company which will purchase them at a fair price as determined by the auditors.
AR
Armanda
1 year ago
B) All shareholders are entitled to attend and vote at general meetings of the company.
JA
Jame
1 year ago
D) Shareholders wishing to sell their shares shall offer them to the company which will purchase them at a fair price as determined by the auditors.
KA
Kayleigh
1 year ago
B) All shareholders are entitled to attend and vote at general meetings of the company.
DI
Dick
1 year ago
A) Shareholders shall be paid dividends in cash.
MA
Maybelle
1 year ago
A) Shareholders shall be paid dividends in cash.
DE
Della
2 years ago
I think Clause D could also be unenforceable. Forcing shareholders to sell their shares to the company at a price determined by the auditors seems too restrictive.
AL
Alpha
2 years ago
But what about clause D? It also seems restrictive for shareholders.
RO
Rozella
2 years ago
I agree with Joseph. Having Tom as managing director for life seems unreasonable.
SI
Silva
2 years ago
Clause C is definitely not enforceable. Appointing a managing director for life is an unreasonable restriction on the company's management.
LE
Lettie
1 year ago
I think clause D would also not be enforceable because it restricts shareholders' ability to sell their shares freely.
JO
Joseph
2 years ago
I think clause C would not be enforceable.