Assigment Law

2931 Words Apr 16th, 2011 12 Pages
This is one of our Company Law's assignment given by our lecturer in our senior year, during the tutorial classes. Just to share our answers.

Question

Pearl, Jade & Diamond decided to form a limited company. The company will be involved in the entertainment business providing models and dancers for the industry. In the meantime, they entered into a contract of employment with Tyra. Tyra is to act as their event manager. The terms of the contract states that Tyra will be paid RM10,000 a month and will continue to work with the company once the company has been formed, for a period of three years.

Three months later, a company known as CayoteUgly Bhd (CUB) was formed. CUB’s MOA expressly states that the business of the company is to
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In addition, Tyra was referred as a promoter because she is the person entered into contracts on behalf of a company before that company has received its certificate of incorporation. In Twycross v Grant (1877) 2 CPD 469, for example, Cockburn CJ declared that a promoter was:

“one who undertakes to form a company with reference to a given project and to set it going, and who takes the necessary steps to accomplish that purpose”

In regards, the CayoteUgly Bhd (CUB) was formed and the Board of Director’s meeting has decided to issue their shares to the public. Impulsively, Tyra’s employment was come to an end, and it was absolutely contravened with the contract she had, which was stated that she will continue to work with the company once the company has been formed for a period of three years. Besides that, she will be paid for RM 10,000 per month. Hence, the issue is whether Tyra would be successful in her action against CUB for breach of contract or not?

CUB is a public company and by that it may issue shares to the public with the requirement to issue form of application for shares or debentures with a prospectus [1]. As evidence on this, Section 15 provides that a public company is not affected by the restrictions, limitations and prohibitions and it may offer its shares and debentures to members of the public. On the other hands, a company limited by shares is defined as, “a company…