Recently, ABC Ltd learned that one of its own minority shareholders registered a new company and was secretly competing with ABC Ltd for business opportunities. Briefly analyse whether ABC Ltd can amend its constitution for the purpose of expropriating the minority shareholder's shares.
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- One of the cofounders of Project Repat is no longer with the company, although he retains a small ownership stake. What complications might this change have caused if Project Repat was set up as a partnership rather than a corporation?To which of the following does a director owe his/her statutory duties? Select one: a. The members personally b. The company as a whole c. The board of directors. Edward, an accountant, is hired by C Ltd to prepare a report on the financial strength of C Ltd. Edward is informed that the purpose of the report is to persuade H Ltd to buy all C Ltd’s shares. Edward prepares the report but carelessly fails to identify that C Ltd is not profitable. Which of the following is accurate concerning Edward’s potential liability for negligent misstatement: Select one: a. Edward will not be liable to H Ltd because there was no contract between him and H Ltd b. Edward will not be liable because his advice was prepared for C Ltd, not H Ltd c. Edward will be liable because the advice was prepared specifically for the purpose of persuading H Ltd to acquire shares in C Ltd, and it was reasonable for H Ltd to rely on Edward's advice. d. Edward will not be liable because it was not reasonable for…Which of the following statements is NOT CORRECT? When a corporation’s shares are owned by a few individuals who own most of the stock or are part of the firm’s management, we say that the firm is “closely, or privately, held.” “Going public” establishes a firm’s true intrinsic value and ensures that a liquid market will always exist for the firm’s shares. Publicly owned companies have sold shares to investors who are not associated with management, and they must register with and report to a regulatory agency such as the SEC. When stock in a closely held corporation is offered to the public for the first time, the transaction is called “going public,” and the market for such stock is called the new issue market.
- Which of the following statements is NOT CORRECT? (A) Going public establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares (B) Publicly owned companies have sold shares to investors who are not associated with management, and they must register with and report to a regulatory agency such as the SEC. (C) When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public." and the market for such stock is called the new issue market (D) It is possible for a firm to go public and yet not raise any additional new capital (E) When a coporation';s shares are owned by a few individuals who own most of the stock or are part of the firm's management, we say that the firm is "closaly, or privately, held.Nelson is Organic Coffee Company's majority shareholder. Nelson decides to sell his Organic Coffee stock. The sale will be an effective transfer of the control of the company. Does Nelson owe a duty to Organic Coffee or its minority shareholders in this situation? What, if any, are those duties? What might constitute a breach?Which of the following statements is CORRECT? A The stock of publicly owned companies does not need to be registered with and reported to a regulatory agency such as the SEC. B When a corporation's shares are owned by a few individuals, we say that the firm is publicly traded. C "Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares. D When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public, or an IPO," and the market for such stock is called the new issue or IPO market. E If a firm goes public, it will always raise additional new capital for the firm itself.
- If a company’s constitution does not contain rules governing the forfeiture of shares, then the company: Select one: A. can register the shares in the name of another shareholder but cannot receive payment from that shareholder. B. may forfeit shares and reissue them at a later date. C. may forfeit shares but not reissue them. D. cannot forfeit shares.Tristan is considering buying shares in a company. Tristan asks you to explain to him what is meant by the terms ‘member’ and ‘shareholder’, and the different ways in which a person may become a member. He also asks you to explain who may be eligible to become a member, and how many members a company is permitted to have. Finally, Tristan asks: how does a person cease to be a member of a company? The solution to this questions should be in line with the rules and section of Australian Consumer LAW and ASICPretzel acts as a sponsor in creating a special purpose entity (SPE) that will purchase Accounts Receivable from Pretzel. Under what circumstances will Pretzel be required to treat the SPE as a variable interest entity and consolidate it as its primary beneficiary . a. Pretzel is not entitled to any profits that the SPE earns b. Pretzel agrees to reimburse SPE shareholders in the event the SPE has losses. c. Pretzel receives money from SPE for the fair value of assets that Pretzel sells to it d. Pretzel has no voting rights or ability to direct SPE activities e. The SPE has stockholders equity equal to 20% of SPE assets choose one
- Which of the following statements is NOT CORRECT? a. It is possible for a firm to go public and yet not raise any additional new capital for the firm itself. b. When a corporation's shares are owned by a few individuals, we say that the firm is "closely, or privately, held." c. The stock of publicly owned companies must generally be registered with and reported to a regulatory agency such as the SEC. d. When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public, or an IPO," and the market for such stock is called the new issue or IPO market. e. "Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares.What statutory protection is offered to a third party who enters into a contract with a person purporting to act on behalf of a company which is not yet formed? What are bonus shares? Why may a company wish to reduce its Share Capital?Which of the following represents one of the basic rights of stockholders? a. Stockholders may sell their stock back to the company if they wish. b. Stockholders may authorize a business contract on behalf of the corporation. c. Stockholders may determine at what price the company issues stock. d. Stockholders may participate in management by voting on corporate matters.