Business Structures and Regulations Custom Essay

Ten years ago, Jane formed Skulls Brewery Ltd, a small company manufacturing real ale products. The company’s constitution specifies that the company will manufacture and sell only real-ale products (which are defined as excluding lager).
Two years ago, Jane persuaded Nina, who was in charge of manufacturing at the brewery, to take on a larger role in the company. Nina invested £50,000 in the company, and received a 30% shareholding in return. Two additional regulations were also added to the Articles. The first says that Nina is entitled to be a director for life. The second says that if Jane wishes to sell her shares, she shall first offer them to Nina. Jane still owns the remaining 70% of the company’s shares, and Jane and Nina are the company’s only directors.
At a recent board meeting, Jane told Nina that she had been approached by the owners of a local hotel which wants Skulls Brewery to supply them with a large quantity of lager. Nina argued that the company was prevented by its objects clause from entering into such a transaction, but Jane replied that the deal was too good to miss. Jane also informed Nina that she (Jane) had been approached by Brecon Plc, which was offering to buy Jane’s shares in Skulls Brewery for a very generous price. Jane told Nina she intends to sell her shares to
Microbrewers, without first offering them to Nina. Jane also told her that once Microbrewers has acquired Jane’s shares, it intends to remove Nina as a director of the company.
Advise Nina whether she can:
a) prevent Skulls Brewery from entering into the contract to sell lager to the local hotel; (36 marks)
b) force Jane to offer her shares to Nina before selling them to Brecon and, if so, whom she (Nina) would sue; (28 marks)
c) prevent her removal as a director by Brecon if it succeeded in acquiring Jane’s shares in Skulls Brewery. (36 marks)