Advise thea and analysis - relevant cases

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Reference no: EM133215934

Company law

Skoot Ltd is a manufacturer of electric scooters. The company's articles are in the form of the Model Articles for Private Companies Limited by Shares. Thea is the company's founder and sole director, with a 33.3% shareholding. The remaining 66.7% of the company's shares are held by Una, a venture capitalist. Thea is a scooter enthusiast who runs the business as her own personal vocation. In her spare time, she is also the trustee of a charity dedicated to reducing car usage by encouraging wider use of scooters instead. Una, on the other hand, has no interest in scooters and is only concerned with making as much money from the business as possible.

Thea has proposed that Skoot Ltd sells 10,000 of its newly-manufactured adult scooters to her charity at cost price (i.e. on a not-for-profit basis), so that they can be made freely available within her local community. She claims that, as well as "doing good in the world", this will also enhance Skoot Ltd's brand image as more people will be seen using the company's scooters. However, Una is firmly opposed to the idea, which she feels will be an unnecessary waste of the company's resources.

Notwithstanding Una's opposition, Thea has vowed to press ahead with her plan. In response, Una has threatened to use her majority voting power to block Thea's intended transaction. Una has also threatened to dismiss Thea as a director of the company and to appoint herself as a replacement director unless Thea immediately aborts her plan. In response, Thea protests that Una has no say over any of Skoot Ltd's business affairs and should therefore "keep her nose out of things".

Advise Thea.

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Issue

Rule/Law

Analysis - Relevant Cases

Conclusion

Reference no: EM133215934

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