Reference no: EM13136687

Question 
REMEMBER - only answer this question based on the material in Lectures 1 - 4. 
Do not discuss directors' duties or the oppression remedy. 

Bedrock Industries Ltd is a company which quarries stone and marble for kitchen benchtops. There is one class of ordinary shares in the company. Fred, Barney, Betty and Wilma each hold 20% of the shares. Fred and Wilma are also directors of the company, and the third director is their accountant, Lee, who does not own any shares in the company. The remaining 20% of shares are owned by numerous small shareholders, with each owning no more than 1%. One of those small shareholders is Mel. At annual general meetings, Mel often asks probing questions about the company's profitability and its plans for the future. The three directors find this annoying and embarrassing. 

Assume that the company relies on the replaceable rules in the Corporations Act 2001. Fred, Barney, Betty and Wilma seek your advice on the following proposals: 

1. Can the company in general meeting pass a resolution to adopt a constitutional term that would allow it to compulsorily acquire the shares of anyone holding less than 5% of the company's share capital? 

2. What procedure would the company have to follow if it wanted to decrease the rights of some shareholders to vote at annual general meetings? 

3. Assume now that Barney and Betty are tired of Fred and Wilma dominating the decision making of the company's board. Many of the small shareholders agree. Can Barney and Betty call an extraordinary meeting of shareholders and put a resolution that Fred and Wilma be removed as directors of the company? If so, explain the procedure for this to take place.