Does rupert have any rights under the corporations act

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Reference no: EM133226514

Assignment:

Delorean Ltd operates a distillery that produces a well-known brand of gin. Delorean Ltd has issued capital of $10 million consisting of 1,000,000 ordinary shares. The company's constitution does not provide any details about different share classes or particular rights attaching to shares.

The company was originally founded by George McEvoy Delorean. The company has three directors - Amber, Ruby and Jade - all of whom are granddaughters of the company's founder. 90% of the shares are owned by the Delorean family (ie the descendants of the company's founder).

The remaining 10% of shares are held by Rupert who is the descendant of one of the original investors in the company. All of the other original investors have since sold their shares to the Delorean family in a series of buy-outs and restructures. Rupert is the only shareholder who is not a member of the Delorean family.

In order to increase market share, the directors approve a plan to begin making vodka. To facilitate this expansion, the directors hold a meeting and unanimously resolve to:

- Issue 100,000 new preference shares (with an issue price of $10 per share) to members of the DeLorean family.

- Issue 100,000 new ordinary shares (with an issue price of $10 per share) to the public.

- Increase their own remuneration by 50% in consideration of the extra work they will need to do.

Rupert does not want any news shares to be issued because he is concerned about the impact that the proposal will have on his shares. Rupert is also concerned that the company will attempt to rush the process without following the necessary legal requirements.

Answer with IRAC method

Question 1. Does Rupert have any rights under the Corporations Act 2001 (Cth) which he could exercise to prevent the directors increasing their remuneration as planned?

Question 2. Does Rupert have any rights under the Corporations Act 2001 (Cth) which he could exercise to prevent the shares from being issued?

Reference no: EM133226514

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