Reference no: EM133682910

Hawker Chan Pty Ltd has been running a noodle shop in Melbourne

The company has 3 directors and 4 shareholders:

The directors are Bo Cheng being the head chef, Jacques who is the CEO or managing director and Joyce the purchasing director. The shareholders are:

Ken owns 5% of the shares

Bo Cheng owns 60% of the shares

Jacques owns 25% of the shares

Joyce owns 10% of the shares.

The company had adopted the replaceable rules as its constitution.

The company was awarded a Michelin star and has expanded its operations overseas.

However, with rising costs and reduced sales, the company is finding it difficult to generate sufficient profits.

The shareholders are getting anxious about this.

Ken, one of the shareholders who owns 5% of the shares and because of his personal circumstances he wishes to sell his shares.

To try and control costs and increase profitability, Joyce is on the lookout for cheaper goods.

She finds the name of a new supplier based in Thailand.

She arranges to travel to Thailand to see the new supplier and hopefully obtain the goods at a more competitive price.

Prior to the meeting Joyce emails the supplier to make a time to visit. When Joyce arrives she inspects the goods and is happy with them and buys $15,000 of supplies.

When the goods are delivered Bo Cheng the head chef inspects them and finds they are not of sufficient quality and refuses to use them.

According to the rules of Hawker Chan Pty Ltd, any purchases over $10,000 needed the  approval of Bo Cheng. Joyce did not obtain his approval when she placed the order for $15,000 of goods.

1. Advise Ken if he can sell his shares to his best friend Kenneth?

2. Advise the supplier if it can enforce the contract and get the $15,000 owing?