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Business Law
In 2019, three friends (Amy, Lee and Chu) incorporate Bold Fresh Pty Ltd to operate a retail fashion shop that specialized in selling the latest trendy fashion designs. Amy and Lee each held 45% of the issued shares in the company and Chu held the remaining 10% of the shares. The company's constitution stated that all three were directors of the company, with Amy being appointed as the managing director.
Chu is very critical of Amy's management but lacks the support of Lee in confronting Amy about her style of management. Lee informs Amy about the Chu's dissatisfaction. To teach Chu a lesson, Amy and Lee decide to incorporate a new company called Bolder and Fresher Pty Ltd in which Amy and Lee are equal shareholders. Bolder and Fresher Pty Ltd, incorporated in January 2020, trades in the neighbouring suburb selling similar products to Bold and Fresh Pty Ltd. Amy and Lee divide their time between the two businesses.
Chu is incensed when he hears about these developments but is unsure what he can do as he feels that he has been outsmarted by his friends.
Question:
Advise with reference to the Corporations Act 2001 (Cth):
The rights of Bold Fresh Pty Ltd to take legal action and, if so, how?
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