What are the effects of the statutory contract

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Reference no: EM133039022

Management of Companies

Question 1) Explain to a client why the rules governing the internal administration and management of their company are ‘replaceable'.

Question 2) What are the three effects of the statutory contract?

Question 3) Outline the steps a company must take if it wishes to modify its constitution.

Question 4) Company A was registered on 1 April. On 1 May, members vote in favour of adopting a constitution. This resolution is passed by 55 per cent of the votes cast. Is this adoption permissible?

Question 5) Pip was a promoter of Company A. Pip made three contracts on behalf of the yet-to-be-formed Company A. On the registration of Company A, Pip became a founding director. Advise Pip on how she can avoid liability for the pre-registration contracts she made.

Problem

Adam and Poh, two young entrepreneurs, wish to form a small proprietary limited company to operate a restaurant. The company was to be called ‘Master Plate Pty Ltd'. On 22 February, Adam entered into a contract with Irish Linen Ltd to purchase 18 monogrammed tablecloths. He executed the contract in the name of Master Plate Pty Ltd (‘Master Plate').

On 24 February the proposed company was registered. The company did not adopt a constitution. Adam and Poh each took 50 per cent of the issued capital, and both were appointed as directors. Due to a dispute between Adam and Poh regarding the contract with Irish Linen Ltd, that contract was not ratified by Master Plate until 30 March.

On 1 April, Adam orders restaurant-quality cutlery from Carvers Pty Ltd. Adam affixes the company seal and signs the contract. What assumptions are Carvers Pty Ltd entitled to make?

It is now 1 May. The tablecloths supplied by Irish Linen Ltd have been delivered to Master Plate but not paid for. Explain who may be liable to pay for them.

Reference no: EM133039022

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