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Section B - Scenario 3
SCENARIO: 'Lunar Logistics Ltd' is a space-freight startup. Before the company is officially incorporated at Companies House, the founders (promoters) sign a £50,000 contract with 'RocketTech' to purchase fuel tanks. The contract is signed 'by John, on behalf of Lunar Logistics Ltd'. Two weeks later, the company is incorporated. The board of directors immediately passes a resolution stating that the company 'adopts and ratifies' the fuel tank contract.
QUESTION: Who was legally liable on the contract at the exact moment it was signed?
ACCA · Question 54 · The formation and constitution of business organisations
Section B - Scenario 3
SCENARIO: 'Lunar Logistics Ltd' is a space-freight startup. Before the company is officially incorporated at Companies House, the founders (promoters) sign a £50,000 contract with 'RocketTech' to purchase fuel tanks. The contract is signed 'by John, on behalf of Lunar Logistics Ltd'. Two weeks later, the company is incorporated. The board of directors immediately passes a resolution stating that the company 'adopts and ratifies' the fuel tank contract.
QUESTION: Later, the majority shareholders of Lunar Logistics Ltd want to alter the Articles of Association to include a clause allowing them to forcibly buy out the shares of any minority shareholder who competes with the company. Under what condition will the court allow this alteration?
Section B - Scenario 3
SCENARIO: 'Lunar Logistics Ltd' is a space-freight startup. Before the company is officially incorporated at Companies House, the founders (promoters) sign a £50,000 contract with 'RocketTech' to purchase fuel tanks. The contract is signed 'by John, on behalf of Lunar Logistics Ltd'. Two weeks later, the company is incorporated. The board of directors immediately passes a resolution stating that the company 'adopts and ratifies' the fuel tank contract.
QUESTION: Later, the majority shareholders of Lunar Logistics Ltd want to alter the Articles of Association to include a clause allowing them to forcibly buy out the shares of any minority shareholder who competes with the company. Under what condition will the court allow this alteration?
Answer options:
Only if 100% of the shareholders agree to it.
Only if the alteration is made bona fide for the benefit of the company as a whole.
It is never allowed; articles cannot be altered to expropriate shares.
Only if the minority shareholder is compensated at double the market value.
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