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Question 9c

In 2008, Dee, Fi, Gee and Ki formed a private limited company to pursue chemical research. They each took 100 shares in the company and each of them became a director in the company. The articles of association of the company were drawn up to state that Dee, a qualified accountant, was to act as the company secretary for a period of five years, at a yearly salary of £20,000.

In May 2012, Fi, Gee and Ki discovered that Dee had passed on some research results to a rival company.

As a consequence, Fi, Gee and Ki propose the following measures:

(c) to alter the articles of association to require Dee to sell her shares to them.

Required:

Advise Fi, Gee and Ki as to the legality of the above proposals and how they may be achieved.

Note: The split of the mark allocation is shown against each of the proposals above.