Question 2abc
Fred is a member of Glad Ltd, a small publishing company, holding 100 of its 500 shares. The other 400 shares are held by four other members.
It has recently become apparent that Fred has set up a rival business to Glad Ltd and the other members have decided that he should be expelled from the company. To that end they propose to alter the articles of association to include a new power to ‘require any member to transfer their shares for fair value to the other members upon the passing of a resolution so to do’.
Required:
| (a) | State the procedure which Glad Ltd must follow to alter its articles of association. |
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| (b) | Explain the effect of the requirement that any alteration to a company’s articles of association must be for the benefit of the company as a whole. |
| (c) | Explain whether or not the articles of association of Glad Ltd can be altered as proposed. |