Question 9b
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:
| (b) | to dismiss Dee from her post as company secretary without any payment for the work she has already done, in spite of Dee’s claim that she has a contract of employment by virtue of the articles of association and that she |
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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.