COMPANIES ACT 2006

A case study on: Brilliant Baskets Limited

A case study on: Brilliant Baskets Limited

Introduction

The given case is concerned about the Brilliant Baskets Ltd (B.B. Ltd.) in which three major issues about the company is discussed. The B.B. Ltd. was set up by two brothers that are Nathan Scott and Lucas Scott who were the sole shareholders and directors up till 2002. They provide sports coaching to schools. After two years they decided to appoint two more directors with 25% shares to each of the director, so Marvin McFadden and Antwon Taylor were appointed.

The first issue related to B.B. Ltd. is that in May 2009, Antwon resigned from the board and was offered the coaching contract with Tree Hill School, in his personal capacity, for two years commencing June 2009. Antwon's resignation from the board was unconnected with the coaching contract with Tree Hill School. Three months prior to his resignation, Antwon had been coaching a team of school children and during the session, two of the children had been injured.

Another issue is that in December 2009, B.B. Ltd. was looking to replace their existing staff uniforms with new designs. Marvin was put in charge of organizing the replacement uniforms in time for the New Year. Marvin instructed COB Designers Ltd (COBD Ltd) to design the new uniforms without investigating any other potential suppliers. Unknown to the other board members, the majority shareholder in COBD Ltd is Brooke Davis who was the Marvin's wife. Two months ago, the Board also approved the acquisition of a small office building from COBD Ltd for £175,000.

The third issue is that in March 2010, Nathan and Lucas were approached by Peyton Sawyer of Great Labels Ltd (G.L. Ltd.) in relation to the possible takeover of B.B. Ltd. by G.L. Ltd. Peyton informed the brothers that G.L. Ltd. wanted to acquire B.B. Ltd. because of the prime freehold titles it held and that B.B. Ltd. would cease trading after the takeover, should G.L. Ltd. be successful. Due to G.L. Ltd. future plans for B.B. Ltd., Nathan was against the takeover. For this purpose, Peyton approached Lucas separately and offered him a position as a Director at G.L. Ltd. for a guaranteed term of five years with annual remuneration of £225,000 if he could convince the other shareholders to approve the takeover.

So, from the case it is understood that the issues related to B.B. Ltd. are Antwon's resignation, Marvin's favoritism and G.L. Ltd. offering position and other benefits to Lucas for convincing the other share holders for the takeover.

Discussion

Legal Authorities and Rights of Share holders

The Companies Act 2006 provides different rights and authorities that are concerned to the case of B.B. Ltd. These rights and authorities are made for managing the business environment and its activities in an efficient and effective manner so that no problems could take place which could negatively affect the business activities.

Voting

The share holders can vote either as a group or as individuals according to the Companies Act ...