LEGAL ISSUES

Law Case Study Analysis

Law Case Study Analysis

Introduction

The case given for analysis is about two partners, John and Janet, who established a company without submitting Articles of Association while completing the application to the Registrar of Companies. Both the partners became directors, but after 18 months, one of the directors, Janet, resigned while remaining a shareholder in the company. After her resignation, Mary voted as a director. However, there occurred a legal issue and concern when John and Mary have, in their capacity as directors, allotted 600 more shares to John and 400 shares to Mary. This action has observed by Janet as a cynical ploy to exclude her from having any role in the company, in which she continues to be a shareholder. Thus, this paper provides an advice to Janet on any remedy she may have in the circumstances. Furthermore, it also highlights the legal grounds on which any remedy may be justified.

Discussion

General Area of Law Relevant To the Case Study Problem

In a broader view, the law related to the case study problem is 'Company Law', since the case reveals that there wasn't any Articles of Association declared by the partners when they established the company. A Company Law asks for Articles of Association by clearly stating that a firm should have articles of association that prescribes regulations for that organization (UK Govt. Legislation, 2006, p.7). Company law of the United Kingdom governs that all the companies must provide their articles of association for the company in order to clearly prescribe the rules and regulation. The importance of articles of association is highlighted by the Company Law, which indicates the concern in the given scenario. Therefore, the law relevant to this case issue is Company Law, which is further discussed comprehensively later in this report.

In addition to a broader aspects of Common Law relevancy to the given legal scenario, there are in-depth rooted relevant laws including pre-emptive rights on allotment comes under the Companies Act 2006, restrictions on director's power under common law, and Companies Act 2006 for director's duties in line with shareholder's interest (IVIS, 2008, n.d). Hence, the major law covers this case is a common law, company law, and the specific law related to the issue is Companies Act 2006. This is because these laws covers the main issues and concerns associated with the case including articles of association, director's duty in line with shareholder's interest, pre-emptive rights of shareholder's, reducing existing shareholder's power, and some others.

Specific Issues & Points of Law Central to the Case

Several specific issues and concerns of law central to the given case are observed here. The first and foremost issue is of articles of association, since John and Janet did not declare any articles of association while completing the application to the Registrar of Companies. The Company Law, Companies Act 2006, specifically demands articles of association (as already mentioned above) at the time of formation of an organization in order to prescribe rules and regulation, including directors as ...