1. Jane and Bob had been running a boat-building business through a company “National Boat Builders Pty Ltd” for over 25 years. Both Bob and Jane were directors and shareholders with Bob holding 76 of the 100 issued ordinary shares and Jane holding the remaining 24 issued shares. Last year Bob died, leaving his shares to his son Michael.
Michael is not a ‘hands on’ manager like his father and Jane is concerned that the business is rapidly deteriorating through Michael’s neglect. Jane also suspects that the company is paying Michael a large management fee which the company can’t sustain. Jane can’t verify either of these concerns as Michael refuses to give her access to the company books.
Michael has indicated to Jane that he has negotiated the sale of the boat building business of the company to another company. Michael is the majority shareholder of the proposed purchaser. National Boat Builders will then switch its focus to aircraft detailing (a hobby of Michael’s, but an activity in which the company has never been involved).
He says a resolution ratifying the sale and approving a modification of the objects set out in the company’s constitution to record the proposed change in business activity has been passed. Jane did not receive any notice of any meeting of members being held. Jane does not agree with either of the proposed changes.