This assessment consists of TWO questions, question One and question Two. You

MUST answer BOTH questions.

Question One

Critically discuss the advantages of a limited liability company over other forms of

business organisations.

(LO 1, 2 and 4)

(1500 words)

(40 marks)

Question Two

QuietLife Ltd (the “Company”) is a private company limited by shares which has

adopted the Model Articles for Private Companies Limited by Shares as its Articles

of Association. Grace and her brother, John, hold 20% of the shares each while their

cousins, Francis and Edward, hold 30% of the shares each. Francis and Edward are

also directors of the company.

Grace and John have had a serious disagreement with Francis and Edward. Grace

and John have alleged that the directors are approving excessive payments to

themselves for the services they provide to the Company. Furthermore, although the

Company is a profitable one, no dividend has been paid to the shareholders for six

years.

Grace recently transferred her shares to her daughter, Samantha, but the directors

refused to register the transfer without giving reasons for their refusal

Advise Grace and John as to any remedies they have as shareholders.

(LO 2, 3 and 4)

(60 marks)

(2500 words)

Higher marks will be awarded for answers that include appropriate analysis and

evaluation of the key issues, supported by relevant use of literature that indicates wide

reading.