4) The articles of Spades Ltd. Provide, inter alia: i) Any shareholder appointed to the position of managing director shall hold the position for life. ii) Any shareholder who at any time wishes to transfer any or all of his shares shall first offer them to existing shareholders of the company who shall be obliged to purchase such shares at the original purchase price” In September, Karen, a shareholder, was appointed managing director of Spades Limited The Board of Directors has decided to dismiss Karen immediately because of her poor performance on the job to date. Joseph, a shareholder, wishes to sell his shares and has received an offer from Peter, who is not a shareholder, to buy shares well above the original price. Melissa, an existing shareholder, is adamant that she should be allowed to purchase Joseph’s shares at the original price. Joseph is the only shareholder who currently holds less than 5% of the shares of Spades Limited Question: Advise Karen and Melissa.
4) The articles of Spades Ltd. Provide, inter alia: i) Any shareholder appointed to the position of managing director shall hold the position for life. ii) Any shareholder who at any time wishes to transfer any or all of his shares shall first offer them to existing shareholders of the company who shall be obliged to purchase such shares at the original purchase price” In September, Karen, a shareholder, was appointed managing director of Spades Limited The Board of Directors has decided to dismiss Karen immediately because of her poor performance on the job to date. Joseph, a shareholder, wishes to sell his shares and has received an offer from Peter, who is not a shareholder, to buy shares well above the original price. Melissa, an existing shareholder, is adamant that she should be allowed to purchase Joseph’s shares at the original price. Joseph is the only shareholder who currently holds less than 5% of the shares of Spades Limited Question: Advise Karen and Melissa.
Chapter12: S Corporations
Section: Chapter Questions
Problem 7DQ
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Question
4) The articles of Spades Ltd. Provide, inter alia:
- i) Any shareholder appointed to the position of managing director shall hold the position for life.
- ii) Any shareholder who at any time wishes to transfer any or all of his shares shall first offer them to existing shareholders of the company who shall be obliged to purchase such shares at the original purchase price”
In September, Karen, a shareholder, was appointed managing director of Spades Limited
The Board of Directors has decided to dismiss Karen immediately because of her poor performance on the job to date.
Joseph, a shareholder, wishes to sell his shares and has received an offer from Peter, who is not a shareholder, to buy shares well above the original price. Melissa, an existing shareholder, is adamant that she should be allowed to purchase Joseph’s shares at the original price. Joseph is the only shareholder who currently holds less than 5% of the shares of Spades Limited
Question:
Advise Karen and Melissa.
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