1 BUSI3803 Company Law 2022-23 (Semester 2) Dr.

Ida Mak

BUSI 3803 Company Law

2022-23 Semester 2 (Subclasses D and E)

Written Assignment#2

Guidelines for Company Law Written Assignment#2

· Submission Due Date: 10 April 2023 (HKT 23:59). Points will be deducted for late
submission.
· This written assignment will account for 15% of the total marks awarded for this
course.
· This is an INDIVIDUAL ASSIGNMENT and must be completed individually.
· Your assignment must be typed in 12-points Times New Roman font, 1.5 spacing
with 1 inch margin in all sides.
· All sources should be properly referenced. Students may use citation styles, such as
APA, Chicago, etc. Students may also use the following guides for legal citation:
o Hong Kong Law Journal Style Guide
https://web.law.hku.hk/hklj/house-style.php.
o Legal Citation Style Guide (The Chinese University of Hong Kong, Faculty
of Law)
https://libguides.lib.cuhk.edu.hk/ld.php?content_id=48652455
· This assignment must be submitted via Turnitin on the course Moodle page.
· The purpose of this assignment is to test your ability to apply your knowledge and
develop critical analysis of the law. Please make sure you understand the law and
legal principles from the lectures.
· Students are advised to follow the IRAC approach to deal with scenario-based
questions. Please refer to the Assessment Rubric for scenario-based questions
from the Moodle for details.
· Please answer the following questions with reference to Hong Kong Laws (e.g.,
Companies Ordinance (Cap.622), cases decided by the Hong Kong courts or case
precedents from other countries under common law jurisdictions, etc.)
· There is no minimum or maximum word limit or page limit for this assignment.
· At the top of the first page, please type in (i) “Written Assignment#2”, (ii) your
UID number (i.e., 303xxxxxxx), and (iii) the sub-class (i.e., D or E) you belonging
to. Please DO NOT type your name on the assignment.

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Copyright © 2023 – The University of Hong Kong/Dr. Ida Mak
2 BUSI3803 Company Law 2022-23 (Semester 2) Dr. Ida Mak

Fact Scenario

Ivan was recovered from the car accident. Ivan and Jezebel decided to proceed with their
original plan by incorporating an art gallery business through a private company limited
by shares. In January 2023, Ibel Arts Gallery Company Limited (“Ibel Arts Gallery”) was
formed in Hong Kong. Ibel Arts Gallery had issued 800,000 ordinary shares of HK$1
each. Ivan and Jezebel are the only directors of Ibel Arts Gallery, and each hold 40% of
the company’s shares. Kate, a well-known oil painter holds the remaining 20% of the
company’s shares.

The company relies the Model Articles for Private Companies Limited by Shares with the
following article:

‘Article 3: Any member who intends to transfer shares to a person who is not a
member of Ibel Arts Gallery Company Limited must give notice of his intention
in writing to the board. The directors reserve the right to refuse to register the
transfer of shares by any member for whatever reason.’

Both Ivan and Jezebel sought to maintain control over Ibel Arts Gallery in the hands of
their family members. At a board meeting, both Ivan and Jezebel decided that the
company would issue another 200,000 ordinary shares of HK$1 each to their family
members. Kate was unhappy with this arrangement. She sold all of her existing shares to
her boyfriend, Linton. However, Linton never confirms that the shares have been properly
registered in his name.

Ibel Arts Gallery delivered a good financial performance in the first half of the year. In
September 2023, Ibel Arts Gallery paid a dividend to its shareholders. However, Linton
did not receive any dividend. He claims that he has the right to receive dividends.

Required:

(a) Advise Kate on whether Ivan and Jezebel are in breach of any directors’ duties.
(b) Advise Ivan and Jezebel on whether they can enforce Article 3 of the articles against
Kate.
(c) Advise Ivan and Jezebel on any means by which Ibel Arts Gallery might prevent Linton
from claiming the dividend.

This content is copyright protected and must not be shared, uploaded or distributed without permission.
Copyright © 2023 – The University of Hong Kong/Dr. Ida Mak