CONFIDENTIAL LAW 2053

CASE STUDY SCENARIO

Far East Sdn Bhd, a company limited by shares, was incorporated on 3rd February 2015
by Tania, Naim and Harris. Each hold shares of 50% (Tania), 30% (Naim), 20% (Harris).
By agreement of all, the company has adopted constitution.

The constitution provides that:

1. The object of the company’s object is to engage in importing and selling materials use
for interior designs.

2. In the event of any dispute between the members and the company, the dispute shall
be referred to mediation.

3. The managing director is given a right to claim travel expenses up to RM3000 per
month.

After a month of its incorporation, the company signed a 10-year contract with Soft
Foam Enterprise to supply materials used to design bathroom interior walls. On 3rd
January 2022, Daud became the fourth shareholder in Far East Sdn Bhd when he
purchased 2% shares owned by Tania.

At the company’s AGM on 5th February 2022, the company has declared a dividend of
7% for the year 2021. By 1st March 2022, every shareholder except Daud has received a
payment of dividends into their personal account. Daud, who was dissatisfied with the
failure of the company to pay his dividend was intent on taking the matter to court.

Far East Sdn Bhd is yet to pay RM 85,000 to Soft Foam Enterprise for materials supplied
between September 2019 and February 2020, just before the Malaysian government’s
declaration of movement control order in March 2020. Soft Foam Enterprise has sent a
demand letter to Far East Sdn Bhd. Daud, who just become a shareholder, wants to
know his liability towards the debt.

END OF SCENARIO

3rd feb 2015 – (FE) Incorporated

3rd March 2015 – signed 10 years contract (SF)

3rd jan 2022 – daud (2% shareholder), tania (48%), naim (30%), harris (20%)

5th feb 2022 – 7% dividend except daud

Sept 2019 – feb 2020 – far east belum bayar rm85000 to soft foam, just before

March 2020 – MCO

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QUESTIONS:

1. Advise Daud about his intention to take legal action against the company regarding
the failure of the company to pay his dividend.
[15 marks]

2. Advise Daud regarding his liability towards the debts with Soft Form Enterprise.
[15 marks]

[Total : 30 marks]

END OF QUESTIONS

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RUBRIC: ONLINE ASSIGNMENT (30%)

CRITERIAS MARKS

Students are able to identify issues. 0-2

Students are able to identify ALL relevant provisions & 0-6

decided cases that will be applied by the court to decide
on arising issues.

Students are able to analyze issues with related 0-5

authorities.

Students are able to make a clear conclusion. 0-2

Question 1 : _____ / 15

Question 2 : _____ / 15