Company Law 

Question:

Clayton, Cliff and Glen work at Wireless Us Ltd as directors and are also shareholders. Susan and Ben are shareholders of the company as well. Susan was sent by the board to attend a meeting with potential clients and to make a decision to buy a new software because the board could not make a decision from the previous meeting. Whilst at the meeting, Susan decided to order an extra software for the company. Clayton, Cliff and Glen later found out that Susan had ordered an extra software for the company and are furious.

Clayton is a software engineer and the company always rely on him to advise the company when they are acquiring new computers. Clayton when to ‘My Computers Ltd’ to purchase some computers for the company. Once there, Clayton met and old friend and they chatted for a long time. Clayton did not have enough time to check that the computers were working and he just placed an order for 20 computers to be delivered to Wireless Us Ltd. Once the computers were delivered, Clayton, Cliff and Glen realised that there were all rubbish and could not be returned because Clayton signed that he had checked the computers.

Wireless Us ltd wanted to build an extension to their warehouse. Glen was asked to make sure he gets someone suitable to do the job. Glen knowing that the company was ready to pay a lot of money for that extension to be built urgently, got his nephew Tom to do the job. He told Tom to demand for more money than what the company was offering. Glen then told the rest of the board of directors that Tom was the best and only available builder he could find, but did not disclose that Tom was his nephew. Susan found out through her boyfriend that Glen and Tom were related and she is determined to make Glen pay.

Faith is a cleaner with Wireless Us Ltd. She has recently complained about the resources provided for her to use for cleaning. Clayton, Cliff and Glen claim it is more important to make sure that the business succeeds and to keep Ben and Susan happy, rather than thinking about Faith. Faith is furious and argues that she works hard for the company, and the business will not be doing so well if the customers were to complain of a dirty environment. Faith believes that her interest should be considered by the board of directors as a matter of urgency.

Advise Clayton, Cliff and Glen on whether Susan has any liability as a director of the company and, if so, if she has breached any of the statutory duties in the Companies Act 2006. Advise any duties Clayton, Cliff, and Glen might be in breach.