Exercise On Business Law

Today, the tutorial class for business class was cancel. Unfortunately, the lecturer had provided a group homework for us. The most headache problem is i unable to form a group since there are no students attend the class and i do not have any friends that also take business class in this semester.

The only way for me to get a group is i try to contract those are same course with me but he or she is not so close with me.

Oh my God! No people want to do the homework.

My remained hope also destroyed. Now, i only can do the homework by myself.

This is my answer for the homework.

1.Explain the nature and function of each of Memorandum of Association and Articles of Association.

Memorandum of Association

Contain the necessary components of the formation of the company.

The essential contents needed are:

•The name of the company (which must end with the words “Sendirian Berhad” if it is a private company, or just “Berhad” if it is a public company)

•The situation of the company’s registered office

•The objects of the company, i.e the nature of business intended to be carried out;

•That the liability of the members is limited

•The amount of authorized capital (minimum RM 100,000) and its division into class of shares and its specific value

•Name, identity card (if Malaysian), passport (if foreigner),address and occupation of each subscriber

•Name, designation and address of the witness to the signature of each subscriber.

•The nominal amount of the authorized share capital with which it is proposed to register the company and the division of such capital into shares of a fixed amount

•The association clauses

Must be signed by at least two subscribers; duly dated.

The signature of each subscriber must be witnessed by a third person.

Each of the subscribers must undertake to subscribe for one or more shares of the company.

Articles of Association

Contain the internal rules of a company and clauses dealing with under-mentioned matters.

The essential contents needed are:

•The name of the company

•The name of each first director (minimum two)

•The name of the first company secretary

•The minimum and maximum number of directors

•The share qualifications of each director, if any

•Name, identity card number (if Malaysian), passport (if foreigner), address and occupation of each subscriber

•Name, designation and address of the witness to the signature of each subscriber

Includes a condition governing the use of a company seal on certain formal documents such as share certificates.

2.Sporty Sdn. Bhd. made a contract with ChinaSport Corp (a Chinese company) to supply gymnastic equipments to Kuala Lumpur. Unknown to Gary, Ben had made a prior back agreement with ChinaSport Corp to allocate some shares of ChinaSport Corp to Ben personally as a gift for his role in concluding the contract with Sporty Sdn. Bhd. Gary only knew this later and he asked if there is anything he could do against Ben. Please advise him and support your answer with relevant decided case law.

Sporty Sdn Bhd can sue Ben because Ben was defrauding Sporty Sdn Bhd. The court would generally lift the veil of incorporation when there are contain the element of fraud involved by Ben as subscriber of 2 companies. In this case, Ben also received gift from ChinaSport Corp. In this situation, the case should refer to Aspatra Sdn Bhd & 21 ors v. Bank Bumiputra Malaysia Bhd & Anor (1988) case.

3.In undertaking the promotion activities, Promo Sdn. Bhd. had received loan amounting to RM 1million, that is currently outstanding (overdue) and exceeds the assets of Promo Sdn. Bhd. Bank Putri Berhad (the creditor) seeks to claim for the repayment from all the company’s owners, i.e. Sporty Sdn. Bhd., Lim and Leong. Please explain to them the law on this and who should be liable to pay the debt in this situation. Please support your answer with relevant decided case law.

Promo Sdn Bhd should be liable to pay the debt in this situation based on separate legal entity. Promo Sdn Bhd is a legal independent company and its financial problem should not relate with Sporty Sdn Bhd. This situation can refer to case Salomon v. Salomon Co. Ltd.

4.Knowing that Promo has an outstanding debt amounting to RM 1million, Lim and Leong, who also acted as directors of Promo Sdn. Bhd. secured another business with a third party in which Promo has to finance the project with their money first, and therefore they applied for another loan at another bank. The loan of RM 500K was approved, but not long after that the loan was due and it was obvious that Promo Sdn. Bhd. could not pay as it already became insolvent in the first place. In the view of doctrine of separate legal entity, please discuss the liabilities of the directors (Lim and Leong) in this case. Please support your answer with relevant decided case law.

In this case, Lim and Leong would be personally liable for the debts due to they were defrauding another bank which is the debt of RM 500k. This is because they know they are unable to pay the debt. This case can refer to Lee William Leitch Bros Ltd case. For the debt RM1 million should be the liabilities of Promo Sdn Bhd due to separate legal entity. This situation can refer to Salomon v. Salomon Co Ltd case. Promo Sdn Bhd is a legal independent company, therefore the directors do not hold the responsibility of debt of the company.

5.Gary and Ben wanted to sell all their shares to Jojo and Cool respectively. What is the effect of these transactions to the status of the company Sporty Sdn. Bhd.? Please justify your answer with a case law.

The employees are still belongs with Sporty Sdn Bhd although there was some changing between the shareholders. Sporty Sdn Bhd is a legal independent company. Therefore the company has the entity by its own. There are no reasons for the employees to think that their employment is ended since the changes of the shareholders. This situation can refer to Abdul Aziz bin Atan v. Ladang Rengo Malay Estate case.

Prepared by,

Fong Yok Yan (1071120015)

Cases For Company Law

Today, I learnt a few cases for the Company Law. There are Salomon v. Salomon Co. Ltd, Lee v. Lee’s Air Farming, Macaura v. Northern Assurance Co and Abdul Aziz Atan v. Ladang Rengo Malay Estate.

The case I choose is Salomon v. Salomon Co.Ltd.

Summary:

Mr Salomon was a leather boot and shoe manufacturer. He turned his business into a limited company. His wife and 5 eldest children became subscribers. Mr Salomon took 20 001 of the company’s 20 007 shares. After the company was set up, the board directors had made a decision that to borrow money which is 10 000 from Salomon in the mortgage of the whole company’s asset. After 1 year, the Salmon & Co Ltd cannot make the assets equal to the debt and go into liquidation. In this case, the assets of Corporation compensate the secured debt of Salomon himself, and the other unsecured creditors will get nothing.

Lesson Learnt In This Case:

In law, legal person is not a real person but is a suppositional incorporation in law. The independent corporate personality is the nature and character of a legal person. Therefore, all the assets and debts are owned by the corporation but not the shareholder and the shareholders only enjoy the assets when the company go into the liquidation and compensate all the debts of secured creditors.

The limited corporation can enjoy the limited liability which means that the shareholders are responsible for the debts only the capital and practically they invest into corporation except the particular conditions.

My Opinion:

In my opinion, this is good news for the incorporation especially for the shareholders. This is because they do not have the responsibilities on the debt of the incorporation. Unfortunately, it is a disaster for the creditor especially unsecured creditors. Due to the failed in incorporation, the unsecured creditors may face problem to get back their money. This will affect the unsecured creditors’ business operation.

Prepared by,
Fong Yok Yan (1071120015)

Holding Company Vs Subsidiary Company

Holding company is a company or firm that owns other companies’ outstanding shares or stock. Holding company allows the elimination of risk for the owner and can allow the ownership and control variety of companies.

Subsidiary company is an entity that is controlled by a separate higher entity. The controlled entity can be a company, corporation, or limited liability company. The controlling entity is known as holding company.

For instance, Media Prima Berhad (MPB) is a holding company. MPB has several subsidiary companies such as Alt Media, Fly FM, TV3, 8TV and so on.

MPB can decide new appointments in the subsidiary companies. For instance, Ahmad Izham Omar will take on the role of Executive Director of 8TV, the station he launched in 2004. As Executive Director, Izham will stay involved in TV’s strategic direction but will leave the day-to-day operations to General Manager Lam Swee Kim who will be reporting to Dato Sri Farid Ridzuan, Group Chief Executive Officer of Media Prima Television Networks. This exercise will also simplify and consolidate the management structure of Media Prima TV Networks. Ahmad Izham Omar will now be able to focus n Alt Media, a Media Prima subsidiary focusing on new media, underlining MPB’s emphasis in the digital space. Izham has been CEO of Alt Media since January 2009. As the result, this fresh changes and new introductions to its senior management team will reinforce the Group’s strong focus to meet the future challenges of media industry.

Based ont this case,there is showing that the relationship between the holding company and subsidiary company. Both companies must have very intimated relationship to help each other in the industry.
Prepared by,
Fong Yok Yan (1071120015)

Congratulation to Datuk Lee Chong Wei

Congratulation to Datuk Lee Chong Wei.

He finally won the All England and achieve the another success in his life.

At this moment, all the Malaysian are proud of him and this time really is really is 1 Malaysia.

Wish all the Malaysian can stay peaceful and do not care the races whether Malay, Chinese, India and so on.

By the way, we can work together to establish a successful Malaysia, so that Malaysia can play a role in the world stage in a future like the others country.

Prepared by,
Fong Yok Yan (1071120015)

Stop Violence Againts Women

Around 5 days ago, i just wrote a blog about the Malaysia's Domestic Violence Act 521 (1994). I hope that the VAW (Violence Against Women)does not happen in our life anymore. At that time, i never think that this may happen in my surrounding.

Today, i attended a friend's 21st birthday party. and i got a bad new about 1 of my secondary friend's new which is she administered to hospital because of home violence.

This was happen around 3-5days ago. Her brother does not know what is the reason beat her after drunk. Her backbone and body are injured and have bruise. At the time, her brother pinched her neck and she cant breath at all. That time she felt she almost die but luckily she rescued by her family and escape this disaster.

In this case, i felt grateful to the God because i have a happiness family in my life. My parent and brothers are love me so much.

I wish my friend will recover as soon as possible. And hope that she can perk up to face every problem in her future life since she has to face a situation that sue her brother or not.

By the way, i also wish her Happy Birthday because 21st March 2010 is her birthday.

Prepared by,
Fong Yok Yan (1071120015)

Malaysia's Domestic Violence Act 521 (1994)

Today is 8th March 2010 which is International Women’s Day (IWD). It is an important day of global celebration of women. In different countries, the center of attention of the celebrations ranges from general celebration of respect, appreciation and love towards women to a celebration for women’s economic, political and social achievements.

Every year, 1 of the attention of women’s right in IWD is Violence Against Women (VAW). What is VAM? For instance, be it incest or rape, a husband beating his wife, a female victim of a snatch thief or a manager sexually harassing his secretary or colleague and so on. Most of the cases are happened because men use violence to exert power and control over women.

Malaysia’s Domestic Violence Act 521 (1994) is an act to provide for legal protection in situations of domestic violence and matters incidental thereto. “Domestic violence” means that commission of any of the following acts:

• Willfully or knowingly placing, or attempting to place, the victim in fear of physical injury;
• Causing physical injury to the victim by such act, which is known or ought to have been known would result in physical injury;
• Compelling the victim by force or threat to engage in any conduct or act, sexual or otherwise, from which the victim has a right to abstain;
• Confining or detaining the victim against the victim’s will; or
• Causing mischief or destruction or damage to property with intent to cause or knowing that it is likely to cause distress or annoyance to the victim,

By a person against:

• His or her spouse;
• His or her former spouse;
• A child;
• An incapacitated adult; or
• Any other member of the family.

Although Malaysia has law to protect the women, but VAW is keep on happening within the family. I hope that VAW does not happen in our life anymore since it will destroy our happiness family, disrupt our society and a lot of social problems. This is because women also are human and women also need somebody to respect them.

Prepared by,

Fong Yok Yan (1071120015)

My Contract Law Notes

Today, i prepared my business law's mid term. This is the summary notes i done for my revision.

First, i have to memorize the Essential Elements of Contract Law

1) Offer – Section 2a of Contract Act

a) Bilateral Offer

b) Unilateral Offer

Case: Carlill v. The Carbolic Smoke Ball Company Ltd

Invitation to Treat

a) Goods Displayed in the shop

Case: Pharmaceutical Society of Great Britain v. Boots Cash Chemist

Case: Fisher v. Bell

b) Advertisement in the newspaper

Case: Mazumder v. A.G. of Sarawak

Case: Partridge v. Crittenden

c) Auction sale

Case: Payne v. Cave

d) Tenders

Case: Spencer v. Harding

2) Acceptance – Section 2b of Contract Act

a) Acceptance must be absolute and unqualified – Section 7a of Contract Law

Case: Hyde v. Wrench (1840)

 Communication of Proposal – Section 4(1) of Contract Act 1950

 Revocation of Offer and Acceptance – Section 5 of Contracts Act

Case: Byrne v. Van Tienhoven

3) Intention to create legal relations

4) Consideration – Section 2d of Contract Act

a) Executory Consideration

Case: Wong Hon Leong v. Noorazman

b) Executed Consideration

c) Past Consideration

Case: Kepong Prospecting Ltd. v. Schmidt

 Without Consideration – Section 26 of Contract Act

Exception:

a) An agreement without consideration is valid if it is expressed in writing

b) Registered (if required under the law)

c) Is made on account of natural love and affection between parties standing in a near relation to each other.

 Inadequacy of Consideration – Explanation 2 of Section 26 of Contract Act

Case: Phang Swee Kim v. Beh I Hock

5) Certainty – Section 30 of Contract Act

Case: Karuppan Chetty v. Suah Thian

6) Capacity – Section 11 of Contract Law

a) Categories of persons lacking legal capacity to contract:

i) Minor

Case: Mohori Bibee v. Dharmodas Ghose

Case: Tan Hee Juan v. Teh Boon Keat

Exception:

(a) Contracts For Necesssaries

Case Government of Malaysia v. Gurcharan Singh

(b) Contracts Of Scholarship – Section 4 of Contracts (Amendment) Act 1976

(c) Contracts Of Insurance – Insurance Act 1963 (Revised 1972)

ii) Of unsound mind

iii) Specifically barred by law

7) Requirement of Legality – Section 24 of Contract Law / Section 66 of Contract Law

Status of Contract

a) Valid & Enforceable

b) Void Contract

c) Voidable Contract

 

8) Free Consent – Section 10 of Contract Act

Free Consent is said to be missing due to existence of 5 factors: (Section 14 of Contract Act)

a) Fraud

Case: Kheng Chwee Lian v. Wong Tak Thong

b) Misrepresentation – Section 18 of Contract Act

Case: With v. O’ Flanagan (1996)

i) Innocent Misrepresentation

ii) Negligent Misrepresentation

iii) Fraudulent Misrepresentation

c) Coercion – Section 15 of Contract Act

Case: Kesarmal v. Valiappa Chettiar

d) Undue influence – Section 16 of Contract Act

Case: Allcord v. Skinner (Apparent Authority)

e) Mistake – Section 21 of Contract Act / Section 23 of Contract Act

The second part of the Contract Law is Discharge of Contracts.

1. Discharge by performance

2. Discharge by frustration

3. Discharge by breach of contract

The last part of the notes is Remedies for Breach of Contracts.

1. Damages

Case: Associated Metal Smelters Ltd. v. Tham Chew Toh

2. Specific Performance

Case: Yeo Long Seng v. Lucky Part (Pty.) Ltd

3. Injunction

Case: Neoh Siew Eng

4. Quantum Meruit

Case: Planche v. Cloburn (1831)

Finally, i hope that this notes able to enhance my understand about Contract law and able to let me score high mark in the mid term test.
Prepared by,

Fong Yok Yan (1071120015)

What is Intellectual Property?

Today, I do not have the tutorial class for the business law. Therefore, I have extra time to prepare the interview for my industrial training. For the interview, I have to understand about the trademark, patent and copyright since the firm provide services that related with intellectual property registrations.

Intellectual Property (IP) is a word to refer a number of discrete types of legal monopolies over creations of the mind, both artistic and commercial, and the corresponding fields of law. Owners are granted certain exclusive rights to diversity of intangible assets such as musical, literary, and artistic works, discoveries and inventions, and words, phrases, symbols and designs. The general types of intellectual property include trademarks, copyrights and patents.

Trademark is a unique sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers which the trademark appears originate from a distinctive source, and to distinguish its products or services from those of other entities.

Trademark can divide to 3 categories:

• ™ is used for an unregistered trademark. This is a mark used to promote or brand goods.
• ℠ is used for unregistered service mark. This is a mark used to promote or brand services.
• ® is used for a registered trademark.

Trademark is a type of intellectual property. Normally, trademark can be a name, word, phrase, logo, symbol, design, image or a combination of these elements.

Copyright is the set of exclusive rights granted to the author or creator of an original work, including the right to copy, distribute and adapt the work. The symbol for copyright is ©.

Copyright is also a part of intellectual property along with patents and trademarks.

Patent is a set of exclusive right granted by a state or national government to an inventor or their assignee for a limited period of time in exchange for a public disclosure of an invention.

Under the Agreement on Trade-Related Aspects of Intellectual Property Rights of WTO (World Trade Organization), patents should be available in WTO member states for any inventions, in all fields of technology, and the term of protection available should be the minimum 20years.

We should respect the intellectual property since the individual was put a lot of affords to create the intellectual property. Therefore, we should avoid to buy the pirates products and buy an original products. At the same time, I hope that my interview will be success.

Prepared by,
Fong Yok Yan (1071120015)