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Prepare a memorandum giving advice onwhether the Company can take any action against its former director Michael Rowlands for breach of his directors’ duties, and if so, which duty.
Please give all statutory/case law references as a footnote to the memorandum.
LLB BUSINESS 1 ASSESSMENT (Level 5)
Submission Deadline: 26 May 2023 16:30 (UK TIME)
On sitting this Assessment you will be deemed to have completed the following
declaration:
I certify that the assessment submission is entirely my work, and I have fully
referenced and correctly cited the work of others, where required. I also confirm the
contents of my submission have not been generated by a third party, or through an
Artificial Intelligence generative system.
I have read the Student Discipline Regulations and understand any Assessment
Related offence / Academic Misconduct can lead to consequences.
By submitting this assessment submission, I am confirming that I am fit to sit
according to the Assessment Regulations.
ASSESSMENT INSTRUCTIONS
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You must produce your assessment answer in Word.
Your answer must not exceed 2,000 words. Words in excess of the limit will not
be marked.
State your word count at the end of your answer.
Type your candidate number on each page of your answer.
Save your coursework with the file name: candidate number_Business 1
Follow the submission instructions as set out in your Module Assessment
Student Instructions.
LEARNING OUTCOMES
For this Assessment you will be assessed against the following Learning Outcomes:
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LB464
Demonstrate a sound knowledge and critical understanding of the wellestablished legal principles relating to the creating and running of the different
forms of organisation used to conduct businesses in England and Wales.
Locate, comprehend, analyse and use cases, statutes and secondary sources
relevant to business law.
Analyse the facts of complex problems to identify relevant legal issues.
Accurately apply the underlying concepts and principles of business
organisations in new contexts, including, where appropriate, the application of
those principles in wider contexts.
Identify and evaluate a range of solutions taking into account the relevant legal,
financial, commercial and practical considerations and, where necessary,
present reasoned advice to the client.
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Interpret legal documents creating business organisations and regulating their
activities and relate their contents to the underlying legal principles.
Effectively communicate information, arguments and analysis relevant to
business organisations in a clear and structured manner.
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© The University of Law Limited 2022-2023
ASSESSMENT QUESTIONS (100 MARKS)
PART A
You are A.Trainee at NewLaw LLP. You have received the following email from your
supervisor. Please read this and Document A and the Company Search reports in
Document B
Prepare a memorandum giving advice on whether the Company can take any
action against its former director Michael Rowlands for breach of his directors’
duties, and if so, which duty.
Please give all statutory/case law references as a footnote to the memorandum.
To: A.Trainee@NewLaw.com
From: Sarauniya.Supervisor@NewLaw.com
Subject: HiveLog Ltd dispute with director Michael Rowlands
Ref: SS/1234
Date: [ ]
Dear Trainee
I met with Mani Raja, an authorised representative of a new client HiveLog Ltd (Hive)
yesterday. I attach my note of the meeting (Document A). Please research the issues
as a matter of urgency and draft a memorandum of advice as to whether Hive can take
any action against its former director Michael Rowlands for breach of his directors’
duties and, if so, which duty.
Please ensure that you cite the law, give all statutory/case law references as a footnote
to the memorandum as I will put your memo on the training file.
Many thanks
Sarauniya Supervisor
Associate Solicitor
NewLaw LLP
Sarauniya.Supervisor@NewLaw.com
Continued
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© The University of Law Limited 2022-2023
PART B
This is a continuation of the facts in part A. Assume today is Monday 8th May
2023
After an extensive recruitment drive Hive has now found a new technology director to
replace Michael, namely Dr James Gray, an expert in technology and all forms of data
mining, data extraction and analysis. He is to be appointed as Director of Technology
and Development and granted a three-year fixed term service contract; he is available
to start immediately.
Hive wants to appoint him as a director and grant the service contract at the same time
and as quickly as possible and before Mani goes away on holiday on Saturday 13 th
May. The proposed terms of the contract are now agreed in principle with Dr Gray, so
the service contract can be finalised very quickly ready for all parties to sign and date.
Do note that the service contract will contain a power of attorney clause in respect of
various matters which means the contract needs to be signed as a deed by Hive.
Mani has called a board meeting for Wednesday 10th May and wants the appointment
and the grant of the service contract to be concluded on Wednesday. All the board are
able to be present at the board meeting. Surinder Gill a representative from Ellis Private
Equity Ltd (EPE) with authority to act for EPE is also in the office on Wednesday in
relation to other issues but can be available if needed to do anything in relation to the
appointment and granting of the service contract. All directors and shareholders are in
agreement about the appointment and the proposed terms of the service contract. Dr
Gray has also been invited to the office on Wednesday and will be standing by to sign
his service contract.
Please advise:
1. Which resolutions will be required to appoint Dr Gray and award the
service contract? Please ensure you give any board and shareholder
resolutions.
2. If shareholder resolutions are needed to appoint Dr Gray and award the
service contract which shareholder procedure should be followed to
propose the resolutions to shareholders? Please explain the rationale for
your choice.
3. Please briefly explain the procedure you have chosen above at 2, the
voting requirements, and whether the resolutions will pass.
4. Please explain how the service contract will be executed.
There is no need to give a full chronological procedure plan, you are not required
to detail any internal or external filing needed.
Continued
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© The University of Law Limited 2022-2023
PART C
This is a continuation of the facts in parts A and B . It is one year later.
Dr Gray on behalf of Hive is working with another company Link Ltd,( its
representative on the project is Viktor Laszio) and an entrepreneur Anika Sharma
(Anika) on a business project to develop new blockchain technology.
No agreement was ever signed in relation to the project, but the parties have
nevertheless been working together to develop the project. The parties are working
together on the following terms:
1. They have agreed to combine their know-how and expertise to develop,
produce and distribute the new technology. Some of the technology is already
at testing stage.
2. Each legal person has its own area of responsibility in respect of the
development of the products. Anika made a considerable capital contribution
at the outset and Dr Gray on behalf of Hive has contributed know-how in the
early stages of development and is key in terms of research and development,
Link Ltd ‘s particular expertise will only be required in the later phases of
development, but Link Ltd is included in all discussions and has contributed
capital. Hive has not contributed capital, but when working on the project they
all work from a building provided by Hive.
3. Dr Gray as a representative of Hive and Viktor Laszio a representative from
Link Ltd and Anika meet on a monthly basis to discuss progress and to take
decisions affecting future development strategy.
4. The parties propose to share equally any profits or losses of the project which
may arise as a result of the production and sale of the products, or the
sale/licensing of any intellectual property that may arise from the development
of the technology.
Mani as CEO of Hive is excited about the project but is concerned about the fact
that no agreement was drawn up and has sought your advice, although they
never intended more than a contractual relationship Mani is concerned that they
may have inadvertently created a partnership.
Please advise as to whether Hive has entered into a partnership with Anika
Sharma and Link Ltd to develop and sell this technology.
Total 100 marks
Continued- Documents A and B attached
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© The University of Law Limited 2022-2023
DOCUMENT A
(For use in Parts A and B)
File note
Client- HiveLog Ltd
Matter- Action against Michael Rowlands
Date- [ ]
Time spent -60 minutes
Ref SS/1234
Mani Raja (Mani) is the CEO of HiveLog Ltd (Hive). Hive is a data analytics company
that has contracts within the retail grocery sector to analyse the retailers’ data to help
them target products and customers and to help the retailers understand sales
tendencies and to generally improve marketing. Mani wants to know whether Michael
Rowlands (Michael), has breached any of his directors’ duties. Michael was the
executive director in charge of technology at Hive and he left Hive one month ago.
Hive presently has three directors and four shareholders. A company search report is
attached (Document B). Hive is a fairly new company but is doing quite well and is
hoping to expand in time, but not quite at the moment as cash flow is sometimes a little
difficult and Hive wants to consolidate its position before branching out into new areas.
Last week at a conference for the data industry in Coventry, Mani was talking to a
director, Helen Ma (Helen), from another company OneTech Ltd, (Tech) about
technology issues in general. He found out that Helen met Michael at a mutual friends’
wedding about 3 months’ ago. She talked to Michael about some exciting new
technology that Tech had developed. She knows Michael well as they went to
university together. She knew he was head of technology at Hive and thought Hive
might be interested in the new technology developed by Tech specific to the insurance
industry. This software could assist Hive to expand into the insurance industry to
analyse data to enable insurance companies to identify sets of customers who typically
have high annual claims so that the insurance companies can price their insurance
policies more effectively. Helen thought it might be a good match for Hive as many of
the big grocery retailers do have insurance subsidiaries, such as pet insurance , car
insurance etc. However Michael told her that Hive would not be interested as the board
of Hive are not wanting to diversify at present, but that he personally was interested in
acquiring the technology.
Three months ago Michael gave 2 month’s notice as required under his directors’
service contract, his contract did not contain any restrictive covenants preventing him
from setting up in a competing business, and he left Hive a month ago. He told the
board he was leaving because of ill -health concerns. After speaking to Helen last week
Mani now has found out that Michael recently has set up in business on his own, had
purchased the software from Tech a few weeks ago and has just acquired a very
lucrative £500,000 contract with a major insurance company.
Mani is concerned as although Hive had not been considering diversifying it was
certainly something they would have considered very seriously, and he feels that
Michael should have presented the opportunity from Tech to the board of Hive for
consideration rather than take it up personally.
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© The University of Law Limited 2022-2023
DOCUMENT B
(For use in Part B)
HiveLog Ltd
SUMMARY FROM COMPANY SEARCH
Company
incorporated
Auditors
Articles of
Association
12th January 2020
Registered Office- unit 4,
Highfield Industrial Estate,
Newcastle NS123 678.
Company number 897656234
Buckley LLP
Model Articles (unamended)
Name
Shareholders
Number of £1 ordinary shares
Mani Raja
2,200
600 (fully paid)
Ellis Private Equity
Ltd (EPP)
John Briggs
Zoe Wang
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Directors
1200 (fully paid)
Chief Executive Officer
/Chair
N/A
Corporate representative
Surinder Gill
200 (fully paid)
200 (fully paid)
Sales Director
Finance Director
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© The University of Law Limited 2022-2023
