Company Law case Essay Example | Topics and Well Written Essays - 2000 words

Company Law case - Essay ExampleIn addition, a promoter is also expected to disclose any secret profits that he may have make in the process of promoting the companion. This is illustrated in the case of Erlanger V New Sombrero Phosphates company control (1878)2.In this case,Syndicate Erlanger purchased an island that was rich in phosphates at a price of 55,000 pounds he later promoted a company and sold the sand island to the company he formed at 110,000 pounds which later failed. During the formation of the company, two of the directors were oversea while the rest had been nominated by Erlanger himself. When new directors took over the company, they filed a motion to rescind Erlanger. The greet held that no proper disclosure on the sale was made and for this reason the company had a by rights to rescind the contract.Ricky is the individual who put everything together and saw to Rickys footwear becoming a level-headed company and is therefore the promoter of the company. He so ld premises and stock and assets from his former business and made huge profits from the sales. The fiduciary duties that he owes the company would dictate that he discloses these profits. He however did non disclose them to either the members of an independent board or to all the new owners of the company as per the prospectus as was expected of him. For this reason, Rickys footwear limited has a legal claim against its promoter for do secret profits which is a breach of his obligations and it is therefore advisable that they pursue the matter in the germane(predicate) court of law. However, the company would not have had a case against Ricky had he disclosed the profits.In the causa that Rickys footwear limited decides to file a motion against Ricky there are certain executable remedies that are available to the company at law should the court rule in their favor. These are to a lower place this remedy, the contract in question is reverted and relevant efforts are made