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

Company Law case - Essay ExampleIn addition, a promoter is likewise expected to disclose any secret profits that he may have made in the process of promoting the companionship. This is illustrated in the case of Erlanger V raw Sombrero Phosphates company limited (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 abroad while the rest had been nominated by Erlanger himself. When new directors took over the company, they filed a foreland to rescind Erlanger. The court held that no proper disclosure on the sale was made and for this reason the company had a right to rescind the contract.Ricky is the individual who rig everything together and saw to Rickys footwear becoming a legal company and is therefore the promoter of the company. He sold premises and stock and assets from his originator 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 not disclose them to either the members of an strong-minded 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 involve against its promoter for making secret profits which is a breach of his obligations and it is therefore advisable that they pursue the matter in the relevant court of law. However, the company would not have had a case against Ricky had he disclosed the profits.In the event that Rickys footwear limited decides to file a motion against Ricky there atomic number 18 certain possible remedies that are available to the company at law should the court rule in their favor. These areUnder this remedy, the contract in question is reverted and relevant efforts are made