Legal Question in Business Law in California

Angel, Leena, Joe and Lee incorporated a company in 2000 called Shiny Stars Sdn. Bhd. They hold all shares in the company, each contributing $200,000 to the initial capital. In return, each of them was issued 200 shares. Last year, Angel gave an unsecured personal loan of $500,000 to the company as it was facing financial distress.

Last week, Leena, Joe and Lee passed a resolution to wind up the company. The company has no other creditors apart of Angel. It is now estimated that the value of the assets worth $400,000. Angel contends that the amount $400,000 should be returned to her as the company has yet to pay her money. She is also of the view that the shortfall of $100,000 is to be personally repaid by all four shareholders in equal proportions.

Meanwhile, Leena, Joe and Lee argue that the amount of 400K should be returned to the four shareholders in equal proportions. They are of the view that the company is not legally obliged to repay the debt owed to Angel as the loan was given to the company in her capacity as a shareholder.

Required:

analyse the legal implication(s) in the above situation.


Asked on 1/11/13, 5:43 am

4 Answers from Attorneys
Kelvin Green The Law Office of Kelvin Green

At the point if sounding too sarcastic.. Nice try ... But I dont think you will get help with homework...

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Answered on 1/11/13, 7:33 am
Anthony Roach Law Office of Anthony A. Roach

This forum is not the place for assisting students with law homework.

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Answered on 1/11/13, 8:16 am
Edward Hoffman Law Offices of Edward A. Hoffman

You're supposed to be learning this material so you can answer the question yourself. Asking us to answer it for you is cheating.

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Answered on 1/11/13, 11:31 am

The legal implications of trying to cheat on your homework is that the State Bar may find you morally unfit to practice even if you ace the Bar Exam. . . . uh, but of course you won't ace the Bar Exam if you cheat at school, so I guess it doesn't matter.

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Answered on 1/11/13, 11:36 am


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