Assignment task:
I need a bibliography for this answer
Issue:
Given that the company's directors did not have the authority to enter into contracts with a value greater than one million euros without the approval of the shareholders in a general meeting, the question that needs to be answered in this case is whether or not the loan agreement and the contract to purchase goods that Eric entered into on behalf of Appleinc ltd are enforceable. In addition, the question that needs to be answered is whether or not the resolution that was voted on and approved by the shareholders to limit the dividend for the current year can actually be enforced.
Law:
The Companies Act of 2014 is the piece of legislation that provides the legal framework for a company's ability and authorization to enter into contracts. According to Section 78 of the Act, a corporation has the ability to enter into contracts, and the board of directors is the body that is responsible for exercising this authority. However, the authority of the board of directors is subject to the constitution of the company, which may restrict the board's powers or demand the permission of the shareholders in a general meeting. In any case, the authority of the board is subject to the constitution.
In accordance with Section 160 of the Companies Act 2014, a resolution that is approved by the company's shareholders at a general meeting is legally binding on the company as a whole as well as on its directors, who are required to take action in line with the resolution.
Application:
In this instance, the shareholders of Appleinc ltd are required under the company's constitution to give their consent in a general meeting for any contracts that are worth more than one million euros before the firm is allowed to enter into such contracts. The loan agreement that was entered into with AIBC plc was for a sum of two million euros, which is greater than the limit that is specified in the constitution of the firm. As a result, the board of directors did not have the power to engage into the loan agreement without first gaining the consent of the shareholders in a meeting of the entire group. As a direct consequence of this, the loan arrangement might not be enforceable against Apple Inc. Ltd.
In a similar fashion, Eric, who is not a director but has substantial influence and control over the other employees, entered into a contract to purchase items for Appleinc Ltd. for a total price of €1,500,000 without first seeking the consent of the shareholders in a general meeting. The directors did not have the right to engage into the contract since the threshold for the contract that was defined in the company's constitution was exceeded by the amount of the contract. Because of this, it is possible that Appleinc ltd will not be able to be legally bound by the contract.
Explanation
The company and its directors are required to abide by the resolution that was approved by the shareholders and that places limitations on the amount of dividends that can be paid out during the current fiscal year. As a result, the directors of Apple Inc. Limited are obligated to comply with the resolution that was approved by the shareholders, and the shareholders have the right to receive a weekly sum for each week that the dividend is unpaid.
Conclusion:
In conclusion, due to Eric's lack of authorization, the loan agreement and the contract to acquire products that he signed into on behalf of Appleinc ltd may not be enforceable. The company and its directors are required to adhere to the resolution that the shareholders approved to limit the dividend for the current fiscal year. In addition, the shareholders have the right to receive a weekly payment for each week that the dividend remains unpaid. It is imperative that the board of directors of Apple Inc. take the required actions to guarantee that they will comply with the resolution that was approved by the shareholders in order to prevent any further legal action.