Question

Algol, Altair, Vernon, Vega, Gamma and Betelgeuse are the only shareholders and directors of Beacon Fun Stuff Pty Ltd. Algol holds 20%, Altair 60%, Vernon 5%, Vega 5%, Gamma 5% and Betelgeuse 5%. The relationship between the rest of the family and Betelgeuse breaks down and Betelgeuse has moved to the USA and is no longer actively involved in the company's management. Algol and Altair called a general meeting to be held at the family home in Hobart on the 20th August 2020. They propose to pass a resolution removing Betelgeuse from the board.

The notice of meeting was sent to Betelguese but was delayed in the post and did not reach him until two days before the meeting. At this late stage he was unable to book a plane ticket from Missouri so could not attend the meeting.

Required: Please advise Betelguese.

Answer 1

As Betelguese was not able to attend the meeting of the board of directors, he should ask the other members to reorganise the meeting where he is able to take part in the meeting.

As the decision being taken, he is also having the right to contribute to the decision.

As the other members are willing to remove Betelguese from the board, it also depends on Betelguese whether he wants to be in the company or not. In his absence if the decision is taken to remove Betelguese, then he would be receiving this news.

If Betelguese is in favour of the decision and wants to leave the company, then there is no need to raise any issue from his side, but if he wishes to continue and disagree with the decision made, he can dissent with about seven days regarding this decision. This dissent would make clear that he is not in the favour of decision and hence he will not be made to leave the company as decision of each board of directors is considered.

But if does not dissent, the decision would be considered to be in his favour as a result of which he will be made to move out of the company.

So, it all depends on Betelguese whether he wants to remain in the company or leave. And he wants to continue with the company he has the option of dissenting.

This is the advice given to Betelguese.