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Question 2 (18 marks) Rachel is the sole executive director in a small local limited liability...

Question 2

Rachel is the sole executive director in a small local limited liability company Splendid Kitchen Limited that sells all sorts of electric appliances. Elisa, the only supervisor of Splendid Kitchen Limited, was informed by Daisy, who held 5% of equity interest in the company, that Rachel had been engaged in a similar business competing with Splendid Kitchen Limited for a while.

Required:

  1. Based on relevant legal authorities, discuss whether Daisy can bring an action against Rachel and her possible concerns, if any.

                                                                                                                            

  1. It was found that Rachel and Ally (Rachel’s sister) had incorporated a company Wonderful Goods Limited two years ago, and each held 50% of equity interest in this limited liability company. Upon Elisa’s further investigation, it was found that there was a transaction concluded between Wonderful Goods Limited and Splendid Kitchen Limited. There was no record indicating that Rachel had disclosed her interest when the relevant resolution was put forwarded for discussion in the shareholders’ general meeting.

Critically analyze, by citing relevant legal authorities, on whether Rachel breached her duty as director, and the associated consequence, if any.

                                                                        

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