27 Jul LARRY IS INSTRUCTED BY HIS EMPLOYER HUGE LTD,
Larry is instructed by his employer Huge Ltd, to register a company which is to sell educational assistance to commerce students. Larry is to become Managing Director of the new company. Before the new company (Lifesaver Pty Ltd) is registered, Larry signs a purchase agreement on behalf of the proposed company to buy educational equipment.Lifesaver Pty Ltd is later registered and at its first directors’ meeting the ratification of Larry’s purchase is considered. The other directors consider the equipment Larry purchased is unsuitable and refuse to approve the transaction.REQUIRED:(a) How does corporate law classify the role undertaken by Larry leading up to the registration of Lifesaver Pty Ltd? What are the duties that such a person owes and to whom are they owed?(b) What is the effect on Larry, and on Lifesaver Pty Ltd, if the directors decide not to ratify Larry’s lease.
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