Company/Business/Partnership Law: Eleen

Eleen runs a successful bakery business in Portsmouth. She is considering expanding her business with her friend Rosy. Advise Eleen and Rosy on the following legal issues:

(1) Eleen and Rosy are unsure as to which business structure would be the most appropriate. Advise them on the advantages and disadvantages of the various business structures available to them, including ordinary partnerships, limited liability partnerships and companies. 

(2) After careful consideration, Eleen and Rosy set up E&R Bakery Ltd in 2017. Eleen and Rosy are directors of the company holding 60% and 40% of the company’s shares respectively. 

The Model Articles of Association for Private Companies Limited by Shares have been adopted. The Articles of E&R Bakery Ltd also include an additional clause which states that ‘Rosy would be company director for ten years’. Advise Rosy whether she can rely on this clause and remain as the company director for the next ten years. 

Your answer must be supported by statutes and case law. 

You should also use the “ILAC” technique.

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