Q.2
Ramsay and Janet are two directors and each 50% of shareholders of a company, the company was to be called Master plate Pty Ltd; on 22 February, Janet entered into a contract with Irish Linen Ltd to purchase 18 monogrammed tablecloths. He executed the contract in the name of Master Plate Pty Ltd.
On 24 February, the proposed company was registered. The company did not adopt a constitution. Due to dispute between Ramsay and Janet regarding the contract with Irish Linen Ltd, that contract was not ratified until 30 March.
On 1 April, Janet orders restaurant-quality cutlery from Carvers Pty Ltd. Janet affixes the company seal to the contract and signs it.
On 1 May, the tablecloths supplied by Irish Linen Ltd have been delivered to Master Plate but not paid for.
Required:
Advise Janet whether the company is liable to pay external suppliers. What the assumptions are Carvers Pty Ltd entitled to make?
Also advise Janet of the consequences for the company in not carrying on activities within its objectives.
Note: Need to answer the above questions according to Issue, Law, Analysis and Conclusion. Relevant sections for above questions are S128, S129, S180, S183 and so on.