1. To identify the legal issues involved in the scenario;
2. To discuss these issues in reference to English Law, and
3. To determine to what extent these issues are legal.
Happiness plc is a public limited company operating in the UK and it has more than thousand shareholders. Mr. Smith is a chairperson of the company, who along with other 6 directors constitutes the Board of Directors. Mr. Smith has already been in his position for 6 years and has strong willingness to contribute to the development of the company in the future too. Happiness plc, a successful manufacturer of baby clothes, has been experiencing financial difficulties over the past several years. In order to overcome the financial difficulties and enhance the financial soundness of the company, Mr. Smith developed an action plan, which contained a number of immediate measures to be taken. For the plan to be effective, the approval of shareholders was needed. In the aspiration to get the approval of shareholders of the developed plan, Mr. Smith decided himself to call an extraordinary general meeting of shareholders. In order not to lose time calling over thousand shareholders to the meeting, Mr. Smith gave the list containing the names of 100 shareholders to his secretary and told her to send notifications to these shareholders inviting them to the meeting, which would take place in three days. Believing that it would be best to introduce the agenda of the meeting on the first day of the meeting, Mr. Smith instructed his secretary not to mention any matters included in the agenda when sending the notifications. Particularly, Mr. Smith wanted to make changes into the Articles of Association to broaden the powers of directors in order to give them enough powers to rescue the company at such a difficult time. Moreover, he wanted to dismiss the other 6 members of the Board and extend his own term of office until his death. Considering the heavy workload and high level of responsibility, Mr. Smith wanted the shareholders to approve the three-time increase of his remuneration.
