Strike Ltd (‘Strike’), incorporated in 2013 - Business Law

Business Law:

Strike Ltd (‘Strike’), incorporated in 2013, is a successful fashion and street footwear manufacturer, with a share capital of 2,000,000 fully paid ordinary shares at an issue price of $1.00 per share, and 100,000 full paid preference shares at an issue price of $2.00 per share. Therese sold the original footwear business to Strike under a pre-incorporation contract in 2013 and received a cash payment plus 35% of the ordinary shares in Strike. Therese has significant influence over the Strike directors, and the board regularly invites Therese to share her footwear expertise at Board meetings. The strike does not have a constitution. Under a special resolution passed by Strike, as required by section 254A(2) Corporations Act 2001 (Cth) (‘CA’), preference shareholders receive a 9% cumulative dividend per year and have 2 votes per share on matters which directly affect preference shareholders. Otherwise, preference shareholders have 1 vote per share. In September 2017, the Board of Strike, comprising Sally, Kevin and Roger, all voted in favour of a resolution to sell the fashion footwear operation for $750,000, the settlement date for payment is 24 November 2017. This vote followed a presentation by Therese about the opportunities for Strike in focusing on street footwear in South East Asia. Therese did not vote at the board meeting but actively supported the sale. The buyer is Targhay Pty Ltd. Sally and Therese together own all of the shares in Targhay Pty Ltd. Questions: 1) Advise Strike whether the share capital and business sale transactions are valid, as well as the potential actions and remedies 2) Using the ILAC method, explain your answer