Archie Hill runs a successful business selling high volume jewelry as a company. The company has been running the business for the last 10 years. However, with the increase in cheap imports it is becoming harder and harder for the company to make a profit. He thinks the company needs to expand and diversify its activities.  As the director he thinks it consider investing in property and starting up a childcare center. If the company expands its activities the company will need other shareholders. However, he does not want the other shareholders to out vote him at annual general meetings.   REQUIRED: Advise Archie whether all the same activities should be run under the one company structure or separate companies and why or why not? Advise Archie of what percentage of the shares he should maintain in the company and why?

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Archie Hill runs a successful business selling high volume jewelry as a company. The company has been running the business for the last 10 years.

However, with the increase in cheap imports it is becoming harder and harder for the company to make a profit.

He thinks the company needs to expand and diversify its activities.  As the director he thinks it consider investing in property and starting up a childcare center.

If the company expands its activities the company will need other shareholders. However, he does not want the other shareholders to out vote him at annual general meetings.

 

REQUIRED:

  1. Advise Archie whether all the same activities should be run under the one company structure or separate companies and why or why not?
  2. Advise Archie of what percentage of the shares he should maintain in the company and why?
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