Matthew Mark and Luke, three auto mechanics, were delighted to start an auto repair business and decided that they would incorporate a private company to do so. It was to be called  Mechanics Ltd. They were short on capital however, so they approached ABC Ltd, a public  company, to be a shareholder in their private company. John, the Company Secretary and  Accountant for Mechanics Ltd decided that he will not file accounts, because it was a private  company. John came to you privately to find out if he is on good ground in not filing accounts. 1. You are required to tell John if he was correct in his decision or not, and give reasons for your answer, directly from the Companies Act.  2. At the same time, Luke is very disgruntled that the company is planning on going into the business of selling auto parts as well, and said that this is in breach of the Memorandum  of Association's Objects Clause which states: "To repair, service and provide diagnostics  to all types of motor vehicles, and to replace the relevant parts as required". Luke comes  to you for advice.   Using relevant Case Law, advise Luke.

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Matthew Mark and Luke, three auto mechanics, were delighted to start an auto repair business
and decided that they would incorporate a private company to do so. It was to be called 
Mechanics Ltd. They were short on capital however, so they approached ABC Ltd, a public 
company, to be a shareholder in their private company. John, the Company Secretary and 
Accountant for Mechanics Ltd decided that he will not file accounts, because it was a private 
company. John came to you privately to find out if he is on good ground in not filing accounts.


1. You are required to tell John if he was correct in his decision or not, and give reasons for
your answer, directly from the Companies Act. 


2. At the same time, Luke is very disgruntled that the company is planning on going into the
business of selling auto parts as well, and said that this is in breach of the Memorandum 
of Association's Objects Clause which states: "To repair, service and provide diagnostics 
to all types of motor vehicles, and to replace the relevant parts as required". Luke comes 
to you for advice. 
 Using relevant Case Law, advise Luke. 

 

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