Tanah Baru Sdn Bhd is a private limited company whose sole object is the manufacture of office furniture.Recently, the board of directors decided to expand its business to venture into ostrich farming. Pursuant to this decision the company purchased and obtained delivery of 2,000 ostriches from Ostry Sdn Bhd at a cost of RM 1 million. They are contemplating purchasing another 2,000 ostriches in two months’ time.Madeline, a member of Tanah Baru Sdn Bhd, is completely opposed to the idea of ostrich farming as it is outside the scope of the objects of the company.Required:Advise Madeline on the following:
(a) whether the contract of Tanah Baru Bhd to purchase ostriches from Ostry Sdn Bhd can be challenged on the ground that it is outside the objects clause of the company and she could have the transaction set aside; (4 marks)
