Mid-Semester Coursework Assignment

City University of Hong Kong School of Law LW3902 The Law Relating to Companies Mid-Semester Coursework Assignment Semester B, 2012/2013 Instructions to Students: 1. The assignment is worth 50% of the overall mark for this course. The total word limit is 1,500 words, excluding footnotes and bibliography. You must do a word count and indicate the number of words on the cover page. If a paper exceeds the allowable word limit, only the first 1,500 words will be read and marked. 2. Your answers must be double spaced, and typewritten in 12 point, Times New Roman font.Failure to comply with this format will result in a penalty of five (5) marks. 3. Indicate the course code and title, your name, student number, seminar section, and lecturer’s name on the cover page of your assignment. 4. The deadline for submission is Friday 15 March 2013 at 5 pm. Additional instructions on the submission of your coursework assignment will be provided to you on Blackboard / in class. 5. You must stri ctly adhere to the policy of City University of Hong Kong on plagiarism, which is a serious academic offence. Suspected plagiarism may be subject to disciplinary action.You may discuss your work with others, but you must provide your own answers. In case of doubt as to what amounts to plagiarism, please consult your lecturer. All coursework assignments will be reviewed on Turnitin for plagiarism and originality. 6. Any sources for your answers must be footnoted in the paper. You should cite authority (i. e. cases and/or statutes) to support your legal arguments, and these sources must be acknowledged. 7. Examples of proper citation: Case: Liu Hon Ying v Hua Xin State Enterprise (HK) Ltd [2003] 3 HKLRD 347 Statute: s. 75(1) of the Companies Ordinance (Cap 32) 8. Extension to the deadline for submitting the assignment may be granted only in exceptional circumstances. Prior to obtaining any extension to the deadline, you must first approach your lecturer well in advance with a reason a nd supporting documentation for the request. 9. Any late submissions without permission will incur a penalty of 5 marks per day. For example, for a 2-day delay, a student’s mark may be reduced from 80 marks to 70 marks. No assignment will be accepted after 22 March 2013. 1Instructions: Answer both questions. Question 1 (50%) Lee used to work as a chef at Golden Wok of Fortune, a famous dim sum restaurant in Mong Kok, Kowloon. During his employment, Lee gained a lot of experience in the art of making, preparing and serving dim sum. In particular, Lee learnt the secret ingredients for the restaurant’s special sauce, which made its dim sum items so popular. Since he was a child, Lee had dreamed of starting his own dim sum business, and after many years of dedicated service to Golden Wok of Fortune, Lee decided to leave the restaurant.However, Lee’s employment contract with the restaurant contained a non-competition clause which forbade him from setting up a competi ng dim sum business in Mong Kok within 1 year of termination of employment. It also contained a confidentiality clause which prohibited him from disclosing the ingredients of any recipes that Lee had learnt in the course of his employment. To circumvent these restrictions, Lee incorporated a catering company called Fragrant Kitchen Ltd. specializing in the preparation and sale of dim sum items for office parties and other special events.The head office of the company was based in Shatin, but had branches located in Mong Kok and Tsim Sha Tsui. Lee appointed himself CEO of the company, and was the only director and shareholder. The products of Fragrant Kitchen Ltd. were very popular because of its special sauce, which tasted suspiciously similar to that of Golden Wok. Lee also embarked on a very successful marketing campaign, with the motto: â€Å"Enjoy excellent dim sum in the comfort of your own office or home. Don’t come to us, we will come to you! Due to the attractive pri ces offered by Lee’s new company, many of Golden Wok’s previous customers stopped patronizing Golden Wok. Golden Wok has since become aware of Lee’s connection with Fragrant Kitchen, and is considering legal action against Lee. Advise Golden Wok. Question 2 (50%) Michael and Joshua, both of whom are freelance interior decorators, decided to go into business together in 1990. Michael contributed HK$500,000, a vehicle and some supplies and equipment to the business. Joshua did not contribute any money or assets, but agreed to work full time for the business.Michael and Joshua did not sign any partnership agreement. In the course of their long collaboration, Michael paid Joshua a monthly wage of HK $16, 000, and also paid himself out of the business bank account. Only Michael had signing authority on the business bank account. Joshua was very dedicated to the business and all of his customers were impressed with his decorating skills. Michael, on the other hand, pl ayed a largely managerial role in the business and left most of the decorating work to Joshua.Michael pocketed 2 all of the profit generated by Joshua’s decorating work, but re-invested some of the money in the business over the years. In 2011, Michael acquired a new office building for the business, which Joshua helped decorate and furnish. In 2013, after 23 years of working side by side, the relationship between the two men began to sour. Joshua now wishes to be acknowledged as a partner and claims to be entitled to 50% of the business’s assets. Does a partnership exist? Advise Joshua. 3