【分析解答题】

AB

C、SdnBhd is a small private limited company with five shareholders. Its directors areAli andBalu. Its objects clause states as follows:(i) to manufacture and sell biscuits;(ii) to buy and sell wooden furniture; and(iii) to carry on any other business, which in the opinion of the board of directors can be carried on with the above businesses of the company.InApril 2011,

AB

C、SdnBhd entered into a contract with XYZ SdnBhd, a steel manufacturing company, for the purchase of 90,000 kilograms of steel. The steel will be delivered to

AB

C、SdnBhd next month. The decision to purchase the steel was made byAli andBalu with the intention of making the company branch off into the manufacture of steel cabinets and other office equipment made of steel.Charles, a shareholder, believes that the contract for the purchase of the steel is outside the scope of the objects clause of

AB

C、SdnBhD、He seeks your advice in respect of this matter.Required:AdviseCharles on: (b) his rights in respect of the said contract, assuming it is ultra vires. (5 marks)