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Solution Library
Converting a Sports Club Into a Company
Question
The Melbourne Ruffians Inc is a football club which wishes to change its club into a more business like format in order to facilitate some business deals. The club wants the members to become shareholders under a program whereby existing members will receive a number of shares. It is intended that the shares will be traded publicly.
A prospectus has been prepared for the members which states all the advantages of forming a new company. However a number of members are unhappy with the change in format and believe that the committee has not been particularly open about the expenses involved and all the implications for the members.
a) What rights might the members have regarding the prospectus?
b) How many types of company might the club consider? Explain.
c) Are there any disadvantages in changing the legal status (format) of the football club? Explain.
Summary
The question belongs to Law and it discusses about a sports club being converted into a public limited company. As per the conversion, the existing members will receive number of shares. But, some members are not happy with the development. The options open for the club for company conversion have been discussed in the solution in detail.
Total Word Count 104
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Comments
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