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QUESTION: Julian, Claire and Mario are the three directors of a company called JCM Pty Ltd. The company runs an internet cafe in the city. The company has been renting a building in the city since 2012. The company has created its own constitution. The rent has become very expensive and the company directors are contemplating buying a building. The directors therefore resolve at a board meeting that the following will take place: 1. A purchase of a building for $1.8m in the city, 2.J ulian and Mario are authorized to sign the contract of purchase under seal. The constitution of the company states that any loans from a Bank must be approved by the shareholders in general meeting. Claire is asked by the other 2 directors to go to the bank to arrange the finance and negotiates the terms of the loan. The loan is not approved by the shareholders in general meeting. Jorgen a shareholder of the company finds out about this and is not happy that the company is committed to such a large loan.
Question 1: Advise Jorgen what he can do about the loan?
Question 2: Why would Jorgen be concerned about the loan being taken out by the company?
Please follow how the activity questions are answered on this website: https://www.dlsweb.rmit.edu.au/bus/public/company_law/writing.html
Attached file is the relevant lecture side to these questions.
Word count is 500 words.
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