The shareholders of Zee Ltd, a company formed to provide digital storage and data analytics, are concerned that even though the company has assets that far exceed its liabilities, they have not been paid a dividend. The directors of the company, Ross and Taylor, contend that the surplus assets are required to build up the working capital with view to expanding the company’s activities.
a) Can the shareholders take legal action to force the directors to pay a dividend?
b) If the company’s assets exceed its liabilities, and the directors intended paying all the surplus out as dividends, could the shareholders do anything to reduce or prevent the payment of these dividends?
c) One of the creditors of the company becomes concerned that Zee Ltd will become insolvent if the dividend is paid out. Can the creditor object?