HAAGA-HELIABUSINESS LAWCASES

Satu PitkänenForms of enterprise

FORMS OF ENTERPRISE

1. Nieminen Brothers

Kaapo, Tuomo and Väinö were the partners of Nieminen Brothers Partnership. According to the company agreement signed in March 1999, the company’s branch of business was “Timber Trade and Industry”. The agreement also included terms on the investments of the partners and division of profit and loss.

After a profitable year Väinö wanted to expand the company in the summer 2001. So he decided to buy a villa in Lapland to entertain guests of the company. He signed the trade agreement in July 2001 on behalf of the company. This worsened relations between the brothers because Kaapo and Tuomo thought that Väinö had no right to take such an act.

Väinö’s activities didn’t end here. He wanted to try new Canadian timber and started measures to obtain some of this to the company. Tuomo learned about Väinö’s plans before he had placed the order and told Väinö not to order the timber. Väinö claimed that Tuomo alone can’t prohibit him.

Väinö was so disappointed because of the “negative attitude” of his brothers that he decided to get rid of his share of the partnership. Very soon he told his brothers that he is going to sell immediately his share to Taneli Tuohinen. Also he demanded to see the bookkeeping of the company in order to control its authenticity. Kaapo said Väinö has no right to see the bookkeeping since his investment to the company was his labour instead of money. Comment the situation?

2. Oy Hilavitkutin Ab

According to the articles of association, Oy Hilavitkutin Ab has two classes of shares: one entitles to one vote and the other to ten votes. The company’s complete list of votes is as follows:

Aapeli Aho / 30 shares at 10 votes / = 300 votes
Berit Aho / 20 shares at 10 votes / = 200 votes
Cecilia Kulo / 50 shares at 1 vote / = 50 votes
Taavi Lanu / 50 shares at 1 vote / = 50 votes
Total / 150 shares / = 600 votes

a) A vote for Board members was arranged at the shareholders' meetings. Eero and Gabriel were competing for the same position. What was the outcome if Cecilia and Taavi voted for Eero and Aapeli and Berit voted for Gabriel?

b) In another shareholders’ meeting of Hilavitkutin, the partners contemplated for an amendment to the Articles of Association. Aapeli couldn't attend the meeting the meeting at all. Berit and Cecilia carried the proposal, while Taavi abstained from voting. Was the proposal accepted?