Joyce has been acting as managing director of Organics ltd for two years, although she has never been properly appointed a director of the company. The company has an objects clause which states that “the company shall manufacture and sell organic products”. Its articles of association state that the remuneration of any director shall be settled by the company's shareholders n general meeting, by ordinary resolution.
Sales of the c company's products have declined in recent months and Joyce decides drastic action is needed. She agrees with Bio Technics Ltd to manufacture a range of non-organic, genetically modified products for them. The contract is initially six months, but Joyce expects to renew it when it expires. It is also decided that jack , a non – executive director of the company, should take on a full time position as a sales director to explore the opportunities for selling other non organic , products. Joyce decides the company will give jack a 3 year employment contract, at Kshs. 100000 per month, which jack accepts.
Mike a minority share holder in Organics, has just discovered the forgoing. He seeks your advice on the legality of the salary payable to jack, and the contract with Bio Technics Ltd.
Analyzing the applicable principles of law, advice Mike

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