Alan, Ben, Chris and Debbie are the only shareholders in ABCD Ltd, each holding 100 ordinary £1 shares. Alan, who is the company's sole director, has recently learned that Ben, Chris and Debbie are intending to remove him as a director by passing an ordinary resolution. In consequence Alan sold his computer to the company in return for 1,000 ordinary £1 shares. The company was in need of a computer, which was of equal value to the 1,000 ordinary £1 shares.
Which of the following is correct?
- The share issue is valid and Alan may use his 1,100 votes to defeat the resolution proposed by Ben, Chris and Debbie.
- The share issue is invalid as it has had the effect of manipulating the voting structure within the company.
- The share issue is invalid as the shares should have been offered to all the existing members first.
- The share issue is valid as long as Alan has the necessary authority to issue shares.