Question No: 1 The given case deals with the directors’ actions in relation to issuing shares for

Issue: Have the directors of the company breached their duties mainly related to the company’s insolvent trading.

Can the company do this? Advise the company what it must do before issuing the new class of shares. You do not need to consider Chapter 6D of the Act or directors ' duties.

S198A(1): The board of directors has discretion as to when and how to issue shares

In many misfeasance cases against directors, those breaches maybe relatively uncontroversial. This draws into focus the question of whether the director has any common law or statutory defence, including the Duomatic principle and ratification by shareholders (CA 2006 S.239), available to a claim against him for restitution to the company. S.239(6)(a) preserves the Duomatic rule that if an informal unanimous consent is reached among voting shareholders, it is unnecessary to pass such ratification resolution through general meeting or written resolution. The first part will examine the scope and requirements of this rule to illustrate the validity of such assent. S.239(7) leaves the door open for rules of law, which refers to common law principles, to continue guiding ratification. It will be assessed how these rules impose limitations on the general ratification power conferred by s.239.

According to the pro and contra Section 203D and 203E of the Corporations Act as above, most judges and scholars agree that the procedure of removal directors as stipulated in the Corporations Act provides fairness treatment for the directors who may be removed. However, they still strongly argue whether the Section 203D is mandatory or not. Moreover, they questioned the existence of Section 203E since it eliminates flexibility for companies to make decision particularly in the emergency situation as explained above. Therefore, in order to provide broader perspectives about the relevancy of Section 203D and Section 203E, it is necessary to compare the procedure of removal directors in the Australian legislation with the

The Company’s managing directors; Jodee Rich and Richard Keeling made wrong strategies and failed to exercise their duties properly, in accordance to the section 180 of Corporation Act 2001. They failed to manage company effectively and thus did not succeed

This case is related to the duties of directors of a company. The duties breached by them in a non-profit entity. This action brought by the ASIC( Australian securities and Investment Commission) towards non-executive chairman, the chief executive officer, the chief financial officer, and five other non-executive officers of the Centro Properties Limited.

The majority in Gambotto held that an expropriation to secure taxation and administration advantages was not a proper purpose, as it does not protect the company from harm – rather, it results in a gain to the majority. In application to this matter, we suggest that it is distinctly unlikely that this alteration will be considered to have been for a proper purpose. The alteration penalises Alfred’s non-attendance at director’s meetings when this is not, in all actuality, one of his duties as a director. Therefore, the amendment is not likely to meet the requirement of avoiding significant detriment to the company based solely on the issue of Alfred’s attendance.

Directors’ duties power for engaging phoenix activities are regulated by ASIC and companies’ liquidators under s 180-184 of Corporation Act. For example, Somerville’s case illustrates the eight directors have acted in breach of ss181 (1), 182(1) and 183(1) of the Corporations Act caused by the fraudulent phoenix activities. When directors breach their duties recklessly or intentional dishonesty, heavy consequences will occur which involve up to AU$220 000 penalties, five years imprisonment or

Andrew, a director as defined by section 9 , was the Chief Financial Officer and also an Executive Director, so he owes legal responsibilities to Century Insurance Ltd under common law, fiduciary duties and statute law. These responsibilities include duties to exercise care, skill and diligence, to act in good faith and for a proper purpose, and to avoid conflicts of interest and disclosure. This essay will determine whether Andrew has breached fiduciary and statute duties when he prepared and signed off on the financial reports. This essay will also discuss possible defences and the potential legal responsibilities for Andrew as well as available remedies for Century Insurance Ltd.

While shareholders’ agreements take away the directors’ discretions across a range of important matters, investors still claim to value the right to appoint a director. They actively encourage close relationships and communication between shareholders, directors and management. In fact, the size of many boards is determined by the maximum size of the shareholding that can be attracted without director representation. This frequently results in shareholdings of 5 to 7% appointing a director and, in combination with independent chairman, can produce boards of 15 or more directors.

The reason that outsiders have no right to enforce under any provision in the company’s articles because these are ordinary and extrinsic contract which includes people who are very well-involved in the operation of a company such as a director or those upon whom rights are conferred by the provisions. However, in the considered example, the claimant is a not just a director but is also a member. As such, s.33 expressly gives him a right to rely upon the provisions of the company’s articles with a view to have them enforced. This is favorable by the common law in the case of Pender v. Lunshington, which is an authority for the position that a shareholder can successfully sue the company to have a provision of the memorandum enforced. In the interest of full disclosure, this principle works both ways as the company would be entitled to sue the claimant in the pursuit of enforcing a provision in the articles. This principle is firmly entrenched by the lead authority of Hickman v. Kent and Romney Marsh Sheep Breeders.

The middle of the 19th century, it was thought to be an unexceptional practice if a company’s purchase of its own shares back. However, the point of view against the continued existence of the power began to grow in force after the advancement of the model of limited liability. The ruling out on share repurchases was as a final point added into the common law in Trevor v Whithworth. The prevention was afterward enacted in companies’ legislation in England and subsequently in the different Commonwealth countries, as well as Australia. The Act integrated two requirements of particular consideration to the Lords. Firstly, there was a condition that the company should give its nominal capital. Secondly, the legislation provided for an all-inclusive practice for reducing capital and the assets of the company.

There is no clear framework of the rules that would cover the contingencies of a ruling to pierce the corporate veil Idoport Pty Ltd v National Australia Bank Ltd. The corporate Veil usually protects owners and shareholders from being held liable for corporate duties. Yet again a decision made by the court to lift that veil and would place the liability on shareholders, owners, administrators, executives and officers of the company without ownership interest. The purpose of this essay is to conduct an analysis on the concept of lifting the corporate veil and to review the different views on its fairness and equitability to present a better understanding of the notion, the methods used was throughout researching the numerous scholars views on the subject, case law and statutes examples, and the evidence provided by the empirical study of Ramsay & Noakes. When we discuss the lifting the corporate veil the first case that pops out is the case of Salomon V A. Salomon & Co Ltd, since the decisions of applying the corporate veil were first formed as a consequence of this case. The idea covers all of company law and distinguishes that a company is a separate legal entity from its members and directors. Furthermore, spencer (2012); have indicated that one of the core principles that followed the decision in Salomon v Salomon was the wide acceptance one man company’s. However In order to form a

Indian law imposes both civil as well as criminal liability on corporations. Criminal liability, was earlier not associated with corporates due to the absence of mens rea and Indian Courts were of the view that corporations could not be criminally prosecuted. However the case of Standard Chartered Bank and Ors. vs Directorate of Enforcement [(2005) 4 SCC 530] held that corporations are liable for criminal offenses and can be prosecuted and punished, at least with fines and settled the position of law regarding the criminal liability of a corporation. Further, the newly enacted Companies Act, 2013 (“Companies Act”) has not only expanded the definition of “officer in default” but also enlarged the corporate governance requirements. The Companies Act has also amplified the circumstances under which, if the obligations cast on the corporation are not complied with, the company and its officer in default could either be fined or imprisoned. There are other prevalent statutes such as the Environment Protection Act, 1986, the Industrial Disputes Act, 1947, Water (Prevention and Control Pollution) Act, 1974 which lay down provisions and circumstances under which companies can be prosecuted. Under these statutes, when a ‘person’ committing an offence is a company, or other body corporate, every officer or person concerned with or in charge of the management shall, unless he proves that the offence was committed without his knowledge or consent, be deemed to be guilty of