their right to receive cash at precisely the time that Arley's stock is low, which is also when the firm
Learning Objective 1.2 ~ discuss the different types of companies which may be formed under the Corporations Act 2001
S198A(1): The board of directors has discretion as to when and how to issue shares
To the extent of prevention of corporate failure, I argue that three ASX principles and recommendations could halt the demise of Dick Smith. Firstly, the 2nd principle which is “Structure the board to add value” by structuring the board with a majority of independent directors would prevent CEO dominance because some suggest that independent outside directors can reduce the influence of dominant individuals (ASX, 2014, p. 17). In accordance with Gallagher and Bennie (2015, p. 20), the independent directors are likely to focus on the company’s objectives and not to make decision relying on others. Furthermore, an addressing of independent directors would reduce the reliance on management, and create the effectiveness on monitoring (Dechow et al. 1996 cited in Christensen, Kent, and Stewart (2010)), as well as capability to lessen the conflict of interest between managers and shareholders (Hardjo & Alireza, 2012, p. 4). Thus, DSE’s board would be more active to monitor the CEO’s performances because independent directors pay attentions to the interest of company (Gallagher & Bennie, 2015, p. 20) and shareholders (Hardjo & Alireza, 2012, p. 4)
Based on the case scenario, Doris, Betty, and Charlie formed a company called Bechdo Pty Ltd. The three members are the directors and Betty who is major shareholder holds 40% followed by Charlie and Doris who hold 20% each while the 20% is held by the rest. Based on the company constitution, a managing director has capacity to enter into a contract o behalf of the company up to a maximum of $100,000. Moreover, he/she can enter into contracts to the value of $900,000 upon getting consent for the board of directors. In this case, Bechdo Pty Ltd operates without a managing director since none was elected. The major issue is that Betty being the majority shareholder went ahead and entered into contract with BB Ltd, Jillo Pty Ltd, and
Please note: I know the cases are longer than typical test questions, BUT the answers don’t have to be. These are like the exercises in class. I give you the context of the problem, but the answers are much shorter. Let me know if you have any questions.
Smith should have disclosed his share information with the board of directors and voted in favor of Johnsons Skyhooks Limited. Being a board of director of a competing company, he failed to execute his duty in good faith with best interest of the corporation. According to the act, he should be fined up to 5000$ and can go to jail for at least six months.
The company believes that the executives and directors should own the stocks. In order to be a stockholder,
GSG issued an ultimatum to the TideeKleen board of directors. If the Board does not adopt either of Options A or B, Goode will seek to have the directors replaced by his own nominees at the next Annual General Meeting of shareholders. In the alternative, he might seek to acquire a controlling interest in the company, take it private, and impose option A.
In this situation, there was an incident where the three board of directors have had a personal interest in company and they themselves agreed to buy shares of stock of Green Med because they believed that Cheap Pharma cannot afford to buy the share of stock
Bea may argue that there is breach of the duty to act personally. As an extension of the duty to act personally, the trustees must not act under dictation of the beneficiary (Re Brockbank) and must make decisions personally. On the facts, it may be argued that the co-trustees was acting under the dictation of Andrew as he believed that mobile phones triggered cancer and wanted the shares to be removed from the portfolio. That facts state that the phone share were performing well so it seems unbeneficial to sell. It is unlikely that the $15,000 to purchase shares in the new Australian bank constitutes any breach without further information.
* Consider Agrico Limited and the contract arranged with Telegenics Pty Ltd. What action could Agrico take against Jenny Smith or Donald Jones for breach of duty?
In 2002 the Hershey trust company board decided to sell school shares from Hershey stock. The board wanted to sell the 33% of Hershey shares at premium and reinvest the money in another company to make profit for the school. The board was responsible to oversees the investment and make sure the school was doing fine. Looking on this issue as financial personnel the board decision was better to sell stocks at premium and reinvest in another company.
In order to determine, whether the terms are validly incorporated into the contract and which dispute resolution method is appropriate for Jimmy 's case, it is essential to identify a form of offer and acceptance, the ways the contractual terms have been agreed on, the validity of the incorporation as well as elements of fraud or breach of contract. To elucidate this statement, the structure of this essay will be: