Applied Company Law

APPLIED COMPANY LAW
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TABLE OF CONTENTS
Question...........................................................................................................................................3
1(A) Advice Build It LTD to it potential right and liabilities against respective parties............3
Rights of Build IT ltd against its shareholders............................................................................3
Liabilities of company against its stakeholder.............................................................................3
Action that could ASIC take against the directors.......................................................................4
1(B) Right of disgruntled shareholders Mike of Build It Ltd......................................................5
REFERENCES................................................................................................................................7
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Question
1(A) Advice Build It LTD to it potential right and liabilities against respective parties
Rights of Build IT ltd against its shareholders
As per the company act 2001, it is act of commonwealth of Australia that set out legal
right and liabilities of company at federal and interstate level. Australia, company have legal
capacity and power of individuals in terms of both in and outside the jurisdiction. Likewise there
are several potential right or power that Build It LTD has is:
 Issue and cancel of share in the company.
 Distribute the company property among the member
 It also grants security interest in uncalled capital.
Company also have legal capacity to do something is it does not affect on company interest
or would not be, served by doing it. Moreover it have right to elect and select particular
shareholder of company that will invest specify amount of capital in the firm in order to earn
higher return. The Build It ltd have right to fiduciary duties provide to shareholder such as duty
of care, duty of loyalty and duty of obedience (Graham, 2020). Thus it clearly stated that Build it
Ltd will put its interest in first as compared to others. Furthermore it is right towards the parties
is to comply with all legal laws and regulation such as maintaining and protecting the personal
information of shareholders so that no harm can be caused to them. It has to call meeting of
shareholders in order to know their area of interest and problem that they are facing in recent
scenario.
Liabilities of company against its stakeholder
As per the companies act of Australia the organisation contain a liability against its
shareholder to audit the books of accounts of the organisation in the end of each financial year.
The audit is about to ensure the authenticity of the books of accounts or the financial reporting
done by the organisation. Audit is the mandatory requirement that business entity require to meet
up in against to fulfil its responsibility against the shareholder of company. This is te liability of
the organisation that the auditor holding responsibility of auditing the books of accounts and
financial records of the company must be independent in nature. It should not be connected with
the organisation in any way possible (Chen, 2017). The decision to appoint the independent
auditor must be supported by each of the director associated with the company. Shareholders are
the owner of the company and it is the responsibility of the organisation and its management to
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