Assignment on Law of Business Organization

Added on - 28 May 2020

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Running Head: LAW OF BUSINESS ORGANIZATIONLaw of business organizationName of the Student:Name of the University:Author Note
1LAW OF BUSINESS ORGANIZATIONTable of ContentsAnswer One: The corporate legal issues facing Rio Tinto Limited in Australia............................................2Answer Two: Avenues open to the law authorities and Directors..............................................................3Answer Three: Relevant Case.....................................................................................................................4Reference List:.............................................................................................................................................6
2LAW OF BUSINESS ORGANIZATIONAnswer One: The corporate legal issues facing Rio Tinto Limited in AustraliaAccording to section 180 of the Corporations Act 2001 it can be said that the directorsand officers of a company has to exercise their powers with due care and diligence whiledischarging their duties (Corporations Act, 2001). The duty of the director or the officer wouldbe assessed from the point of view of a reasonable person. The exercise of power by the directoror officer of a company would be considered to be without due care and diligence if it isestablished that a reasonable man acting as a director in his position would not have done thesame in the given circumstance. However, to assess the same it is necessary to hypotheticallyplace a reasonable person in the same position as a director. According to subsection 180(2) it isessential the decision taken and the powers exercised by the directors or officers of a companymust be in good faith. Any of the powers exercised by the director or officers of a companycannot be in self interest of such director and officer. It is to be mentioned that according tosubsection 180(2d) of the aforementioned act, powers exercised by the director or officer mustbe in the belief that such exercise of power would be in the best interest of the company.In this case the former executives of the mining giant Rio Tinto, Tom Albanese and GuyElliot have been charged with fraud by the U.S authorities (ABC News, 2018).They are accusedof not following the accounting standards and concealing the losses suffered. It can be said thatthe aforementioned parties concealed from the investors about the loss suffered due to theunsuccessful deal which happened under the watch of the aforementioned parties. Therefore itcan be said that the corporate legal issues faced by the officers of Rio Tinto are failure to act withdue care and diligently. It can also be said that they had not taken due care to act in good faithand did not act in the best interests of the company. Therefore they failed to comply with the
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