Analysis of Board and Shareholder Power in Corporate Law: A Case Study of Waldmart Ltd

VICTORIA UNIVERSITY
COLLEGE OF LAW AND
JUSTICE
SCHOOL OF LAW
BLO 2205 CORPORATE LAW
ASSIGNMENT

Table of Contents
Introduction................................................................................................................................3
Part A.........................................................................................................................................3
Part B..........................................................................................................................................4
Part C..........................................................................................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8

INTRODUCTION
Board of directors are authorized to exercise all the power of company provided the same are
specifically reserved for the members as per the company’s constitution or the Corporations
Act 20011. Present report revolves around the analysis of power available to board relating to
the issue of shares and the right or power available in hand of shareholders in order to compel
the board of Wald mart from bonus issue as well as enhancing the dividend in case the same
is unwise commercially. The report comprises provision relating to the specified situation to
create a base of the decision made. Further, the power available to the shareholder to compel
the decision of Board has also been discussed.
PART A
Sections 124(1) (a) of Corporation Act 2001 provides that a company can issue as well as
cancel the shares2. Further, power comprises the right to issue bonus shares, preference shares
comprising of redeemable preference shares as well as partially paid shares. The organisation
can determine the conditions related to the issue of shares along with its price as per
provision specified in section 254 B of Corporation Act 20003. Moreover, shares could be
issued for a non-cash deliberation. At the same time, an organisation cannot issue bearer
shares, stock or change shares into stock. Mainly the power is enjoyed by the director.
According to the constitution of the corporation or by an edict, shareholders have the right to
take part in the decision making of organization4. Furthermore, shareholders hold many
statutory securities and rights accessible to them, without taking into consideration the
number of shares they embrace5. The same will consist, the capability of appealing to the
court for orders in cases when organization is running in unjustifiable prejudicial to an
associate or opposite to the interest of the members as a whole.
The provision relating to passing a resolution against a decision made by BOD:
Minimum 100 members who are entitled to vote at a general conference or who mutually
holds at least 5% of votes that are entitled to be cast at a general conference could draft notice
1 Crosling G M, Murphy H M, How to Study Business Law 4th Edition, Butterworths, 2009.
2 Redmond, P., Companies and Securities Law - Commentary and Materials, Law Book Co., Sydney, 5th, 2009.
3 Tomasic, R. Bottomley,S. McQueen,R. Corporations Law in Australia, 2nd Edition Federation Press, Sydney
2002.
4 Harris J, Corporations Law, LexisNexis Study Guide 1st edition 2008
5 Vermeesch,R B, Lindgren, K E, Business Law of Australia Butterworths, 12th Edition, 2011.