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Business and Corporate Law : Assignment

   

Added on  2021-06-17

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ASIC v Rich [2009] NSWSC 1229Running Head: BUSINESS AND CORPORATION LAW 0C o r p o r a t i o n L a w2/2018Student’s Name
Business and Corporate Law : Assignment_1
BUSINESS AND CORPORATE LAW1ContentsIntroduction......................................................................................................................................2Australian Securities and Investments Commission v Rich............................................................2Background of the case................................................................................................................2Facts of the case...........................................................................................................................3Duties Breached/Rules.....................................................................................................................4Reason for what the mentioned duties have breached?...................................................................5Decision of the court........................................................................................................................6Impact of the decision of the case on the operation of Australian companies................................7Conclusion.......................................................................................................................................8References........................................................................................................................................9
Business and Corporate Law : Assignment_2
BUSINESS AND CORPORATE LAW2IntroductionCorporations are non-individual body, which cannot act with it is own mind , so for this reasonthere are some directors and officers in every corporation who deals with people and take variousdecision in the course of running a corporation successfully. It is the duty of such appointeddirectors and officers to work in the best interest of the organization. Success of a corporatedepends on the fact that how wisely it is directors take decisions, how they respond to differentproblems in day to day business activities. To regulate any business there is always a law.Similarly to control to activities of a corporation, there is a law named Corporations Act, 2001(Cth). This is the basic act which defines the roles, responsibilities of directors and expectationof society from them. Here society refers to it is stakeholders. Whenever an officer is appointedin a corporate it is expected from him/her that the same will work in the best interest of entity.But if such person fails to do so, there are some provision related to penalties and persecution onCorporations Act, 2001 (Queensland Government, 2018).Australian Securities and Investments Commission v RichBackground of the caseThe mentioned case is related to director’s duty and the result of their breaches. This is a verywell-known case in Australia, where the lead argument held in between Australian Securities andInvestments (herein after indicate as ASIC) and Rich. These both are the major parties of thecase. Here Rich was a director of One.Tel, a corporation. Where ASIC is an independentgovernment body which regulates deeds and conduct of corporates in Australia (ASIC, 2018).
Business and Corporate Law : Assignment_3
BUSINESS AND CORPORATE LAW3Section 180(1) defines the duties of director along with the manner to follow these duties.According to this section a person who held position of director or officer in a corporation mustperform his/her duties like a reasonable and answerable person. It means it is expected fromevery director and officer of the corporation whether executive or non-executive that he/she willperform his/her duty with full of their attentive mind (Australian Government, 2018). Here in thegiven case, Rich being a director was liable to perform his duties with due care andresponsibilities as per section 180(1) of Corporations act, 2001 but he has failed to do so. By thisreason ASIC brought an action against him.Facts of the caseIn the given case, Mr. Rich was the founder and director of One.Tel, which was a corporationproviding services of GSM mobile in addition to services of long distance calls. One.Tel wasdoing well and in the year 1998 & 1999 expanded it is business activities overseas. Twoinvestors named as Packer’s publishing and Broadcasting and News Corporation brought aninvestment worth $600 Million to One.Tel. Soon this corporation cherished and becameAustralia’s fourth largest telecommunication provider. In May 2001, both of the said investors withdrew their investment back as they were updatedwith the fact that One.Tel needs $300 million further to survive. They have given an instructionto Ernst and Young, an auditorfor preparing a report to test the claim. While considering thisreport in a meeting later on, it has come into notice that there was no such requirement tointroduce $300 million to One.Tel and this corporation could continue it is business activitieswith the earlier investment worth $600 million (Jade, 2018).
Business and Corporate Law : Assignment_4

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