Business Law

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

1BUSINESS LAW
Issue
The issue is to determine whether Rubin as the chairman of the company has reached
any fiduciary or statutory duties.
Rule
Subject to the constitution of a company, the directors bear the overall responsibility
of the management of the company and thereby holding certain duties, fiduciary and
statutory. Section 180 to 184 of the Corporations Act 2001 (Cth) lays down the general duties
of a director in Australia. Section 180(1) of the Act expects a director or other officer of a
company to carry out their duties with care and diligence just like any other reasonable
person would1. Exception to this provision as stated under section 180(2) of the Act and in
the case of ASIC v Rich, the Business Judgment Rule holds the view that the judgment of a
director taken in the best interest of the company should be considered valid if such judgment
was made in good faith, not having a personal interest in regard to such judgment and
believing that search judgment would prove to be the best decision for the company2.
Section 181 of the Act holds the view that a director or officer of the company must
carry out their powers and responsibilities in good faith for the best interest and a proper
purpose of the company3.
Section 182 of the Act states that a director, officer, employees or secretary of a
company should not make use of their position improperly in order to derive personal
advantage or cause harm to the company4.
1 Corporations Act 2001 (Cth), s 180(1)
2 Australian Securities and Investments Commission v Rich (2009) 236 FLR 1; Corporations Act 2001 (Cth), s
180(2)
3 Corporations Act 2001 (Cth), s 181
4 Corporations Act 2001 (Cth), s 182