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Business laws - Sample Assignment

   

Added on  2021-05-30

8 Pages2058 Words44 Views
Running head: BUSINESS LAWBusiness LawName of the StudentName of the UniversityAuthor Note

1BUSINESS LAWTopic 1Membership, the powers of a member and dividends The members of a company are the owners and custodians of the company. Theshareholders are the members of a company which is limited by shares. The shareholder shallhave legal rights which are more limited in nature than the rights granted to conventional owners.The powers are restricted to non-interference in managerial decisions. The powers include theright to vote in meetings which includes the resolutions regarding appointment and terminationof directors. The member has the right to propose resolutions in meetings and is also in theposition to receive distributions from the company in the form of dividends. The member cantake active participation in the functioning of the company and can also receive certain restrictedinformation about the company. The rights of the members are governed by the company’sconstitution and the constitution also gives rights to the members which are in addition to thealready existing rights. To become a member, the individual can apply for registration. Othermeans of becoming a member are by receiving transfers or by applying for shares. In cases ofdeath or bankruptcy, the member might receive shares by method of transmission. The details ofthe members, like his address, name, the class of shares he is holding, the date when his namewas entered on the register, the share certificate number has to be entered on the registered whichis maintained by the company. The power of the member includes a right to apply forrectification in cases of error in the share register. The right of the member shall also extend topurchasing assets, taking decisions in passing resolutions, approving the remuneration ofdirectors. Section 124(1)(d) talks about dividends which is defined as a portion of a company’sassets that the company has the power to distribute to its shareholders. Edwards v Halliwell[1950] 2 All ER 1064 at 1067 held that the shareholder cannot gain information more than that is

2BUSINESS LAWprovided and gaining more information is deemed cumbersome. A member cannot claim to bepaid a dividend by the company. It is paid at the discretion of the company. Dividends are onlypaid in cases of the company passing the balance sheet solvency test. Jonathan Ferrer in hisarticle The Case of the Mandatory Disclosure of the Dividend Decision discussed about howAustralian laws are not equipped enough to regulate dividends. The journal is has been veryenlightening in connecting the lecture to the current scenario of regulation of dividends. Topic 2- Corporate governanceCorporate governance is said to be a framework of rules, systems by which authority is exercisedand controlled in a corporation. The process of corporate governance helps in holding thecompany’s defaulters accountable. The key components of the Australian form of corporategovernance are- Transparency, accountability, stewardship and integrity. The importance ofcorporate governance lies in laying solid foundation for management. Under the framework ofcorporate governance, the members are mandated to act ethically keeping in mind the ethics andprinciples of the company. The members are obligated to make timely disclosures regarding thefunctioning of the company. Under corporate governance, the members have to analyze the risksand mitigate them accordingly. Under the model of corporate governance, the members of thecompany need to be fairly remunerated and compensated in cases of breach. As stated by Trickerand Tricker (2015) it is important to effectuate corporate governance in company to ensure thatthe members have their rights recognized in a corporate set up. In understanding the management of a company, it is important to understand the roles played byofficers, directors, company secretaries and the senior managers. The director is appointed by theboard to ensure that the functions of the company are carried out properly. The director is

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