Business law - Solved Assignment PDF
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Added on 2021-06-18
Business law - Solved Assignment PDF
Added on 2021-06-18
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Running Head: BUSINESS LAWBUSINESS LAWName of the Student:Name of the University:Author Note
BUSINESS LAW1Answer oneIssueWhether the diligence and care duty of section 180(1) have been breached or not? RuleThe term director means an individual who is provided extreme control for managing the task ofthe company for whom they work. There are some rules that have been laid down by thecommon law for equitable directors duties and statutory duties have been imposed on thedirectors have been given via the relevant sections of the Corporation Act 2001 (Cth). The meaning of a director has been provided in section 9 of the Corporation Act 2001. A directoris a person who is participating in making the decision of the organization or influencing theprocess. The initial duty of the directors that have been given by the application of Corporation Act 2001is witnessing diligence and reasonable care by managing the purposes of the company. Undersection 180 of the Act, this duty of the directors has been provided. Further, this section has beensplit in 2 sub-parts. The initial part of this section gives the rules by which it has been determinedthat in which situation be the duty of diligence and reasonable care that held has been breachedby the director. The subsequent part of this section deals with the common law businessjudgment rule in the legislation. This rule is that kind of defense on to which the company’sdirector depends on so that they carry out their decision of the business effectively that alsoinvolves taking of risks (French et al 2014).
BUSINESS LAW2The provision in this section also states that any director of the company who is there to managethe dealings of the company and observe care and due diligence by managing the organization.The ability of a person to exercise the power and duties and to discharge them if that person isthe director or the officer of the similar company and handling the similar situation areoccupying the similar office and responsibility if he was the director of that company. Thus, theconsequences of the section that has been mentioned in relation to the corporation law are thatthe requirement of the director is to express their exceptional skills by managing the functions ofthe organization. According to the case of ASIC v Forrest and Fortescue [2012] HCA 39 it washeld that the director of the organisation has not fulfilled the provisions that have been givenunder the section of 183 as they have violated the provision of section 1041H of the above-mentioned act, making it deceptive and misleading contact with respect to the financial services.In the above-mentioned case the court held that if the company’s director does not obey with therequirements that are said to be legal, they cannot function carefully and diligently with respectto managing the organisation as a director who holds similar office in the similar situation andwill not take the decision that involves the legal obligation. The provisions of the section of 180 (2) of CA provides with the situation in which thecompany's director might get away with the allegations with respect to the breach of the duty ofdiligence and care. The court has said that the requirements that have been mentioned under thesection 180 (1) where the role of the business judgment has been satisfied by the directors of thecompany’s director. In addition, the company's director must not have any interest in relation tothe decision of the subject matter. Under this rule, the duty of the directors is to inform about thedecisions before it is being made to meet the requirements. Further, there should be the rational
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