Business Law

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

BUSINESS LAW
1
Table of Contents
Facts and Issue...............................................................................................................2
Rule or Law....................................................................................................................2
Application.....................................................................................................................3
Conclusion......................................................................................................................6
References......................................................................................................................8

BUSINESS LAW
2
Facts and Issue
This case is based on the company named ‘the Grumpy Grande Pty Ltd’ formed by
the five brown brothers for selling premium coffee to corporate events. The company
included in its constitution that the five brothers shall be the only shareholder as well as
director of the company along with the clause that the shareholders shall not be able to sell
their shares without taking permission from the other shareholders and also that a shareholder
can only sell his shares to the existing shareholders only and not to an outsider. Like most
company, Grumpy Grande Pty Ltd also included the clause of dominance of majority
decision for making significant decisions for the company that would involve the majority of
the shareholders to agree to a particular matter to give it an effect. The company functioned
fairly on the initial months and then issues started to crop up between brothers. The four elder
brothers started to gang up against the youngest brother, Tim. Using the power of majority
decision they started to dispose of assets of the company without valuing the opinion of Tim.
The brothers were trying to kick out Tim from the company as well.
In this situation, Tim is advised as per the rights that are available to him as a director
of a company, under Corporations Act 2001 (Cth).
Rule or Law
Section 232 of the Corporations Act 2001 (Cth) empowers the court to deliver an
order under section 233 of the same Act pertaining to the conduct of the affairs of the
company; or an act or omission created by the company; or a resolution taken or to be taken
by the company which is either contravening the interest of the members of such company or
which is unfair, discriminatory and oppressive towards other members as observed in Fexuto
Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97. Shareholders comes under the
purview of ‘members’ in this section. Section 233 of the Corporations Act 2001 (Cth) lays