Business Law

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

1BUSINESS LAW
Table of Contents
Question 1..................................................................................................................................2
Heading..................................................................................................................................2
Issue........................................................................................................................................2
Rule........................................................................................................................................2
Application.............................................................................................................................2
Conclusion..............................................................................................................................3
Question 2..................................................................................................................................4
Heading..................................................................................................................................4
Issue........................................................................................................................................4
Rule........................................................................................................................................4
Application.............................................................................................................................4
Conclusion..............................................................................................................................5

2BUSINESS LAW
Question 1
Heading
This problem is based on a Director’s failure to carry out his duties in good faith and
indulging in insider trading contravening the provisions of the Corporations Act 2001.
Issue
To advise the directors of Port Hotels in context to the action that they may take
against Fassbinder.
Rule
Section 181 of the Corporations Act 2001 ensures that a director must exercise his
power and discharge his duty in good faith for a proper purpose and for the best interest of
the company.
Section 1043A of the Corporations Act 2001 prohibits insider trading. This provision
prohibits a person who is an insider in a corporation to communicate or share any relevant
financial products (mentioned under Division 3) to another person or corporation.
Contravention of the above provisions would attract penalties under section 1317E of
the Act.
Application
In this case Fassbinder has contravened his duties as a director. he did not act in good
faith for a particular purpose or for the best interest of the corporation. Being the director of
Buildenbust he had the knowledge that Buildenbust’s issued capital is $2 and it had no
capacity to complete the project along with the fact that it had outstanding debts in the
market. Knowing all of it, Fassbinder did not stop Port Hotels from assigning Buildenbust to