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Business law | Galli Grandchildren

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Added on  2020-03-04

Business law | Galli Grandchildren

   Added on 2020-03-04

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Running head: BUSINESS LAWBusiness lawName of the StudentName of the UniversityAuthor Note
Business law | Galli Grandchildren_1
1BUSINESS LAWAnswer 1Issue The issue in this case is to determine whether Galli Grandchildren can take any legal action inrelation to the non-payment of dividends. Rule The Corporation Act 2001 (Cth) provides protection to the minority shareholders of a companythrough its provisions against any oppressive actions by the directors of the company As provided through the Section 232 of the CA the court has the jurisdiction of making an orderas provided through section 233 of the CA in case the operations of the company, or anyproposed act or omission or resolution in relation to the company is to the detriment of theinterest of the shareholders as whole or is discriminatory, oppressive or prejudicial unfairly inrelation to a member or group of members of the company.Affair is any activity which is carried on in relation to the operations of the company as per theprovisions of section 53 of the CA. Section 233 of the CA provides that the orders in relation to section 232 can be anything which isfound to be appropriate by the court and also includes an order to Wind up the company,modification or repealing the existing constitution of the company, regulating the way in whichthe operations of the company are carried out, an order to purchase shares by reducing the sharecapital of the organization, legal action to be taken by the company, appointment of receiver,injunctions and orders of specific performance. Section 234 of the CA provides that any personwho is a member of the company can apply for an order under section 233.
Business law | Galli Grandchildren_2
2BUSINESS LAWIn the case of Waydev NSW Rugby League[1985] HCA 68 it was ruled by the court that theremedy can be obtained even if the directors have not violated any of their duties under commonlaw or statutory provisions. In order to determine whether a conduct is discriminatory or not theobjective test has to be applied.In the case of Re Jermyn Street Turkish Baths Ltd[1971] 1 WLR 1042 it had been ruled by thecourt that where a conduct lacks the extent of probity which is reasonably expected by themembers of the company in relation to the way in which its operations are conducted accounts tooppressive conduct. Application In the given situation it has been seen that the constitution of the company allows the directorsgive dividends to A class share holders at their discretion. The company was doing so over manyyears but suddenly decided not to pay it his year as the directors feel that the Galli children havebecome lazy. In this case as the Galli Grandchildren are the members of the company as per theprinciples of section 234 they can apply for an order under section 233 of the CA. The action as per the application of section 232 of the CA can be seen as oppressive anddiscretionary in relation to the Galli Grandchildren thus they can opt for an order under section233. It has been provided in the case of Waydev that a directors duty does not have to bebreached to establish a claim under section 232 with respect to oppressive conduct. Thus thecourt may order the company to issue dividends to the Galli Grandchildren as per section 233Conclusion Galli children can make a claim against the company under section 232-234 of the CA.
Business law | Galli Grandchildren_3

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