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Case Study Analysis of Carborundum Pty Ltd- Company Law

   

Added on  2020-04-01

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Carborundum Pty Ltd 1COMPANY LAW: A CASE STUDY ANALYSYIS ON CARBORUNDUM PTY LTD[Author(s) name(s):]Company LawTutor(s) name(s):Institutional affiliation(s):Author(s) note:
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Carborundum Pty Ltd 2Table of ContentsPART A: ADVICE TO HILARY..............................................................................................3PART B: ADVICE TO DONALD............................................................................................5PART C: ADVICE TO COLIN.................................................................................................6PART D: ADVICE TO ERIC....................................................................................................7PART E: ADVICE TO ALAN..................................................................................................8
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Carborundum Pty Ltd 3PART A: ADVICE TO HILARYIssues:What is the liability of all named parties at dissolution?What is the security accorded to Hilary Winton’s position as Managing Director?What are the consequences of Hilary’s action of according Inventions a majority shareholding without the consent of all directors and the company secretary?What is the security accorded to Hilary Winton’s position as Chief Engineer?Rule:In Australia, the rule with regard to limited liability companies is that, the liability of eachmember is limited to the amount contributed to the share capital and any unpaid shares ifany.1Generally, s 203C of the Act 2001 allows for the removal of a director in a proprietarycompany by ordinary resolution; notice of the meeting must be issued 21 days prior to ensurevalidity. According to s 140 of the Act 2001 (Cth), a company’s constitution serves as acontract between the company and its members, directors and other stakeholders. As such, adirector’s position is secured by a statutory contract if expressly stated in the constitution.However, the only remedy available for breach is damages as a service contract cannot beenforced on unwilling parties.Further, in Eley v Positive Government Security Life Assurance Co Ltd2 the court held that aposition secured ‘for life’ in the company constitution for an outsider position is not securedby the provision of s 140 unless an express separate employment contract exits.In Gambotto v WCP Ltd,3 the court set precedence with regard to compulsory acquisitionsand the rights of minority shareholders. According to the holding, the court must determine1 Ron Dagwell, Graeme Wines, Cecilia Lambert, Corporate Accounting in Australia (Pearson Australia, 2012)182Eley v Positive Government Security Life Assurance Co Ltd (1876) 1 Ex D 883Gambotto v WCP Ltd [1995] HCA 12
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