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Case Study on Company Law: Corporations Act of Australia, 2001

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Added on  2020-05-11

Case Study on Company Law: Corporations Act of Australia, 2001

   Added on 2020-05-11

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Company Law 1Company Law
Case Study on Company Law: Corporations Act of Australia, 2001_1
Company Law 2Table of ContentsAnswer 1:.........................................................................................................................................3Answer 2:.........................................................................................................................................5References:......................................................................................................................................9
Case Study on Company Law: Corporations Act of Australia, 2001_2
Company Law 3Answer 1:From the given case study, it has been analysed that Corporations act of Australia, 2001 hasdefined various fiduciary duties of the directors which will effectively evaluate if Bond hasbreached his duties as a director or not. Bond is the only executive director in the companynamed Vegas ltd who is also designated or working as the CEO (Chief Executive Officer) of thecompany. Bond has taken several vital actions in order to effectively enhance the businessoperations of the company (Whincop, 2017). The company on the advice of bank manager ofCayman bank has borrowed short term loan of about $500 million on twelve month basis and atthe same time, also advised to adjust the borrowings as non-current assets in the financialstatements of the company. In addition, Bond has also drafted announcement for ASX in order toannounce company’s decision to acquire a Casino Royale across London. Bond has also askedhis personal assistant to purchase share for Vegas ltd as earlier the announcement related toCasino Royale would be made by ASX. The Australian Corporations act, 2001 has imposed several fiduciary duties or responsibilitiesover the directors of companies who are incorporated as per the legislative system of Australia.The Australian government has formulated several companies which are entitled under theAustralian Corporations act, 2001 and at the same time, also aligned with legislative system ofgovernment (Queensland Government, 2017). The directors of companies operating acrossAustralian region needs to comply with different sections of corporations act in order toeffectively perform their duties or responsibilities.11 Australia (2011) Australian Corporations & Securities Legislation 2011: Corporations Act 2001, ASIC Act 2001, related regulations. Australia: CCH Australia Limited
Case Study on Company Law: Corporations Act of Australia, 2001_3
Company Law 4The persons or individual who are selected for the boards of Government are not legally boundedto comply under the various sections of corporations act as generally not considered ascompanies in the Australian legislation. From the corporations act, 2001, different fiduciary duties has been defined for the directors ofcompanies across Australia which mainly includes,Duty to effectively act for best interests of company under good faith and for adequatepurpose.Duty to effectively act with utmost care as well as diligenceDuty to avoid inappropriate use for the information (Australian Institute of CompanyDirectors, 2017)Duty to avoid inappropriate use for their positionDuty to disclose specific interestsFrom the different scenario of the case study and above discussed duties for the directors ofcompanies, it has been analysed that Bond has certainly breached his fiduciary duties as thedirector of Vegas ltd under the different sections of corporations act, 2001.22 Australian Institute of Company Directors (2017) General Duties of Directors. [Online]. Available at: http://aicd.companydirectors.com.au/resources/all-sectors/roles-duties-and-responsibilities/general-duties-of-directors (Accessed: 12 October, 2017).Baxt, R. (2016) Corporations Legislation. Australia: Thomson Reuters Limited.
Case Study on Company Law: Corporations Act of Australia, 2001_4

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