logo

The Constitution of a Company

10 Pages2244 Words62 Views
   

Added on  2020-03-16

About This Document

The corporation act and constitution Section 124 of the CA state that the right to enforce the rules of the constitution can be enforced between the directors of the company which has been done in the case of March Sheep-Breeders Association Ltdit had been ruled by the court that the constitution of the company was unfairly breached by the solicitor in the case of March Sheep-Breeders Association Ltdit had been ruled by the court that the constitution of the company was breached by the solicitor in the case of March

The Constitution of a Company

   Added on 2020-03-16

ShareRelated Documents
Running head: LAW OF BUSINESSLaw of BusinessName of the StudentName of the UniversityAuthor Note
The Constitution of a Company_1
1LAW OF BUSINESSQuestion 1Constitution Constitution of a company or its replaceable rules set out the guidelines which the directors andofficers of the company have to follow towards carrying on their powers in relation to thecompany1. The constitution also sets out the terms of relationship of the company with any thirdparty as well as the relationship between the members of the company. In this question thevalidity of powers provided to the constitution of a company have been discussed. In additionhow and when can the constitution of a company be amended by members have also beendiscussed in order to determine the issues identified in the question. The first issue which hasbeen identified in this question is that whether Max has the right to enforce the clause which waspresent in the constitution of Chocolate Cleaning Products Pty Ltd (“CCP”). The second issuewhich has been identified in relation to the question is that whether the directors of CCP cansuccessfully change the constitution in the light of its previous clauses. The issues would bedetermined after identification of relevant provisions related to constitution as provided by theCorporation Act 2001 and then applying such laws on the facts of the case. The corporation act and constitution Section 124 of the CA state that the powers of a company in relation to its operation can berestricted to the constitution. However a transaction cannot be declared as invalid because it isnot within the scope of the constitution2.1 Hiller, Janine S. "The benefit corporation and corporate social responsibility." Journal of Business Ethics 118.2(2013): 287-301.2 Corporation Act 2001 (Cth) at Section 124
The Constitution of a Company_2
2LAW OF BUSINESSAccording to Section 136 of the CA the constitution of the company can be repealed on modifiedby the company. A special resolution is required to repeal or modify the constitution whichmeans that the majority of two third of voting members is required. It may be provided by theconstitution of the company that a special resolution required to amend the constitution will nothave any effect unless an additional requirement which has been provided in the constitutionwith respect to such modification or repealing has been acted in accordance with. In addition if itis not provided otherwise by the constitution the additional requirement can be repealed ormodified by the company as provided in the previous subsection only if there is compliance withthe additional requirement3. Section 232 of the act deals with oppressive remedy with respect to the member of a company. Ithas been stated by section 232 of the CA that the court can make any order which it thinks to beappropriate in addition the provisions provided in section 2334. An order in relation to Section233 under section 232 can be made by the court if it is owned by the court at the directors of thecompany and carrying on the affairs of the company or up present or future omission or act withrespect to the company or a present or future resolution of class of members all members of thecompany which is not in the best interest of the members of the company or a member of acompany or is unfairly discriminatory the judicial and operative to a member or memberswhether in any other capacity or that capacity5.In the case of Hickman v Kent or Romney March Sheep-Breeders Association6 it had beenprovided by the court that a statutory contact is formed between the members, officer anddirectors of the company through its constitution and such rules can be enforced against the3 Corporation Act 2001 (Cth) at Section 1364 Corporation Act 2001 (Cth) at Section 2325 Corporation Act 2001 (Cth) at Section 2336 [1915] 1 Ch 881
The Constitution of a Company_3

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
ACC220 Business Law Assignment
|10
|2009
|336

Business law | Galli Grandchildren
|7
|1276
|54

Business Law Assignment Corporation Act 2001
|5
|894
|31

Corporations Law - Rules and Regulations for Companies in Australia
|8
|1723
|491

Legal Regulation of Business Structure
|11
|3142
|63

Business Law
|9
|2257
|132