Corporate Law: Constitution and Amendments

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Corporate Law

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Executive Summary
The governing document of a company is its constitution which provides regulations in
order to govern the activities of a corporation. The constitution guides the directors to take
business decisions in order to achieve the organisations goals. The constitution also creates
contractual relationships between members of the company which include directors and
shareholders. The main purpose of the constitution is to govern the actions of the
shareholders and directors and provides guidelines regarding the internal management of
the company. The constitution can be amended by passing a special resolution by the
shareholders, and at least 75 percent of shareholders must give their approval to the
changes. The regulations given under the Corporations Act are not sufficient to ensure that
the interest and rights of minority shareholders are protected. However, the powers of the
majority shareholders are limited to protect the rights of minority members. Majority
shareholders have to ensure that they did not misuse their power to amend the constitution
which can negatively affect the minority shareholders or the company. They should only use
their power for a proper purpose and avoid focusing on personal interest while taking
business decisions.

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Table of Contents
Answer 1.................................................................................................................................. 3
Answer 2.................................................................................................................................. 4
Answer 3.................................................................................................................................. 5
References................................................................................................................................7