Corporation Act

RUNNING HEAD: CORPORATION ACT
Corporation Act
Name of the student
Name of the university
Author Note

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CORPORATION ACT
Response to question (i):
In what capacity was the corporation involved?
In the case of ASIC v Cassimatis was the director of Storm financial services in the country of
Australia accused by the commission breaching the duties. The director of the financial
department of Cassimatis has not performed the responsibilities and the duties of the financial
organisation. Under the provisions of the Corporation Act 2001 the director of the finance
department of the company is found to be guilty or responsible for violation of any duties and
responsibilities for the company. It is a basic duty of the director to observe the consequences
that are catastrophic in the company.
Response to question (ii):
What were the triggers and circumstances that led to the litigation?
Cassimaties has violated to perform the responsibilities and the duties and has performed a
breach of duty towards the financial company Storm for which the company had suffered from a
massive loss in that particular financial year. Cassiamties has not performed any type of decision
making task thinking about the maximising the benefit of the shareholders. As a result the
company was charged under the provisions of the breach of duty.
Response to question (iii):
What remedies were being sought?
Both the directors of the company was held liable and was suspended for managing any of the
corporations and for performing breach of duty under section 180(1) of the Corporation Act

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CORPORATION ACT
2001. The court has also imposed a pecuniary penalty for the particular case. These are the actual
remedies sought for the guilt performed by the directors of the Cassimatis.
Response to question no (iv):
What was the outcome?
The Court held that Storm had breached the law by providing inappropriate advice regarding
investment. Justice had said there is a doubt that the corporation’s actual breach is required for
proving the director’s breach of duty. It is important to keep in mind as it is suggested a
company’s contravening intention that serves as a good indicator for the directors breaching their
duty. In this case the Court elaborated the three elements by applying the risk-benefit test
contravening the law of the company.
Response to question (v):
Could the case have been avoided?
The case could not be avoided, as there was a breach of duty by the director of the company
under section 180(1) of the Corporation Act 2001. The directors have avoided performing the
responsibilities and the duties for maximising the profit of the shareholders and for the benefit of
the company.