Corporation And Business Structure Assignment

Corporation
And
Business Structure

TABLE OF CONTENT
A. Breach of duty by directors.........................................................................................................3
ISSUE..........................................................................................................................................3
RULES........................................................................................................................................3
APPLICATION..........................................................................................................................5
CONCLUSION...........................................................................................................................6
B. Action to be taken by company...................................................................................................6
ISSUE..........................................................................................................................................6
RULES........................................................................................................................................6
APPLICATION..........................................................................................................................7
CONCLUSION...........................................................................................................................7
C. Action of oppressive conduct against Directors and remedies available there to.......................7
ISSUE..........................................................................................................................................7
RULES........................................................................................................................................7
APPLICATION..........................................................................................................................9
CONCLUSION...........................................................................................................................9
Question 1........................................................................................................................................9
Statutory and general duties of law.............................................................................................9
Question 2......................................................................................................................................10
Suggestion to James and Jerry ................................................................................................10
Question 3......................................................................................................................................11
Remedies available for breach of different types of director’s duties......................................11
Question 4......................................................................................................................................12
Legal ground for breach of director’s duty...............................................................................12
REFERENCES..............................................................................................................................14

A. Breach of duty by directors
ISSUE
 Whether Aaron and Cassie are under the breach of their director's duty for the No-Frills
Furniture Ltd.
RULES
Corporation Act, 2001:
Duties and responsibility of Directors
General Duties:
 To act in goof faith in the best interest of the organisation with a proper purpose.
 To exercise care and diligence.
 To avoid conflict between personal and company's interest.
 To avoid trading while insolvency of the company, as business is unable to pay its debts
when are falling due.
General responsibility imposed on director:
 To have a current registered office.
 To have a principle place of business.
 To disclose all the personal details of directors.
 To keep all the financial records.
Section 180 (1) and 181: Duty to act in good faith and best interest of the company:
This section of the Corporation's Act, 2001 imposes a civil obligation over the directors
of the company. The directors are required to exercise a reasonable degree of care and diligence
while exercising their power and duties (Corporations act 2001, 2018). By reasonableness means
to take care and consciousness while taking decision that a person under position of directors in a
company would exercise under given circumstances. This can be explained as:
 to make judgement in good faith and for a proper purpose,
 do not have a material personal interest in the matters for which judgements is being
taken.
 To have a rationale believe that the judgement is in the best interest of the company.
The directors must not fail in abiding by the above requirement of care, skills and
diligence in delegating the authorities in the company.
Section 182: Duty to avoid improper use of position

This is another civil responsibility of director which prohibits a director of a corporation
from using their position to gain advantages for themselves or someone else or causing detriment
to business. Section 184(2), defines that dishonest use of the position leads to commencement of
criminal offence under the Corporations Act.
Section 183: Duty to avoid improper use of information
This is a civil obligation of the director imposed by under the Corporations Act that a
person under the position of director receive any information because on being director of the
company must not use such information for improper purpose, to gain personal advantages for
themselves and cause damages to the business (Barker, 2016)). The information used dishonestly
by the directors leads to commitment of criminal offence [Section 184(3)].
Section 191: Duty to not to abuse corporate opportunity, avoid conflict of personal interest
and to disclose material personal interests
All the directors have a duty to disclose all material of personal interest in affairs of the
company and disclose conflict of interest (Directors' liabilities when things go wrong, 2018 For
such instances the director after disclosing such interest may be refrained from voting on the
issue. The directors are imposed with a duty to not to take advantages of a business opportunity
gain personal benefits at the expenses of the company.
Section 203(C):Removal of director by member
In a private or proprietor company:
 a director can be removed by passings resolution from office; and
 appoint another person as director instead by passing a resolution.
A director may be removed by a majority of the board of directors if it is allowed by the
constitution of the company.
Breach of the duties of director:
To breach means to act against the given provision, set of rules and regulation or law.
Breach of directors duties and responsibilities means violation of the defines duties and
responsibilities as given in the Corporation Act, 2001 of Australia (Hargovan, 2018). The
directors are required to act in accordance with the provision of the act while carrying out their
responsibilities and discharging their duties in the company.
Case law: Australian Securities and Investment Commission (ASIC) v Cassimatis (No. 8)
[2016] FCA 1023