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Corporations Law Case Study based Assignment

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Added on  2020-03-16

Corporations Law Case Study based Assignment

   Added on 2020-03-16

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Corporations LawCase study based assignment(Student Details: )
Corporations Law Case Study based Assignment_1
QUESTIONS 2Answer 1IssueWhether the Galli grandchildren can take any action in respect of the non repayment of the dividend inthis case, or not?RuleThe Corporations Act, 2001 (Cth) provides the different provisions which govern the actions of the oneswho run the affairs of the company. In this regard, the directors have been given a key responsibility tosafeguard the interest of every stakeholder and not be indulged in a conduct which can be deemed asoppressive, unfair or prejudicial based on section 232 of this act (Cassidy, 2006). Where it is held by thecourt that such a conduct has been undertaken which can be deemed as discriminatory or prejudicial inan unfair manner or which is oppressive, the court can make an order pursuant to section 233 and thispower is present based on section 232 of this act (Australasian Legal Information Institute, 2017). As persection 233, the court has the power of directing the management to do something or to refrain fromindulging in certain conduct, which could include buying the shares of the shareholders, and the orderfor winding up of the company can also be passed based on this section (Victorian Law ReformCommission, 2016).In order to show that an oppressive conduct has taken place, with regards to the dividends the threeconditions given under Thomas v H W Thomas Ltd (1984) 1 NZLR 686 need to be applied. As per thiscase, it has to be shown that if remedies are awarded, they would be fair and equitable; that thepurpose of indulging in a particular conduct was to oppress, discriminate or prejudice; and that therehas been a failure in meeting the rational expectations of the parties. In the quoted case, the court heldthat by adopting a traditionalist financial strategy and by not paying high amounts as dividends, theconduct of the company would not become oppressive especially when the same has been agreed bythe majority shareholders and there is absence of failure which could show the unfairness (New ZealandOfficial Law Reports, 2017).ApplicationApplying the rules discussed here on the facts of the case study, the shareholders in question herebelonged to such class where the directors had the discretion of awarding dividends. So, if these are notprovided, it cannot be claimed upon by the shareholders as being oppressive. Also, applying the case
Corporations Law Case Study based Assignment_2

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