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Law Assignment - Corporations Act 2001

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Added on  2020-03-23

Law Assignment - Corporations Act 2001

   Added on 2020-03-23

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Running Head: Law 1Law
Law Assignment - Corporations Act 2001_1
Law2Answer 1Issue:Whether grandchildren’s of Galli has right to take action against the director for non-payment ofdividend?Rule:Section 232 of the Corporation Act 2001 states, Court has power to make order under section233 of the Act if: Any conduct of the company contravenes the interest of members of the company oroppressive and unfair against the interest of the members. Any actual or proposed act of the company or on behalf of the company contravenes theinterest of members of the company or oppressive and unfair against the interest of themembers. Any resolution or proposed resolution passed by the members or class of members of thecompany contravenes the interest of members of the company or oppressive and unfairagainst the interest of the members (Corporation Act, 2001). Section 233 of the Act states, court has power to make following orders if provisions of section232 are satisfied:Court can make order for winding up the company.Court can make order for modifying the company’s constitution.Court can make order for regulating the future conduct of the company. Court can make order to the company for initiating, defending, or discontinue anyproceeding of legal nature.
Law Assignment - Corporations Act 2001_2
Law3Court can authorize any person or group who holds company’s share by making an orderfor the purpose of initiating, defending, or discontinue any proceeding of legal nature.Court can make order for appointing the receiver and manager for the property of thecompany.Court can make order for restricting any person from performing any specific act.Court can make order for requiring any person to performing any specific act(Corporation Act, 2001). In case law Hillam v Ample Source International (No 2) [2012] FCAFC 73, Court stated that itwas necessary to wind up the solvent company in those situations when minority shareholders ofthe company have been oppressed. It must be noted that some of the common area are listed below, in which Court usually find theoppression on part of the company:When excessive remuneration is paid by the executive shareholders of the company.Directors or majority shareholder restrict the dividend of the company without anyjustifiable reason. Reducing the interest of the shareholder in the company’s stake by adopting means whichare not fair (Zammit, 2011).Application:In the present case, Mario and siblings of Mario are not happy about the thing that Jason hasbeen stirring up with the grandchildren of Galli, because as per their opinion grandchildren ofGalli are lazy and not deserving. Board of GML decided not to pay dividend to the A class of
Law Assignment - Corporations Act 2001_3

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