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Law of Business Organizations | Assignment

   

Added on  2020-04-21

11 Pages3070 Words72 Views
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QUESTIONS 2Table of ContentsQuestion 1........................................................................................................................................3Question 2........................................................................................................................................4Question 3........................................................................................................................................5Question 4........................................................................................................................................7Task 1...........................................................................................................................................7Task 2...........................................................................................................................................9Question 5......................................................................................................................................10

QUESTIONS 3Question 1This particular question is related to the breach of director duties which relates to the dutyof directors to use the information of the company for proper purpose, particularly the information which they have obtained by holding a key position in the company in a manner which is detrimental for the company or where an advantage if attained for themselves or for someone else, under the general law and as per the statutory law of Corporations Act, 2001 (Cth), specifically its section 183. Under section 182 of this act, a similar prohibition has been placed on the misuse of position held by the director. This question is also related to the breach of director duties which relates to the duty of directors to act in good faith, for proper purpose and in the best interest of the company under the general law and as per the statutory law of Corporations Act, 2001 (Cth), specifically its section 181.The main issues of this case relates to the breach of director duties by Morton and Eric. As the non-executive directors of the company, it was the duty of both these directors to work towards the benefit of the company. It was the duty of Eric to disclose that there was a conflict of interest and not to misuse the information and position which he had by being a non-executive director of GoldCoin Bank Ltd. In ASIC v Stephen William Vizard[2005] FCA 1037, Vizard dealt with the company’s shares and obtained a personal advantage for himself as he usedthe confidential information of Telstra which he had gained by holding the position of director init. As a result of this, a penalty of $390,000 was imposed on him and he was also disqualified from managing the affairs of the company for ten years. It is very clear in this case that Eric misused the information which he got by holding the position of non-executive director in the company. He used his position to persuade the other directors to get the deal signed with Tricky

QUESTIONS 4Partners. By doing so, he caused detriment to the company and gained advantage for himself thereby breaching his director duties under the general law and the one under the statutory law. Based on the quoted case, he could be disqualified and penalised. He had to disclose material personal interest per section 191-195, which was again not done. When it comes to Eric, it was his duty to act in the best interest of the company. When he was aware of, or had suspicion about the conduct of Morton, he should have gone to the board and raised this issue. It was his duty to work in the best interest, which he failed to do. By skipping the meeting, he further breached his director duties.On this basis, it can be concluded that there had been indeed breach of director duties on part of Morton and Eric. Question 2This particular question is related to the breach of director duties which relates to the dutyof good faith and avoiding conflict of interest, apart from not misusing the crucial information ofthe company based on the general law and under section 181 and 183 of the CA. Apart from this,the question also has the traits of oppressive conduct on part of the three directors against Oistrakh. The key issue of this case relates to the misuse of position in the company and conflict of interest on part of three directors of the company and regarding the oppressive conduct by the three directors. Section 232 of CA gives the option to the minority shareholders of the company to apply for relief before the court where the conduct of the directors can be deemed as oppressive, discriminatory, or prejudicial. And the remedies can be claimed under section 233 of this act

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