The Provision of the Corporation Act 2001

Running head: COMPANY LAW
Company law
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1COMPANY LAW
Table of Contents
Introduction:...............................................................................................................................2
Discussion:.................................................................................................................................2
Good faith:..............................................................................................................................2
Best interest of the company:.................................................................................................4
In the interest of the company as a whole:.............................................................................6
Conclusion:................................................................................................................................8
Reference:..................................................................................................................................9

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Introduction:
The present case is consisting of certain questions that are specifically engraved under
the provision of the Corporation Act 2001. The subject matter of the case is evolved with the
continents of Australia and it depends upon the duties of the director in a company or the
corporation (Hiller 2013). The company related matters of Australia is dealing by
Corporation Act 2001. It has been stated under the Act that it is a duty of the director to act in
good faith while performing his duties and should treat all the shareholders and the
colleagues similarly (Li 2014). The Acct binds the director of a company so that they could
not take any arbitrary steps. The primary objective of the Act is to protect the interest of the
shareholders. Under the Act, it has been mentioned that a director of a company should work
for the best interest of the company (Huggins, Simnett and Hargovan 2015). Therefore, a
director should have to adopt necessary policies for the betterment of the company. A
difference between two terms- best interest of the company and interest of the company as a
whole has also been done in this case.
Discussion:
(a)
Good faith:
The term good faith means an intention to do a job sincerely (Anderson 2014). In the
continents of Australia, the term good faith is particularly goes with the acts of the directors
of the company. Directors are holding an important position in a company and all the
important works are executed by the directors (Welsh 2014). Therefore, the future of a
company is vehemently depends upon the acts of the directors. The primary motto of a
director should be doing certain works for the benefit of the company. They should be

3COMPANY LAW
intended to use the power imposed by the company positively and they should not act for
gaining illegal money from the company (Dixon 2016).
The principle of good faith is depending upon the principle of equity. It is considered
as the fiduciary obligation of the directors and under this provision; a director is obliged to
perform his duties for the benefit of the related persons of the company (Viven-Wilksch
2015). The term fiduciary means trust and in the sectors like company or corporation, the
person who acts on behalf of another, is said to hold the fiduciary position. Under the law it
has been mentioned that the person upon whom the fiduciary conditions are imposed ought to
act honestly.
Good faith has also been discussed under the provisions of the Corporation Act 2001.
From the definition of the director under section 9 of the Corporation Act, the importance of
the director can be assessed properly (Whincop 2017). They represent the company in various
issues and therefore, it is required by them to perform the duties diligently. The term good
faith has been discussed under section 181 of the Corporation Act where it has been
mentioned that it is mandatory for the director to exercise their power in good faith. This is a
principle duty of the director as mentioned under the Act for the better interest of the
corporation. It has been stated under section 184 of the Act that if there is any violation
regarding the provision for the good faith has been made by the director, he shall be liable to
penalise under the necessary provisions of the Corporation Act. A director is said to violate
the provision regarding good faith if they become reckless regarding their work and/ or
perform their work dishonestly. However, section 184 is a provision regarding the criminal
responsibility of a director. The term good faith mainly engraved under section 181 of the
Corporation Act 2001 (Hannigan 2015 ).