Corporations Act Case Study: Baby Belle Pty Ltd. and Schwartz

This case study analyzes the legal issues in the case of Baby Belle Pty Ltd., focusing on an application made by Mr. Schwartz under Section 206G of the Corporations Act 2001. The application sought leave to manage the company and be appointed as a director. The core issue revolves around whether Mr. Schwartz, having a history of offenses involving dishonesty, could be granted leave under the Act. The analysis examines the relevant sections of the Corporations Act, including Sections 206G, 206B, and 206A, which address director disqualification and management restrictions. The court dismissed Mr. Schwartz's application, citing concerns about his conduct and potential contravention of the Act. The court's decision emphasizes the importance of upholding the principles of corporate governance and the need to protect the interests of the corporation. The case highlights the complexities of director appointments and the legal framework governing corporate management, providing valuable insights into the application of the Corporations Act.

Running Head: Law 1
Law

Law 2
Facts of the case:
Application under section 206G of the Corporations Act 2001 was made by Mr. Schwartz on 7
August 2007, for the purpose of granting leave to manage the proprietary company. This
company was registered under the Act and named as Baby belle Pty Ltd. Application made by
Mr. Schwartz also applied for the leave to appoint as director of the Baby belle. However, it must
be noted that application was not made as per the terms of the issue.
Legal issues:
The main issue related to this case is whether it is possible to give leave to Schwartz under
Section 206G of the Corporation Act 2001, for the purpose of managing the specific corporation
named as Baby belle?
It must be noted that, Mr. Schwartz wants leave for appointing in Baby belle as director, but
application made by them was not made as per the terms of the issue. Issue involved in this case
was complicated in nature because it involves charges of early prosecution related to Mr.
Schwartz.
Law:
Legal rules related to this case are stated in the Corporation Act 2001. Case mainly involves
rules stated below:
 Section 206G (1) of the Corporation Act 2001 states that, in case any was person
disqualified for managing the operations of the Company, then such person has right to
apply to the Court for granting leave to manage a corporation, specific types of
corporation, or any particular corporation if ASIC does not disqualify such person. Mr.

Law 3
Schwartz made application under clause c of this section for the purpose of managing
Baby belle.
 Section 206B (1) states that, person is disqualified from managing the corporation if such
person was previously involve in any offence which involves dishonesty and
imprisonment for at least 3 months. In the present case, Plaintiff was engaged in the
offense stated in section 206B (1), and also convicted for the period of 5 years.
 This case also involves Section 206A (1). As per this section if person is disqualified by
the Act for the purpose of managing the corporation then such person commits offence if
such person participate in decision making process or provide instructions, etc.
Decision of the case:
Application made by Mr. Schwartz was dismissed by the Court. Court stated that evidence
provided by Mr. Schwartz was unjustified because of the following reasons:
 Summary related to evidence raised some serious issues such as whether section 206A
was contravened by Mr. Schwartz and whether he continuously contravenes this section.
 Court also stated that Mr. Schwartz engaged in conduct which was disqualified and
includes offences related to dishonesty.
 Judge further stated that, he must review the facts of the case presented before him, and
he was bound to apply the principles stated above for the purpose of determining the
issue whether it was right for the Court to grant leave to Mr. Schwartz. Judge further
stated that on the basis of current material, Court was not bound to grant leave for
managing the Babybelle.

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It must be noted that, Mr. Schwartz can make a fresh application to the Court, if any evidences
related to the stated issues are available.
References:
Corporation Act 2001- Section 206G.
Corporation Act 2001- Section 206A.
Corporation Act 2001- Section 206B.