Corporation Law Assignment: ASIC and Vocation Limited Case Study

This assignment analyzes a corporation law case involving Vocation Limited and the Australian Securities and Investments Commission (ASIC). The solution addresses several key questions, including the availability of business names, contraventions of the Corporations Act (specifically sections 674, 1041H, 708A(10), and 180), and the liabilities of company directors. It examines the breach of continuous disclosure obligations, misleading announcements, and the application of the business judgment rule. The assignment delves into the responsibilities of the CEO and directors, emphasizing due diligence and care in business operations. The solution references relevant sections of the Corporations Act and provides a detailed analysis of the case, supported by cited sources.

RUNNING HEAD: - Law 0 | P a g e
Law
Module Number

Law 1 | P a g e
Table of Contents
“Question 1”................................................................................................................................................2
“Question 2”................................................................................................................................................2
“Question 3”...............................................................................................................................................2
“Question 4”................................................................................................................................................3
“Question 5”................................................................................................................................................3
References...................................................................................................................................................4

Law 2 | P a g e
“Question 1”
a) The business name “iDesign” is not available for registration of new business name as there
are already registered businesses with this name. However the business name “Digital10” is
available for registration of new business but a similar business name is also available. Hence the
business name “Digital10” can be considered for the registration of new business name (ASIC
Connect, 2019).
b) Vocation Limited is an Australian company registered under ASIC having its registered office
at “North Sydney NSW 2060”. The CAN of the company is “CAN 166 631 330”.
“Question 2”
a) The Vocation Limited contravened its continuous disclosure obligation under “section 674” of
the corporation Act and also found in contravention of “section 1041H” and “section 708A(10)”
of the corporation Act. Also the Chief Executive Officer of the company contravened “section
180” of the Corporation Act which enforces a proper due diligence and care in the business by
the directors. The CEO of the Vocation Limited performed the breach of section 180 and also
made the misleading announcements.
b) The Board of Vocation limited decided to not disclose the withholding and suspension of
payments and funds which causes the breach of rule of continuous disclosure. Also the directors
of company made misleading announcement which was revealing that any of the act undertaken
by DEECD would not have any impact upon Vocation Limited (Vanhaverbeke, et al. 2015).
“Question 3”
a) For the contravention of several sections under Corporation Act, ASIC commenced the civil
penalty proceeding against the directors of Vocation Limited. The names of those directors are
“Mark Hutchinson (CEO), John Dawkins (Chair), and Manvinder Gréwal (CFO)”.
b) The three directors i.e. Mark Hutchinson (CEO), John Dawkins (Chair), and Manvinder
Gréwal (CFO) were alleged by ASIC to be in breach of section 180 of Corporation Act. The
directors contravened section 180 of Act by permitting Vocation’s contravention of section
1041H given in context with the due diligence (Questionnaire) ASIC Company details portal
(2019).

Law 3 | P a g e
“Question 4”
a) Mr. Hutchinson was the chief executive officer of the Vocation Limited. As provided under
the section 180 of Corporation Act, a CEO must be adequately informed about the scope of
relevant business issues and should perform adequate due diligence and care in the business.
b) A director is liable under section 180 of Corporation Act for allowing a company to perform
any breach of Act even if he had no knowledge about the contravention because this section
imposes due care of the undertaken directors. This bounds the directors find every legal
compliance and contravention made by the company (Moriarty, 2018).
“Question 5”
a) The business judgment rule can be applied to the decisions taken by the directors regarding the
requirements of the corporation act if the decision is taken by the director in the good faith of
business and the director have no personal interest in the subject matter of the judgment. Also the
director should have the rational belief that the decision is fit for company.
b) While making the decision about the applicable rule of judgement in any decision taken by the
director, the Judge shall oversee the interest of such director of judgement (Business service
online., 2019).

Law 4 | P a g e
References
ASIC Company details portal (2019), retrieved from
https://asicconnect.asic.gov.au/public/;jsessionid=kqF-
8ORePomRloknZ1s1hzXuRNhSiPGPLznh4XzvTJraOq_z7NxN!-780881167?
_afrLoop=2621594034397224&_afrWindowMode=0&_afrWindowId=null&_adf.ctrl-
state=93xg5h5ni_1
ASIC Connect, (2019), retrieved from https://asicconnect.asic.gov.au/public/;jsessionid=kqF-
8ORePomRloknZ1s1hzXuRNhSiPGPLznh4XzvTJraOq_z7NxN!-780881167?
_afrLoop=2621594034397224&_afrWindowMode=0&_afrWindowId=null&_adf.ctrl-
state=93xg5h5ni_1
Business service online (2019), retrieved from https://asic.gov.au/online-services/business-
names/
Moriarty, R. (2018). Asic highlights the importance of annual general meetings and recent trends
in corporate governance. Governance Directions, 70(2), 77.
Vanhaverbeke, W., Belderbos, R., Duysters, G., & Beerkens, B. (2015). Technological
performance and alliances over the industry life cycle: evidence from the ASIC
industry. Journal of Product Innovation Management, 32(4), 556-573.