Corporations Law Tutorial Questions Assignment: HA3021 Analysis

This Corporations Law assignment addresses several key aspects of corporate law in Australia, based on the Corporations Act 2001. It analyzes scenarios related to director's duties, including the misuse of company funds, the business judgment rule, and the responsibilities of directors. The assignment also explores shareholder rights, membership, and the implications of share buybacks for proprietary companies. Furthermore, it examines fundraising methods and the legal obligations of companies when raising capital. The assignment covers the legal implications of various corporate actions and provides insights into corporate governance, ensuring compliance with relevant legislation and regulations. The document provides comprehensive answers to tutorial questions, demonstrating an understanding of the core principles of Australian corporations law and applying them to practical situations.

Corporation’s law

TABLE OF CONTENTS
MAIN BODY...................................................................................................................................1
WEEK 6 - QUESTION 1.................................................................................................................1
WEEK 7 - QUESTION 2.................................................................................................................1
WEEK 8 – QUESTION 3................................................................................................................2
WEEK 9 – QUESTION 4................................................................................................................2
WEEK 10 – QUESTION 5..............................................................................................................3
REFERENCES................................................................................................................................4

MAIN BODY
WEEK 6 - QUESTION 1
The Corporation act 2001 of the Australia, focuses on regulating companies and
incorporations like acquisition of shares, derivatives and securities. They tends to form a uniform
regulatory scheme which applies at all states and territory of Australia. As per the situation 1,
Polyester transfer an amount of $65000 from the company bank account to the personal bank
account. The director cannot use its position for any sort of improper purpose (McQueen, 2016).
Using the funds for mitigating the personal debts is considered to be as a bad practice. This can
result in various set of rising issues like tax problems, operational and legal issues. It makes it
difficult to manage the cash flows of the company and also erodes personal liability protection.
The key duty of the director of the company is to make operational and strategic decision of
organization because they are highly responsible for ensuring that the statutory obligation of the
company has been met. Hence, in situation 2, the director has breached duty of director. In the
situation 3, the Polyester cannot rely on the business judgement rule because she has breached
the duty of director and has exceeded the credit limit which the debtor fails to pay. However, it’s
the duty of the director to act with care and due diligence and to also act in a good faith. It is the
key duty of the director to effectively act within the powers and working within the welfare of
the organization.
WEEK 7 - QUESTION 2
A member or shareholder of the company is considered to be as a person who collectively
becomes a part of the organization as a corporate entity. A member is considered to be as a
person who tends to hold shares within the organization. A shareholder is a person who is
considered to be as a part owner of the company. The membership to the company is applied to
nominated representatives and not to all the staff of the organization. A person can be ceased to
be a member of the organization in case the person transfers the shares to any other person. Then
the name of the person as member is removed (Blakey and et.al., 2016). The person can become
a member of the company by subscribing to shares, transfer of shares, transmission of shares,
subscribing to memorandum of association, etc. The person is ceased to be a member of the
organization if the company enforces its lien for unpaid calls then the membership of the
member tends to cease within the company. As per the Australian Corporation Act, all the
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companies must at least have one member. In proprietary firm no more than 50 members. There
is no limit to the number of members associated with the public company.
WEEK 8 – QUESTION 3
Vesna has complete knowledge related with the building industry and the way the company
tends to work. Sergey has not been performing its duties in a rightful manner by not complying
and reading the key financial statements of the company and taking appropriate decision. Sergey
has also the long history of depression which tends to affect the decision making capability of the
individual. The common law duties of the director is to effectively exercise the duty of discretion
(Davison, Monotti and Wiseman, 2015). The director must use informed and independent
judgement in order to effectively manage the company. Moreover, the director within the
common law is under a duty to effectively exercise power for a specific purpose. The director
within the organization is highly obliged to avoid conflict of interest within the company. The
statutory power of the director is to make call for the unpaid money on shares. Zavid and Mikhail
has been performing its rightful duties in a legal manner by improving the financial wellbeing of
the company. There key duty is to supervise and lead the specific area of the organization. It is
the key significant duty of the director exercise within the reasonable care, respect, skill and due
diligence.
WEEK 9 – QUESTION 4
A proprietary company is considered to be as a form of privately held organization within
the Australia which can be limited and unlimited. The shares are not offered to the general
public within a proprietary company. Buyback of the shares tends to have large degree of various
implications on the company. The legal implication to buy back the shares of the small holding
within the company can be done if this is authorized by the Article of association. It should be
significantly approved by the shareholders and boards of the organization (Sornarajah, 2017).
Joe can effectively put the resolution that, the smaller holding can be bought out and they have
the belief that, the smaller directors have little interest within the working and operations of the
business. The buyback of the shares must not exceed 25 percent of the paid- up equity share
capital within the single financial year. Post the buyback of the shares, the director must also
ensure that, the debt equity ratio of the organization must not exceed 2:1. The company can also
not withdraw the offer of the buyback once the offer has been declared. All the shares or any
specific set of securities cannot withdraw the offer of the buyback once it has been declared.
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Moreover, all the shares or any specific set of securities for buyback must be full paid- up
(Blakey and et.al., 2016). Hence, these are considered to be as the key legal implication within
which the Joe must comply with while buying the smaller shareholding of the organization.
WEEK 10 – QUESTION 5
The Corporation act 2001 of the Australia tends to regulate the fundraising activity which
tends to include all set of financial products which has been offered within the country. Flywell
Ltd wish to induce each investors of company to invest around $10,000 within company in
exchange for shares. The Flywell Ltd Company aims to raise between $9 million and $11 million
in new funds. There are various set of fundraising methods within which the company must
comply which includes debt financing, strategic investment, equity crowdfunding, revenue based
financing, etc. The fundraising activity tends to comprise of various set of financial products and
securities such as securities, superannuation, derivatives, general and life insurance, carbon units,
margin lending, deposit accounts and various ways of payment facilities. This way it is highly
crucial for the owner of the Flywell Ltd Company to effectively comply with the fundraising
obligations which has been complied with the Corporation act 2001 (Clibborn and Wright,
2018). Complying with the corporate finance documents and various other fundraising
restrictions is considered to be of utmost importance which helps in the higher attainment of
carrying out the fundraising activity. Lodging of the corporate finance and fundraising
documents with the ASIC. The company must effectively comply with the Memorandum of
association and article of association which in turn eventually leads to higher operational growth
and sustainability. The corporation act is considered to be as the principle legislation which is
useful in complying with the key operations of the fundraising activities. The management of the
company must comply with the various corporation law and pass resolution in order to vote for
the best approach for fundraising.
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REFERENCES
Books and Journals
Blakey, R.V and et.al., 2016. Bat communities respond positively to large‐scale thinning of
forest regrowth. Journal of Applied Ecology, 53(6), pp.1694-1703.
Clibborn, S. and Wright, C.F., 2018. Employer theft of temporary migrant workers’ wages in
Australia: Why has the state failed to act?. The Economic and Labour Relations Review, 29(2),
pp.207-227.
Davison, M., Monotti, A. and Wiseman, L., 2015. Australian intellectual property law.
Cambridge University Press.
McQueen, R., 2016. A social history of company law: Great Britain and the Australian colonies
1854–1920. Routledge.
Sornarajah, M., 2017. The international law on foreign investment. Cambridge University Press.
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