A guide to directors’ duties and responsibilities for non-listed public companies and proprietary companies in Australia Contents 1 Executive summary 1.1 1.2 2 Sources of company law in Australia Summary 1 1 1 2 2 2 3 3 3 4 5 6 6 6 7 7 7 8 8 9 9 9 11 12 Common law duties 2.1 2.2 2.3 2.4 2.5 2.6 2.7 Duty to act bona fide (In good faith) in the interests of the company as a whole Duty not to act for an improper purpose Duties of care and diligence Duty to retain discretion Duty to avoid conflicts
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COMPANY LAW AUSTRALIA Question 1: Insolvency The area of law involved in this question: Insolvency trading and director’s duties, under Corporation Acts 2001. A director will engage in insolvent trading in breach of section 588G of the Corporation Acts 2001(Cth) if the company incurs a debt and: a) The company is insolvent at the time of incurring the debt or becomes insolvent by incurring the debt; b) At the time the debt is incurred, there are reasonable grounds for suspecting that
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Diana and Elizabeth are directors is named as Gemsales Pty Ltd. We shall consider this case and discussion in accordance to Australian laws as it mentions to be in Harvard referencing style. The case: The case is about a business which five people start and work upon, the business being at a competitive stage hence the directors plan to expand the business to increase sales and give good competition in the market. For the expansion of the business the directors decided to apply a loan and
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Content 1 Introduction 2 2 Body 3 2.1 How is good corporate governance achieved? 3 2.2 Why is this concept important to Australia? 4 2.3 What are the roles, responsibilities and powers of the Board of Directors, Management and shareholders? 5 2.3.1 The roles, responsibilities and powers of the Board of Directors 5 2.3.2 The roles, responsibilities and powers of the Board of Management 7 2.3.3 The roles, responsibilities and powers of the Board of Shareholder 8 2.4 How does the
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* Duty of care and dillgence – statute law – s180 * S588G imposes a duty upon directors to prevent their company trading whle it is insolvent . s588G requires directors to be continually monitoring the financial status of their coy (* only apply to directors) * S181 – duties to act in good faith in the interest of coy and for a proper purpose * S 191 – duties to avoid conflicts of interest * S182&S183 – not to make improper use of position or information (* apply to employee)
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QUESTION: In ASIC v Healey [2011] FCA 717 at [14] Middleton J stated: A director is an essential component of corporate governance. Each director is placed at the apex of the structure of director and management of a company. The higher the office held by a person, the greater the responsibility that falls on him or her. The role of a director is significant as their actions may have a profound effect on the community, and not just shareholders, employees and creditors. Under the Corporations
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IDIRECTOR’S DUTIES AND OBLIGATIONS Contents The Director’s are under the obligation to ensure the goods were insured in their duty to act with due care and diligence. 1 Area of Law 1 Principle of Law 1 Application of Law 4 Conclusion 4 The Company has been traded into insolvency. 4 Area of Law 4 Principle of Law 5 Application of Law 6 Conclusion 6 The Director’s Liability for insolvent Trading 7 Principle of Law 7 Application of Law 9 Conclusion 9 The Director’s are
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Lec 6: Ch 10 (the role of company directors and other officers and the means by which they are appointed and removed); main focus is on the directors * ‘officer’ and ‘director’ definition- s9, p200 (Morley v ASIC). * ‘director’- a) appointed director regardless of the name given to their position; b) not validly appointed director but acts in position or; c) not validly appointed but the directors of the company are accustomed to act in accordance with the person’s instructions and wishes;
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then, the judge had given the verdict in favor of Forrest and Fortescue Metal Group in the Federal Court. But finally, in the High Court of Australia, the verdict found that both Forest was not guilty and the Company did not breach any sections of the Corporate Act in 2001. BACKGROUND Fortescue Metal Group Ltd (Fortescue), located in Western Australia, was a mining company (Fortescue Metal Group Ltd 2014). Mr Andrew Forest was chairman, chief executive and substantial shareholder in Fortescue
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Part A it will discuss the feature of a fiduciary relationship and disclosure some duties owned by company directors, such as the duty to act in good faith in the best interests of the company, the duty to avoid conflicts of the interest, the consequences of breaching a duty by directors and some defences for the company’s director. After that, in Part B the article will talk about some issues arise from the duties owned by partners in a partnership. In the following parts this essay will discuss
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