Australian Corporation Law

They are liable of facing the civil penalties as mentioned in part 9B of corporation act 2001. The Australian Securities and Investment Commission (ASIC) is the national body responsible for company registration and securities regulation in Australia. Under section 1317J(1) of the Corporations Act, ASIC can apply to the court for disqualifying the directors from managing corporations. Under section 206C of corporate act 2001, court possess a power to disqualify a person from managing affirm for a contravention of a civil penalty provision.

In many misfeasance cases against directors, those breaches maybe relatively uncontroversial. This draws into focus the question of whether the director has any common law or statutory defence, including the Duomatic principle and ratification by shareholders (CA 2006 S.239), available to a claim against him for restitution to the company. S.239(6)(a) preserves the Duomatic rule that if an informal unanimous consent is reached among voting shareholders, it is unnecessary to pass such ratification resolution through general meeting or written resolution. The first part will examine the scope and requirements of this rule to illustrate the validity of such assent. S.239(7) leaves the door open for rules of law, which refers to common law principles, to continue guiding ratification. It will be assessed how these rules impose limitations on the general ratification power conferred by s.239.

According to the pro and contra Section 203D and 203E of the Corporations Act as above, most judges and scholars agree that the procedure of removal directors as stipulated in the Corporations Act provides fairness treatment for the directors who may be removed. However, they still strongly argue whether the Section 203D is mandatory or not. Moreover, they questioned the existence of Section 203E since it eliminates flexibility for companies to make decision particularly in the emergency situation as explained above. Therefore, in order to provide broader perspectives about the relevancy of Section 203D and Section 203E, it is necessary to compare the procedure of removal directors in the Australian legislation with the

* The roles and responsibilities of the board of directors in corporate governance and the way the board affects a company’s operation.

The study conducted by Hardjo and Alireza (2012, p. 4) represented that the independent directors have a few understandings of the company’s circumstances, and make decisions depends on what the management provides (Hardjo & Alireza, 2012, p. 4). Although Gallagher and Bennie (2015, p. 20) contended that the independent directors are likely to express their individual opinions and focus on the interest of the company. Thus, the formation of the directors’ board with a significant number of independent directors might not prevent DSE from the downfall due to reliance on filter information which is not adequate to make decisions (Rankin et al., 2012, p.

Breaches of s180-184 of the Corporations Act 2001 (Cth), and Breaches of Common Law and Equitable Principles

The Australian Securities and Investments launched civil proceedings in the supreme court of New South Wales against James Hardies Industries, its directors and officers. It was found that each of them had failed in his duty to exercise care and diligence and breached the Corporation Act 2001.This case is considered as a landmark decision in Australia corporate governance as it sheds light on role of directors and executives when taking important matters to the board and implementing them.

The corporation laws in Australia are, by and large, borrowed from the UK Company Law. Its legal structure entails a unitary national statute which is the Corporations Act 2001. This particular statute is under the authority of the Australian Securities and Investments Commission (ASIC). However, all corporation legislations are reported to the Treasurer with references being made to the judgement of the courts as is the case in the United Kingdom.

The introduction of the provision of safe harbor on the directors will be having certain obligations on its implementation (Taylor, 2012). The Australian Institute of Company Directors stated that it has been observed where companies went into administration just to avoid the complication of trading insolvent. It further stated that the directors are quite concerned about their own liabilities and their decision making power, which basically obstruct them from choosing trading insolvent (Vadi, Vissak and Olivas-Lujan, 2013). The decision of a director of a company will not be applicable to the company or himself but to the future and present aspect of every person who is involved in the company. Most of the cases notice that the companies are placed in to administration even before it is required due to the structure of the current law (Wardrop, 2011). The Australian Institute of the Company’s Director further laid down that in its opinion, the application of the provision of the safe harbor would actually bring innovative result in the business sector, thereby resulting in increased competition. It stated that will place innovation in the market rather than making a company to struggle, leaving no option in its

This decision is a reminder to company officers of the difficulties which they will encounter if they are found to have contravened their statutory duty of care and diligence and wish to be exonerated from civil penalty.

There is no clear framework of the rules that would cover the contingencies of a ruling to pierce the corporate veil Idoport Pty Ltd v National Australia Bank Ltd. The corporate Veil usually protects owners and shareholders from being held liable for corporate duties. Yet again a decision made by the court to lift that veil and would place the liability on shareholders, owners, administrators, executives and officers of the company without ownership interest. The purpose of this essay is to conduct an analysis on the concept of lifting the corporate veil and to review the different views on its fairness and equitability to present a better understanding of the notion, the methods used was throughout researching the numerous scholars views on the subject, case law and statutes examples, and the evidence provided by the empirical study of Ramsay & Noakes. When we discuss the lifting the corporate veil the first case that pops out is the case of Salomon V A. Salomon & Co Ltd, since the decisions of applying the corporate veil were first formed as a consequence of this case. The idea covers all of company law and distinguishes that a company is a separate legal entity from its members and directors. Furthermore, spencer (2012); have indicated that one of the core principles that followed the decision in Salomon v Salomon was the wide acceptance one man company’s. However In order to form a

Before the Company Directors Disqualification Act 1986 (hereafter referred to as the CDDA 1986), the United Kingdom had two pieces of legislation that contained provisions on the disqualification of directors namely the Insolvency Act of 1985 and the Companies Act of 1985. However, these provisions were consolidated in to one central act namely the CDDA in 1986. This Act lays down the grounds of disqualification of directors such as general misconduct,

Now knowing the whole story, facts and law precedents, the remedies for breaching section 180-183 of the corporations act is a civil penalty provision: s 1317E13. Under ASIC, the penalty for breaching a director’s duty of care is a court order that the director be disqualified from managing corporations.14

In New Zealand, a company must have at least one director who lives in New Zealand or lives in Australia and is a director of an Australian company. The directors are required to provide their date of birth, place of birth and sometimes they need to provide the details of their ultimate holding company. Unlike sole traders or partnerships, the company itself operates as a separate legal entity to its shareholders. It owns its assets and liabilities whereas a sole trader is liable for all the assets and liabilities directly. This feature of the companies is called limited liability, this means that shareholders in the company can only be liable and can only lose the value of their shares and not more than the value of their shares. However on the other hand, directors are liable for the debts incurred by the business if their conduct of the business is believed to be fraudulent, reckless and not in the company’s interest.

This paper will be a literature review that discusses the notion that, the board of directors (the collective) as a self-regulating social system. This will be achieved by a systematic review of a collection of works into the area of corporate governance spanning the birth of the industrial revolution to the modern day. The areas of emphasis will be a view to identifying the key concepts, issues and laws created to better focus the actions of boards. In addition to identifying the locations for each of these developments and how this has led to divergent practices across the globe. Following the review of the literature the author of this paper will seek to discern the current direction and nature of corporate governance into the future.