Commercial And Corporate Law Developments

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Commercial And Corporate Law Developments

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Commercial And Corporate Law Developments

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Question:

Discuss About the Commercial and Corporate Law Developments?

Answer:
Introducation

As per the case study, Feng, Qiyuan and Linda all there are directors of Darwin Property Developments Pty Ltd. they have equal shareholders in the company. Feng and Qiyuan are brothers and co-founder while Linda is the another partner of the company. Each of the partners have equal shareholder of 2000 shares. When Feng’s wife was suffering from several illnesses, he missed some important board meetings. Now, when he have sort of money, he asked to other directors about the dividend share amount from his share but they refused to give that. However, he want check the company’s financial statements at the time when he about to resign from the company again the other directors denied to provide that. At last, he discovers that a third party providing a large amount of accounting service fees to other directors he thinks that they are cheating upon him. Therefore, he wants to take legal action against them.
As per the Corporation Act 2001 in Australia, a director has a duty of loyalty and the duty of care to the other directors and the company. The directors of the company have also direct shares of the company. Therefore, they have the shareholders of the company too. As per thye sec 180 of the Corporation Act, the duties of the directors have:
The directors will do their duties and power with duties with care and trust ton the employee and the company.
They have duties to complete all the tasks with loyalty and best interest of the company.
The director will never provide false or improper information for gaining their position and the profits.
They will always prevent the company if it is unable to pay the debts.
They will always maintain the financial records and performance of the employees.

As per sec – 198A defines the powers of directors. The directors have powers to manage the company or the corporation. They can issue the shares transfer the money and issue the debentures. Sec- 198D define that a director has powers to delegate their powers
Sec- 197 defines that the directors have liability for the debts and if any obligations arise corporation as trustee of the company incurs that. When a person becomes a director of the company he must incur the liability in perform or acted in the company as a trustee and he liable for the every separate and joint transactions (Lancaster, Hughes and Ritter 2016).
Sec 198E defines that the director of a company who is a shareholder also can use all the powers of the company when the general meetings took place. The company should manage by the instructions given by the director. The director of the company hold the share also can sign, draw, accept, and endorse a negotiable instrument in the company. The directors can confirm that the negotiable instrument can be signed, drawn, accepted and endorsed in a different way in the company.
The dividend share is distributes by the company to the shareholders. Dividend share is the form of profits of the company. The shareholders who have shares in the company they only get the dividend amount from the profit. In some company, the dividend amount can reinvest for purchase of the share.
As per the case study, the directors of the company are not truthful to each other. Feng have the equal share as the Qiyuan and Linda have. Therefore, if they got their share of dividend amount from the third party then Feng have then same right to get the dividend rights from the company. Therefore, other directors have breached the duties towards Feng. When Feng want his dividend share from the company, they denied giving the amount. The dividend amount is the rights of a director and as well as the shareholders. The shareholders when buy the shares the dividend amount become their common rights. However, Feng can sue the other directors for not proving the dividend amount to Feng (Knepper et.all 2016).
However, Feng not able to attend the important meeting because of his wife’s illness but it is duty of other directors to provide all the information to Feng. Qiyuan and Linda do not want to include. They told him lies that the company is not now able to give the dividend amount because that will be use for the reinvestment for the business in the company. They also discussed that Feng is affected with his personal problems and not interest with the investment of the company. However, they suggest him to resign from the business. If Feng resign from the business, the company must pay his entire share amount and the dividend, which is the common right of a shareholder. Here, as per the case study, before resign the company he claim his dividend amount and the other directors denied to give the dividend amount as per the interest of the business. Before resign the company, again he asks for the financial statement of the company. As a director of the company, he has rights to check the financial statements of the company and other directors are bound to provide the details to the director who holds the equal share in the company with the other directors (Lancaster, Hughes and Ritter 2016).
Feng can demand to check the financial statements of the company. The other directors are never denied to provide to give the information because he is still in the position of director of the company.

According the case study, Feng later discover that other directors are paid a large amount of accountancy service fees by a third party without provide the knowledge to him. Therefore, they cheat him. There are three directors of the company. Each of them has duties to provide every information to each other’s. Here, the other two directors breach their duties and involved themselves in unethical conduct. The directors need to involve Feng before they intimate with the third party. The two directors breach their duties towards other director.
Dividend is the amount, which distribute to the shareholders from the profit of the company. The service fees that other directors getting, Fend also have share in the fees. Without notifying, him who is the director of the company and the holders of equal share in the company, other directors never took such decision in this. The management of the company breached their duties with Feng.

According the Corporation Act, Feng can take legal action against the company and as well as the directors. He has rights to take legal actions. He holds a position of a director in the company and other directors have cheated with him. Therefore they breach the duty of care toward the company and as well as the director. If Feng take any legal actions against both of them then he will be successful. At the time of employment, he missed some import5ant meetings because he has valid reason of his wife’s illness. Therefore, the management of the company breaches the duties of the directors. Feng can demand to check the financial statements of the company. The other directors are never denied to provide to give the information because he is still in the position of director of the company. The directors misuse their power toward the other directors while it is against the law of Corporation Act 2001. Feng who has equal share in the company can claim his dividend portion from the profits. The directors of the company are not truthful to each other. Feng have the equal share as the Qiyuan and Linda have. Therefore, if they got their share of dividend amount from the third party then Feng have then same right to get the dividend rights from the company. The directors of the company are not truthful to each other. Feng have the equal share as the Qiyuan and Linda have. Therefore, if they got their share of dividend amount from the third party then Feng have then same right to get the dividend rights from the company. The shares are must be paid in full payment. The Darwin Property Developments Pty LTD is the company of property development, which is, operates seafood restaurant. The dividend share is distributes by the company to the shareholders. Dividend share is the form of profits of the company. The shareholders who have shares in the company they only get the dividend amount from the profit. In some company, the dividend amount can reinvest for purchase of the share (Knepper et.all 2016).

As per the case study, a conclusion can be conducted that Feng has rights to take legal actions against the others directors. if he take legal action against them he will be successful in the actions. The Corporation Act 2001 of Australia have give rights to the directors not only to apply their powers in the corporation but also implement the powers properly. As per the case study, Feng is the director of the company and he can use his powers in the corporation and upon the managements.

References
Drolet, B.C., Khokhar, M.T. and Fischer, S.A., 2013. The 2011 duty-hour requirements—a survey of residency program directors. New England Journal of Medicine, 368(8), pp.694-697.
Knepper, W.E., Bailey, D.A., Bowman, K.B., Eblin, R.L. and Lane, R.S., 2016. Duty of Loyalty (Vol. 1). Liability of Corporate Officers and Directors.
Lancaster, K., Hughes, C. and Ritter, A., 2016. ‘Drug dogs unleashed’: An historical and political account of drug detection dogs for street-level policing of illicit drugs in New South Wales, Australia. Australian & New Zealand Journal of Criminology, p.0004865816642826.
Mackay, W., Shan, Y.G. and Howieson, B., 2015. The effect of board and chairperson independence: an examination of CEO dismissal in Australia. International Journal of Accounting, Auditing and Performance Evaluation, 11(2), pp.130-160.
Ng, T.K., 2015. DIRECTORS’DUTY NOT TO PREFER ONE CREDITOR TO ANOTHER. The Cambridge Law Journal, 74(01), pp.20-23.
The corporation Act 2001
Tortia, E., Haly, M.K. and Jensen, A., 2015. From the Neoliberal to the Participatory Firm: employee participation through industrial relations and governance in Australia and Italy. Cooperative Enterprises in Australia and Italy, p.137.

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