Prevent the proposed alteration to the constitution

Assignment Help Management Theories
Reference no: EM13301004

Question 1

Cotton Limited holds 89.5% of the shares in Satin Co Limited. The remaining shares are held by Silk and several other small investors. The Board of Satin wants the company to become a wholly owned subsidiary of Cotton Limited as they expect this will result in both taxation benefits and a saving on accounting fees and administration charges of about $230,000. Cotton Limited offers to buy the shares held by Silk and other minority members but they refuse. Arrangements are made to hold a members meeting to pass a resolution changing the constitution of Satin by inserting a new clause 53 "any member entitled to 80% or more of the issued shares may compulsorily acquire all the remaining shares". Silk and other minority members receive written notice of the company meeting together with a proxy form and a valuation certificate stating the shares were worth $2.50 each. Although the offer is fair Silk does not want to sell her shares and wants to start legal action to prevent the proposed alteration to the constitution.

Discuss whether she may succeed in her action.

Would your answer be different if the real reason for compulsorily acquiring the shares from Silk was that she discovered operating a business in competition with Satin Co and was using information gained as a member to take away some of Satin's business?

Question 2Identify and explain how some parts of the Corporations Act allow certain business conducted at company meetings to stand notwithstanding that the meeting has not strictly complied with all the legal requirements of the Act. Please refer to any relevant case law that supports your answer.

Question 3Polyester is a director of Style Pty. Limited involved in making women's clothing. Has she breached any duties under the Corporation Act in the following situations?

Situation 1. She arranges with the company's bank to transfer an amount of $65,000 from the company account into a personal bank account held by her in her own name. She uses the funds to finalise some outstanding personal debts.

Situation 2. As a director she receives information that the company is in a serious financial position. She arranges to transfer a larger amount of the assets of the company over a new proprietary company that she formed with the intention of caring on the same business.

Situation 3. Contrary to a resolution of the Board and notwithstanding established business practice that limits credit to $20,000 she allows a trade debtor (who has a history of bad debts) to exceed its credit limits by $25,000. The debtor fails to pay the outstanding amount of $45,000. Can she rely on the business judgment rule in this situation?

 

 

Reference no: EM13301004

Questions Cloud

What are the main types of political risk : What are the main types of political risk? How might each affect international business activity
Define tail of the myosin molecule acts as a molecular lever : Which of the following are true statements about myosin? Select all the true statements. A. In a muscle cell, myosin tails group together to form a thick filament. B.The tail of the myosin molecule acts as a molecular lever.
Find the comparable interest rate compounded monthly : Find the comparable interest rate compounded monthly if it is 15% per year compounded quarterly.
Determine the area of the parallelogram : The displacement vectors 44.5 cm at 15.0° and 23.0 cm at 51.0° both start from the origin and form two sides of a parallelogram. Find the area of the parallelogram
Prevent the proposed alteration to the constitution : Question 2Identify and explain how some parts of the Corporations Act allow certain business conducted at company meetings to stand notwithstanding that the meeting has not strictly complied with all the legal requirements of the Act. Please refer to..
How far does the skater move : Two skaters, one with mass 65 kg and the other with mass 80 kg, stand on an ice rink holding a pole of length 9 m and negligible mass. How far does the 80 kg skater move
Explain what is the molar mass of a gas that occupies : What is the molar mass of a gas that occupies a volume of 1.5000 L at a pressure of 356 mmHg, a temperature of 22.5 degrees C, and weighs 0.9847 g
What is the recoil velocity of the woman : A woman in a movie fires a gun and is pushed backwards. The mass of the bullet is 0.050 kg and the bullet velocity is +850 m/s. What is the recoil velocity of the woman
Explain what is the uncertainty in its position : An electron (electron mass 9.11 x 10^- 31kg) moving near an atomic nucleus has a speed of 6 x 10^6 ± 1% m/s. What is the uncertainty in its position. 1) 1 x 10^-9m 2) 2 x 10 ^-9m 3) 1 x 10^-11m 4) 2x 10^-11m 5) 3 x 10^-11m

Reviews

Write a Review

 

Management Theories Questions & Answers

  The eight step communication process

Using a suitable example, outline the eight step communication process.

  Discusses the background of the organization

Introduction- main contribution - Making changes to the change- something short here because all members contribute in this section.

  What are pollution credit plans

1. What are pollution credit plans and how do they affect the environment? Are such plans moral?

  Integrate

What is meant by "Integrate" and the potential benefits. • What is meant by "Optimise" and the potential benefits.

  List all the registration system stakeholders

1. List all the registration system stakeholders. How is each group affected?

  Strategic alignment of projects and better estimating

Functional departments priorities or even due to a project manager's coercive skills. These practices erode the very principles that gave birth to the PPM approach.

  Weight in cooking, cleaning, and all duties to survive

RIPStop Outfitters LLC notified all of its director-level employees and above that next week they would be expected to travel to the U.S. Virgin Islands for a 5-day sail. Training on how to sail, along with the expectation that all directors would..

  Political and legal systems affect international business

How political and legal systems affect international business

  Discoss the skills required by the management

Discoss the skills required by the management at different levels of the hierachy to perform their roles. Use a business/service organisation to elaborate your answer.

  Determines whether nature or nurture is most important

What determines whether nature or nurture is most important? Write a brief position paper setting out your argument for the Con side. Con side= Leaders are made, not born.

  Define sexual harassment

Define sexual harassment. Identify and discuss the two major types of harassment, and indicate four actions firms may take to ensure workplaces are free from sexual harassment.

  Large portion of their interests in dacca shares

Dracca's Senior Vice President of Sales, Bob Marley, and one of his sales representatives, Bill Farian, were on a conference call and learned that Dracca's new line of high chairs was going to be recalled the next day. During the call, Farian stated,..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd