Company Contract: Constitutions and Director Role

Comp whatsoever Contract Constitutions and Director RoleQuestion 1.Is the specialize enforceable against Beanstalk Ltd owing to the point that Jack did not adjudge the capacity to enter into that kind of induce?Employees of a political party fetch a clear man conflict on their powers and this be usu on the wholey recite portray away in the in the articles and memorandum of association of a given party. The corporation act has execute in handy to address this scenario. slit 124 dwells on the powers of the troupe and its legal status. Sec 124 (2) provides that a beau monde legal capacity to do a particular thing is not affected by the fact that the caller-up interests are not served by doing it. Section 125 of the CA is to the effect that a caller-out organisation whitethorn have an express restriction on the way a follow whitethorn exercise its powers. Suffice to note that the exercise of a power by the family is not hamper merely be spring it is wayward to an e xpress restriction or prohibition in the confederations musical composition. subsection 2 is to the effect that an act d superstar by the phoner is not invalid merely because it is contrary to or beyond all objects in the political partys constitution.Sec 126 is to the effect that an agent institute by the bon ton and he has the power to nominate, vary, ratify or discharge a contract. The person may be exercising express or implied authority and on behalf of the company. The power may be exercised without utilize a common seal. The court always takes the view that the duty to act in good cartel in the best interests of the company means that the film directors must act in the interests of the shareholders as a collective group as illustrated in the Greenhalgh v Arderne Cinemas Ltd1. In addition to the above sections, section 128 entitles one to make assertions in section129 in relation to dealings with a company. The company is not entitled to assert in proceedings in relation to the dealings that any of the assumptions are incorrect. Section one hundred thirty on the new(prenominal) hand is to the effect that a person is not taken to have information about a company merely because the information is operational to the public from ASIC.Section 128(4) is to the effect that a person is not entitled to make an assumption in section129 if at the time of the dealings they knew or hazard that the assumption was incorrect. Section 129(b) details the presumption in section 128. Section 129(2)(b) is to the effect that one may have that a director has authority to exercise the powers and perform the duties customarily exercised or performed by a director or company secretary of a similar company.In our expression scenario Beanstalk is obligated to pay level(p) if Jack surpassed his powers unless they git prove that Giant ltd were aware of the limitations imposed on jack and they disregarded them.The Beanstalk constitution was available in the publ ic record and Giant ltd had an obligation of knowing and complying with the con tentsSection 130 of the CA serves to address the act of notice on the limitations imposed on the directors or agents of the company. It provides that the company shagnot hunt liability on the premise that the person dealing with the company should have been aware of the limitations. The two Sections notwithstanding before section 130 are of the following effect Section 128(4) is to the effect that a person is not entitled to make an assumption in section129 if at the time of the dealings they knew or suspected that the assumption was incorrect. Section 129(b) details the presumption in section 128. Section 129(2)(b) is to the effect that one may assume that a director has authority to exercise the powers and perform the duties customarily exercised or performed by a director or company secretary of a similar company.virtuoso also need to consider at the organic theory which states that where the age nts of the company acts within the fountainary of powers conferred to them by the company constitution or replaceable rules, consequently they are deemed as cosmos the company itself as was illustrated in Northside Developments Pty Ltd v Registrar-General2. however this may always turn out not to be true as was espoused in the case of Smorgon v Australia and New Zealand Banking Group Ltd3, where it was observed that much(prenominal) an act requires the attri plainlyion of mental states to corporationsCompanys legal capacityAt common law the company could alone enter into legal obligations only if its constitution so authorizes. Any part to the contract was deemed to be aware of any restrictions contained in the constitution of the company. Capacity is catered for at a land place Corporations bear 2001. Section 124 accords the company the same legal capacity as an exclusive and this encompasses power to make an agreement. S 125is to the effect that performance of an act inc luding entry into an agreement by the company testament not be invalidated merely on the premise that its beyond the power of the companys constitution. Thus Giant confine will not be stopped from staking it claims of payments merely because Beanstalk limited had made it constitution public as provided for downstairs s125. Section 128 and 129 are to the effect that where one enters into any dealing with the company on the belief that he is dealing with the right person, then the company will have to honor its obligations. Thus despite the constitution being made public, section 129 and 130 states that the company is still bound by the acts of it officers who are duly appointed to carry out much(prenominal) a task. Thus beanstalk will have to prove that despite Giant ltd being aware of the limitations, they violated what was in the public do principal(prenominal).Question TwoPan Ltd is a company without a constitution. At a members get together five items of line of merchandis e were passed as special resolutions and placed in a new constitution of the company. These werethat divid stopping points puke only be paid if they have been recommended by the directors and declared by the membersDividendsDividends are the payments made out to shareholders when the company is a going concern and if the directors have approved such payments. They can only be paid if the company assets are sufficiently in excess of its liabilities immediately the dividend is declared and if the dividend is fair and sensible to the company shareholders as a whole and this does not prejudice the company ability to pay its creditors. This is governed by sections 254T and 254U.(b) That the stir of shares in the company requires the approval of the directorsTransfer of sharesA shareholder in a company who wants to terminate his race with the company may decide to offload his shares by way of sale. The shareholder may encounter some difficulties if he wants to sell the shares to an ou tsider of the company. Some of the difficulties which may arise chthonic the replaceable rules areThe directors have the discretion to refuse to transfer the shares andThere might a restriction in the company constitution (if any) on shares transfers. Sections 707. Section 140(2) stipulates that a member may refuse to be bound by modifications after be approaching a member if such a modification imposes or increases restrictions on the right to transfer the shares already held by the member, unless the modification is made or (i) in connection with the companys change from a public company to a proprietary company under Part2B.7 or (ii) to insert proportional takeover approval provisions into the companys constitution.Thus the discretion of shares transfer lies with the directors unless a contrary intention as envisaged in section 140 (2) is adduced.that Wendy Weird be a director of the company for lifeThe CA doesnt set the specific time for retirement of directors. One can only fa il to serve as a director under the circumstances contemplated in Part 2D 3 of the CA. this can be removed by members through the annual ecumenic meeting, through resignation or incapacity. To this end one can be a director for life.Those directors of the company are to be appointed by Wendy WeirdA director may appoint new(prenominal) director under section 201 H (replaceable rulesee section135). A person can be appointed as a director with a view of the company establishing the requisite quorum for a directors meeting. Section 201J provides that the directors of a company may appoint 1 or more of themselves to the office of managing director of the company for the period, and on the terms (including as to remuneration), as the directors see fit. To this end Wendy can be appointed under the conditions envisaged in the above sections.That the directors may issue the companys shares only with the approval of the members.Directors have the powers to issue new shares as provided for under section 254D. Before issuance of new shares of a given class, the directors of a proprietary company must offer them to the alive shareholders of that class. The directors must give the shareholders a recital displace out the terms of the offer.Question ThreeIn ready to obtain the funds necessary to dilate its business Growth Ltd is to make a $M20 share issue. Advise the directors of Growth Ltd over the following matters. demandCan the funds be dress downd from existing members or anyone else without a prospectus? (2 marks)There are several ways of raising funds by companies in Australia. Public companies (i.e. those with more than 50 non-employee shareholders) can raise funds from the general public by issuing securities. Private companies (ie proprietary limited companies that have no more than 50 non-employee shareholders) on the other hand can raise fundsFrom existing shareholders and employees of the company or a subsidiary company, and from the general public if th e fundraising does not require a revealing document. Section 708 is to the effect that any personal offers of a body of securities do not require manifestation to the investors. But this doesnt apply to offers which might amount to indirect issue.Vital documents one is supposed to give potential investors when raising funds? As a general rule of procedure, if a public company is desirous of raising capital or offering securities for sale (for example shares or debentures) a revealing document must be availed to the potential investors. This is document whose main purpose is to describe all regulate fundraising documents for the issue of securities (for example shares or debentures).All companies which are allowed to raise funds can use a prospectus. A company also relies on an offer information statement or a visibleness statement and this is informed by the type of fundraising one intends to carry out and whether the restrictions imposed by honor of using these documents are s atisfied.Offer information statements An offer information statement (OIS) has in it a lower threshold for divine revelation but can only be used for fundraising up to $10 million. If the company intends to use an OIS then it is required to include a copy of an audited financial report with a equipoise date within the last six months.Profile statements This is a document which sets out limited rouge information in relation to the company and the offer. This kind of statements can only be relied upon if ASIC has approved their use. To this end a company can raise funds from without reliance on the prospectus. In summary, a disclosure document is not required whenan offer is a personal offer, and ifoffers or invitations have been made to less than 20 persons in the previous 12 months, andthe new offer will not result in more than $2 million being raised in that 12 monthsNote you must not advertise the offer when you rely on this exemptionthe offers are made to specified people who are presumed not to need disclosure because of their financial capacity, experience, or wholesale statusthe offers are made to original holders of the securitiesno money or other form of payment is payable for the securitiesother disclosure regimes under the Corporations Act apply (i.e. takeovers, schemes of arrangement)The offer is made by certain types of financial institutions.Will the directors be unhazardous from prosecution if they provide to investors in a prospectus ein truththing they know that is relevant about the investment? (2 marks)The Corporations Act does not detail out everything that ought to be included in the prospectus. But section 710 is to the effect that a prospectus must contain all information that the investors (and their professional advisers) would reasonably require, and reasonably expect to regard in the prospectus. This information should be availed so that the investors can make an informed assessment of material matters relating to the company an d these do include The assets and liabilities, financial position, profits and losses and prospects of the company. The rights attaching to the securities being offered.Some other information such as terms and conditions of the offer, disclosure of certain payments made to the directors and advisers in connection with the IPO and the expiry date of the prospectus must be contained in the prospectus.To this end the directors will be immune from prosecution as they will not have breached any requirement bestowed on them.If the company issues a prospectus and the directors then become aware that there is a false and misleading statement in it, what alternatives are available to them under the CA? (3 marks)Where a company directors have become aware of a false or misleading statement in the prospectus which has already been issued to the public, the can petition the ASIC to issue Stop Orders. though these are the preserve of the ASIC to issue this can be sought so that the issues can be find out on time.Stop rescripts what they are and when we will issue one section 719 A stop order is an administrative mechanism that allows ASIC to prevent offers being made under a disclosure document where we call up it containsa misleading or deceptive statementan omission of information required to be provided under the legislation, ora new circumstance has arisen since the disclosure document was lodged.Where a stop order is issued on a disclosure document, then the company is not allowed to offer, issue, sell or transfer its shares while that order is in force. An interim stop order may be sought for up to 21 long time during which time the company will be accorded a hearing to put across its views to an in parasitic delegate. Its after the hearing that the interim stop order may be lifted or a final stop order on the disclosure document may issue. .Does the CA provide any protection for directors where funds are raised under a prospectus that contains a misleading state ment? (3 marks)The liability for directors under corporation falls under section 1308, which provides inter alia that misleading misstatements amounts to a criminal offense and such an offence, is one of strict liability. The CA offers protection to directors by availing the following refutations. There are a range of defences available to potential civil and criminal liability, some of which include The due diligence defence, that is, that the person has made all enquiries which were reasonable in the circumstances and having made these enquiries, they believed on reasonable campaign that a statement was not misleading or deceptive or that there was not a material omission from the prospectus. Where a new circumstance has arisen and it can be established that the person was not aware of the new matter. Establishing that the person reasonably relied on information provided by someone outside the company, such as a professional adviser, for statements contained in the prospectusBu t the director should not conceal such information when it comes to his attention.1 1946 1 All ER 512 (CA)2 (1990) 170 CLR 1463 1976 HCA 53Is Globalisation A Threat Or An Opportunity?Is Globalisation A Threat Or An Opportunity?Is globalisation a panic or an opportunity for business? The pigment objective for any business organisation is to maximise profit, if a manufacturing or service industry in any ground is progressive in their field of practice, there peradventure a need for them to invest or open other subsidiary operation in other country where there is a rising demand for their goods or operate Sloma (2004). Furthermore, (Post et al, 1999146) states that globalisation consist of compendium goods from components produced in several nations, buying of raw materials from overseas suppliers or selling finished goods or services to customers in other countries, also (BBC, 2011) defines globalisation as the involvement of the world becoming highly link up as a result of in creased cultural and contend exchange. Therefore this essay would explain the cause/effect, opportunities and threat of globalisation on businesses.The main causes of globalization may patronage liberalisation, transportation, and communication (Bhagwati et al, 1983). In trade liberalisation, legislation reducing trade and foreign direct investment have been relaxed. Some governments offer tax revenue incentives to persuade overseas companies to invest in their country, this maybe linked to what is known as waive trade (BBC, 2011). Transportation is relatively becoming cheaper, fast and easy to access. People travel for holiday, business, migrate and emigrate from one country to another. transmission linees organisations can ship goods and raw materials between countries more easily make goods and services from all over the world available to consumers. While communication, the net income, telephony and the television have coat way for free flow of information and ideas. O utsourcing is a example these, thence a businesses organisation in a country can have a call centre in another country answering calls from customers of the main country.One of the main effect of globalization is inequality, this refers to the income disparity that exist between countries across the world. It maybe argued that globalisation contributes in creating more wealth in developed countries, thus it does not help to close the crevice between the worlds richest nations and the worlds poorest might King (2005199).The internet can be viewed as an opportunity of globalization for businesses. The internet can also be seen as a gateway to participate in the game of globalization (BBC, 2010). Through the earnings, business organisations have been able to go beyond borders, to reach their end customers with their goods or services, thus this could be referred to e-commerce. Communications can be made quickly and easily to any anywhere in the world, but at the same time business es are exposed to full-size competition, Holton (1998). There are millions of websites on the Internet, despite the seemingly easy participation, the reality of the Internet can be seen as oligopoly, Sloman (2004). Furthermore, with the internet acting a roll in globalization. It may be good for a business organisation to have access to anyone anywhere in the world, but it also exposes the business to competition. In the internet competition, winners are very few, which creates a big gap between the large and tiny business. However, there are still opportunities for beautiful business in the world of globalization. This could be the variety of cultures, languages, social systems and customs, etc.Take the differences of language for demonstrative example. Your website may not be seen by customers if it is only in English. Actually, numerous web pages in the Internet are written in English. However, the business should know there are many languages in the world. If a business we bsite has a page in a different languages, their competitors may be reduced.Another key opportunity for business, is the transfer of technological advancement and knowledge in globalisation. Corsi (2000) points out that this has led to growth in innovation and better techniques of production to business. The main result of this is the growing income and appreciation of the companys economic achievement. Foreign migrants coming to work in multinational companies contribute to the knowledge of growth businesses thus which makes the business more efficient. scotch policies, management techniques and change magnitude knowledge about production methods present invaluable inputs in small businesses (SME) King King (2005).In globalization there are opportunities of cheap hollow for business organisations, thus Jennifer (2005) argues that developing nations are encouraged to open their economies to international trade, with the aim that free trade would bring development and prosperit y. beginning its economy to international trade does not translate to economic development and instant prosperity for developing countries, but rather it signifies the exposure of the developing economy to multi-national corporations and foreign direct investors, many of which seek to diffuse their operations in developing economies because of the cheap motor available in these economies. Growing portions of these cheap labour sources consist of women and MNCs have been accused of intentionally hiring economically and poor educated deprived women to reduce labour costs. With cheap labour a clothing company in the UK can sell a shirt for 60 that cost less than 10 pence in labour to produce.While globalisation may be seen as an opportunity for big businesses, it can also be argued to be a threat to big and small businesses (SME). Carper (2010) argues that energy and transportation costs increases when jobs are outsourced, as big businesses revise their business strategy and produce goods overseas. Customer service often decreases as companies pay for their goods to be transported from a foreign warehouse to their before being dispatched to the customer. Call centers, are also affected by globalization, as its being flooded with clerks who do not speak fluent English. As energy use increases, domestic tally costs increase as more businesses compete for natural resources.Intergovernmental transaction between two countries can have an influence on multinational corporations. For example, If two countries are are war, there will be no trade between them. Furthermore, business operations may be influenced by the political ties of army and home country governments even when there is no war. The United States and Japan have had an important, but difficult, relationship since the end of World War 2. The United States helped rebuild Japans steel, auto industries and shipbuilding , and by the 1970s Japans productivity had increased massively. It used its efficienci es to export steel, automobiles, and semi-conducts to the big U.S. Market. The United States has shifting political relations with Great Britain, China, Russia and Brazil, and many other nations. Economic relations are affected, for better or worse, by political change, and national political priorities shape business relations. The United States, for example, banned U.S. Manufacturing industries from selling military products to countries that government agencies believe may be a threat U.S. Security it restricts high technology exports and it has banned U.S. Companies from doing business dealings in Cuba (Post et al, 1999159).Increased Competition is another main concern, as it is threat to domestic businesses. Government of developing countries are confront with this problem as they look to export more and import less to increase the countrys GDP. Globalisation endanger domestic companies as domestic businesses have to compete with foreign business organisation, they are forced to raise their customer satisfaction levels and standards in order to survive in the market. In addition, In developing countries, this is trouble for domestic companies as they are unable to contend with foreign companies as they are too dependent on the government for funds and therefore lack competitive edge. And also, this is were the government moves in to protect small companies by creating trade barriers and imposing tariffs on imported products. Protectionism does not apply to only developing countries but also developed countries also have the highest trading restrains, Borkakoti (1998).In conclusion, it appears to the author, based on what this essay talks about to point out that globalisation can be an opportunity also a threat to large and small business. Furthermore, globalization has played a big role in the movement of goods and service, making resources available to consumer, it may be argued that globalisation has created global expansion for big business as it ha s paved the way for small domestic businesses to export their goods or service. However globalization has its disadvantages as well, because of its vulnerability to intergovernmental relations (in the case of war) and its opens domestic businesses to foreign competition.REFERENCESAnup, G (1997) E-commerce security weak links, best defenses. Oxford Wiley.BBC (2010) globalisation. Available at http//www.bbc.co.uk/schools/gcsebitesize/geographics/industry/globalisation_rev1.shtml Accessed 14th March, 2011Bhagwati, J. N, Panagariya, A., Srinivasan, T. N. (1983) International Trade. 2nd edn. Massachusetts The MIT Press.Borkakoti, J (1998) International Trade. London Macmillan Press LtdCarper, T (2010) The Threat of Globalization. Online Available at http//www.thaynecarper.com/globalization/ Accessed 20th March, 2011Corsi, C (2000) Innovation and market globalization. Amsterdam IOS Press. pp9Holton, R. J. (1998) Globalization and the nation-state. London Macmillan Press.Jennifer, M. (2 005) The Double Edge of Globalization. Available at http//www.allacademic.com//meta/p_mla_apa_research_citation/0/7/0/6/8/pages70681/p70681-1.php Accessed 14th March. 2011King, P King, S (2005) International Economics and International Economic Policy. 4th edn. New York Irwin/McGraw-HillPost, J., Lawrence, A., Weber, J. (1999) Business and Society. 9th edn. Boston, MA Irwin/McGraw-Hill.Sloman, J. (2004) Essentials of Economics. 3rd edn. Harlow Financial Times Prentice Hall