- What will a company’s internal governance rules typically deal with?
- Name the two organs of a company. What determines the division of power between these organs?
- (Problem) Kiewa Pty Ltd has 3 shareholders:
A 10 shares
B 20 shares
C 70 shares
C wants to appoint his daughter, Anne, as the sole director of the company. Anne is currently living in Israel. Anne was recently released from prison after serving a 6 month sentence for stealing money from her former employer to pay her gambling debts.
C also wants to change the company constitution to provide for any directors to only be able to be appointed with his consent.
B is unhappy about C’s plans and instead wants C removed as a director of the company.
a) How can Anne be appointed as a director?
b) Are there any legal impediments to Anne being appointed as a director?
c) How can C be removed as a director?
d) How can C make the changes to the Constitution he proposes?
e) Would your answers to any of the previous questions be any different if the company was a public company?
4. How can a company be liable for wrongs?
5. Which crimes can companies commit?
6. The tort of deceit involves the knowing misrepresentation of some fact upon which the victim relies to their disadvantage. Fred is the sales manager for a land development company. He knows that a particular piece of land is flood-prone but tells a purchaser that it is not flood-prone. He has committed the tort of deceit. However, he does not have much money and the cost of rectification of the problem is large. Can the purchaser sue the land development company? What techniques of tortious liability might make the company liable and which might not make it liable?
7. What is the indoor management rule?
8. How do the statutory assumptions assist an outsider who has contracted with a company?
9. How do the statutory assumptions operate if a document is forged?
10. Peter is bankrupt and therefore cannot act as a director of a company. Nevertheless he does so. Bruce is the managing director of the same company. Bruce gives Peter a letter addressed to the other party to the contract saying that that Peter has authority to enter into a contract. Bruce, however, privately tells Peter that he is only to negotiate the contract, but is not to enter into it. Nevertheless, Peter signs the contract as agent of the company.
Is the company bound? Give your reasons.
Would it make any difference to your answers if the other party was aware of Bruce’s lack of authority to enter into the contract?
