Australia Corporation Law assignment Questions Solved

Australia Corporation Law assignment

Table of Contents

Question 1 2

Question 2 3

References 5

Question 1

Issue

It is identified from the first case study that EagleFly Aviation Ltd. that is a public corporation listed on the ASX has faced downturn and loss in profit due to poor performance and changes in global flying habits. The share price has fallen and therefore, as a shareholder, Harry has decided to actively campaign against the current board of directors contacting all members of the company. He has asked the members to direct their proxies to him at the next AGM.

Rule

Section 250A of the Corporations Act 2001 will be applicable in this context

Application

The above sections of Corporations Act 2001 is applicable for Harry to call a general meeting or AGM for voting out the board of directors of EagleFly Aviation Ltd. section 249X and 249Y helps Harry to select proxies to vote him to remove the current chairman of board. As he is a member of the company, he can act for the benefits of the company and gain remuneration for reducing share prices. However, 28 days’ notice period, 5% of vote of the members to hold this meeting and signed proxies with written documents are required for Harry to hold AGM for removing the current chairman. However, as it is a public company, elections for directors can be held by EagleFly at AGM.

The members can be conducted by Harry either in the written or verbal manner, though the proxies would be required to be obtained through the signed documents along with the name and address of the members, name of the company, name of the proxy, and the meeting during which he will use an appointment (Legal Vision. 2020). This is required to be in accordance with the 250A of the Corporations Act 2001 (Australasian Legal Information Institute, 2020). It is important to mention that there is no such express mention about any clause within Corporations Act 2001, therefore the ultra vires doctrine will be applicable unless there is a mention of any clause. However, if there is a clause mentioned in the constitution the company can prevent any member from contacting other members regarding proxy.

Conclusion

In conclusion, Section 249 and 250 of Corporations Act 2001 is effective for Harry to call AGM after contacting the members but the board of directors can hold EagleFly Aviation can prevent it.

Question 2

Issue

The second case study depicts that OldSkool Pty Ltd mountains old-fashioned ‘memorandum of association’ and object clause of this memorandum limits development, manufacture and sales of commercial computing devices. Therefore, Josie has intended to develop remote office management software to automate computing needs and improve home working environment. However, as memorandum hampers company’s ability to develop, Josie states that memorandum is not required but other stakeholders state that this is a standard form of company.

Rule

The replaceable rules are applicable in this context under Section 141 of the Corporations Act 2001 (Australasian Legal Information Institute, 2020). In carrying out the repeal, it is required to be conducted based on the provisions under Section 135(2) of the Corporations Act 2001.

Application

Taking the validity of the memorandum of the association under consideration, it has been identified that the registered companies within Australia are no longer expected to maintain articles or memorandum after the replaceable rules have been introduced in the year 1998, July 1st. It is required to be noted significantly that prior to the introduction of the replaceable rules companies that were operating with memorandum and articles as a constitution can maintain the same. Based on the current case scenario, it can be stated that Oldskool will need to amend the memorandum of association if it requires entering new contracts. Also they can repeal their existing constitution and rely on the Replaceable rules under the section 141 of the Corporations Act 2001 (Australasian Legal Information Institute, 2020). In repealing activities need to follow the Section 135(2) of the Corporations Act 2001.

Another concern within this case is the method through which the replaceable rules will be helpful for the company in future. The current discussion will include the entitled convenience with the implementation of the replaceable rules. It can be stated that modifying the memorandum will be time consuming and inconvenient. However, implementing the replaceable rules will be more cost effective and convenient as compared to the modification of the memorandum. It will also open up the opportunities for the company to be involved in operations that are beyond the scope of the existing memorandum of association; that in the case of current company was limited into selling of computing devices. Apart from that, the replaceable rules will allow the company to switch back to the constitution if the replaceable rules become ineffective. Private companies like Oldskool Pty Ltd needs to provide 21 days notice for reincorporating the constitution through conducting a general meeting.

Conclusion

The remote office management development and providing mobile applications would not be possible if the company decides to adhere to the memorandum of association. However, if the replaceable rules are incorporated, these can be adopted by the company.

References

Commonwealth Consolidated Acts (2020). CORPORATIONS ACT 2001. Retrieved 28 July 2020, from http://www5.austlii.edu.au/au/legis/cth/consol_act/ca2001172/

Federal Register of Legislation (2020). Corporations Act 2001. Retrieved 28 July 2020, from https://www.legislation.gov.au/Details/C2017C00328

Federal Register of Legislation (2020). Corporations Bill 2001. Retrieved 28 July 2020, from https://www.legislation.gov.au/Details/C2004B00937

Legal Vision. (2020). What are Memorandum and Articles of Association?. Retrieved 24 July 2020, from https://legalvision.com.au/q-and-a/memorandum-and-articles-of-association/

Australasian Legal Information Institute. (2020). CORPORATIONS ACT 2001 – SECT 250A Appointing a proxy. Retrieved 24 July 2020, from http://www5.austlii.edu.au/au/legis/cth/num_act/ca2001172/s250a.html

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