Background information

Sweet, Ness and Light Pty Ltd has been making chocolates in Perth since 1923. The company was commenced by Ivan Light (now deceased) and has had a member of the Light family as chair of the board ever since. At present William (Bill) Light is the chair and he holds 30% of the shares. The other shareholders are Bill's sons Jack (20% of the shares) and Daniel (20% of the shares) and their wives, Yvette (10% of the shares) and Jacinta (10% of the shares). There are two non-family shareholders, the long- time company secretary Maxwell Sweet (5% of the shares) and Ivan Light's former business associate Elliot Ness (5% of the shares).

The directors of the company are Bill (Chair), Jack (Managing Director), Daniel (an architect), Yvette (an accountant), Maxwell (also secretary of the company) and Elliot (an irregular attender of meetings).

Jacinta has long harboured feelings of powerlessness as Bill's sons lamely follow whatever their father wants in relation to company matters. Maxwell maintains absolute loyalty to Bill when it comes to company decisions and Elliot takes no active interest in the company.

Additional Facts for your task

At a general meeting last week, members voted on Bill's proposal not to pay dividends out of recent profits, but to reinvest them. This is the fourth year in a row that Bill has done this with members approval.

In another resolution, the company decided to restructure its shares. There are to be additional shares that will only be available to Bill, Jack, Daniel, Maxwell and Elliot. The reason that Yvette and Jacinta are excluded is because they are seen as threats to the company if their marriages to Bill's sons should fail. Maxwell and Elliot are unlikely to take up the additional shares and Jack and Daniel are presently speaking to their financial advisers about their ability to invest more money into the company. Jacinta sees this latest move as evidence that Bill has no interest in preserving a company role for his daughters in law.

REQUIRED - Use Australian Legislation to inform your answer.

Advise Jacinta on her legal position as a member. Can she take any action to improve her position or challenge the proposal not to pay a dividend for the fourth year in a row.