Bysons Solutions Ltd ("Fair") is a company that was incorporated in 2020. The constitution of Fair has the following object:
"the business of the company is to invest in ethical businesses".
Fair has three directors - Jim, Melissa and Cooper- who also hold 20% of the company's shares. The remaining 80% is held by a company, Gregg Cravin Industries Ltd ("Cravin Ltd").
At the Annual General Meeting (AGM) in 2021, the corporate representative for Cravin Ltd comes up with a proposal that Fair should purchase an industrial farming complex in an overseas country. The corporate representative goes further to say that if the directors, Jim, Melissa and Cooper, do not comply with Cravin Ltd's proposal, they shall be removed from office.
Jim, Melissa and Cooper hate the proposal; they discover from a casual search of the internet that the farm in question is being investigated for human rights abuses of its workers. Furthermore, they think that investment in the farm would be unconstitutional (i.e. in contravention of the stated constitutional object of Fair). However, Jim, Melissa and Cooper are fearful of losing their jobs and so are compelled to act in accordance with Cravin Ltd's wishes.
Question 1: Answer all parts A, B, C, D and E
A). What is required to be appointed as a director? Refer to the relevant sections of the Corporations Act 2001 (Cth) in your answer (3 marks).
B). Identify which section of the Corporations Act 2001 (Cth) gives members the power to remove directors in a company such as Fair Endeavours Ltd (1 mark).
C). Identify which section of Corporations Act 2001 (Cth) gives members the power to appoint a new director in a company such as Fair Endeavours Ltd (1 mark).
D). Discuss the consequences of breach of constitutional objects for Fair Endeavours Ltd and its participants, making reference to the relevant sections of the Corporations Act 2001 (Cth) (20 marks).
Group 3 Company's Internal Rules Question 3A What is meant by the term 'Replaceable Rules'? Can the Replaceable Rules be updated? If so, how? In your answer, please refer to relevant legislation. Question 3B Which types of companies are required to have a Constitution? In your answer, please refer to relevant legislation and corporate rules. Question 3C Explain the legal effect of a Constitution (or the Replaceable Rules) on the relationship between the company and its directors and members.CASE SUMMARY 15.4 Grobow v. Perot, 539 A.2d 180 (Del. 1988) BUSINESS JUDGMENT RULE (particularly EDS), and cease any criticism of GM's H. Ross Perot became the single largest shareholder directors. A group of GM shareholders sued the direc- and a director of General Motors as a result of GM's tors under the theory that the directors had breached acquisition of Perot's highly successful company their fiduciary duty by wasting corporate assets in buy- Electronic Data Systems (EDS). A rift grew between ing Perot's silence. The directors asserted the business Perot and GM's other directors. and after appointing judgment rule as a defense. a subcommittee of directors to study possible alterna- tives, GM's directors offered to purchase back Perot's CASE QUESTIONS sock at a significant premium over market value. In 1. Who prevails and why? exchange for the payment. Perot agreed to leave his 2. What fiduciary duty is at issue? director's seat, not compete with any GM subsidiaryAccording to the company's policies, the firm whose structure is represented by "Org Chart B" has very specific rules about communication. For example, if Ulysses finds that Xu has failed to follow the company's purchasing guidelines when hiring a contracted trainer, Ulysses is not permitted to question Xu about the matter before first communicating his preliminary finding to both Oliver and Rebecca. What organizational characteristic is best illustrated by this policy? O formalization open-door the distinction between "line" and "staff" departments O standardization O span of control corporate governanceQUESTION 49 Which of the following is true about marketing messages and social media? a. Traditional marketing messages are bottom up. Ob. Social media marketing messages are not like traditional marketing messages. c. Social media messages are typically bottom up. d. Traditional marketing messages are top down, similar to social media messages e. Social media follows traditional marketing messages and how they are distributed QUESTION 50 What do users say is their primary reason for using social media? O a. Reconnecting with school mates Ob. Reconnecting with old friends O c. Promoting their own goals and objectives O d. Sharing information about themselves O e. Staying in touch with family and friendsQUESTION 28 Is a decision by a director to exercise a power for both a proper purpose and an improper purpose a breach of duty? O a. Yes, always. Ob. Yes, but only if, but for the improper purpose, the director would not have exercised the power. O c Yes, but only if, but for the proper purpose, the director would not have exercised the power. O d. No. QUESTION 29 Which of the following is not one of the requirements that must be satisfied before a director can rely on the Corporations Act 2001 (Cth)'s 187 to avoid liability for breach of the duty to act in the best interests of the company? O a, The company is a wholly owned subsidiary. O) b. The constitution of the company expressly authorises the director to act in the best interests of the parent company. c. The director acts in good faith in the best interests of the parent company. O) d. The company is insolvent at the time the director acts or becomes insolvent because of the director's act. QUESTION 30 The statutory business judgment rule allows the directors the benefit of a presumption that they are not in breach of which of their duties? C a. The duty to act in good faith in the best interests of the company. Click Save and Submit to save and submit. Click Save All Answers to save all answers. Surve MacBook Air
