QUESTION 4

La Papillon Ltd is a French company without a constitution. The company owns and operates fine dining restaurants throughout Western Australia's coastal tourist regions. The directors have recently decided that the company should invest in fast food outlets in central Perth.

The members of La Papillon Ltd would prefer the company to invest in purchasing souvenir shops instead. The members want the directors to call a meeting where such a resolution is proposed.

REQUIRED:

With reference to the Corporations Act 2001 (Cth) and case law, discuss whether the directors have to abide by the members' request, or whether they can ignore the members' request and invest in fast food outlets.