Question
Ryder, Justin and Leah are the only directors of Salt of the Earth Pty Ltd (SALT), a company that sells holiday adventure packages. They each
Ryder, Justin and Leah are the only directors of Salt of the Earth Pty Ltd (SALT), a company that sells holiday adventure packages. They each own 10 per cent of SALT's shares. The remainder of the shares are owned by Leah's father, Alf, who owns 15 per cent of SALT's shares, and other members of Alf's large extended family.
After a tsunami devastates much of the Western Perth coastline, SALT's board of directors announces that it will be donating $2 million to the relief effort. Alf complains that this is a misuse of shareholder funds. Discuss whether this action will breach any directors' duties under the Corporations Act 2001 (Cth) and why.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started