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Veritas Enterprises Ltd (Veritas) is a company that was incorporated in 2015. The constitution of Veritas has the following object: the business of the company
Veritas Enterprises Ltd (Veritas) is a company that was incorporated in 2015. The constitution of Veritas has the following object: "the business of the company is focussed on investing in pet food producers" Veritas has three directors, Belinda, Mary and Marium, who together also own 10% of the company's shares. The remaining shares are split almost equally between three investors; Mrs Dale, Father Giuseppe and Dr Reece. Since incorporation, Veritas has returned few profits to members. Mrs Dale and Dr Reece think they have an idea to greatly enhance the profitability of Veritas. They put forth a proposal at a members' meeting that Veritas should purchase a chain of high- end retail butcheries. These butcheries sell food for human consumption and have no interest in pet food production at all. Belinda, Mary and Marium are not keen on the members' proposal. However, the 3 directors are informed that they will be removed from the Board if they do not comply with the proposal of Mrs Dale and Dr Reece. Although Father Giuseppe does not support them, Mrs Dale and Dr Reece have sufficient voting power together to action the removal of the 3 directors. Belinda, Mary and Marium therefore feel compelled to act in accordance with the wishes of Mrs Dale and Dr Reece. A). Identify which section of the Corporations Act 2001 (Cth) gives members the power to remove directors in a company such as Veritas Enterprises Ltd (2 mark). B). Is it possible for one company to be a director of another company? Refer to the relevant section of the Corporations Act in the answer (3 mark). C). What is required to be appointed as a director? Refer to the relevant sections of the Corporations Act in the answer (5 marks). D). Discuss the consequences of breach of constitutional objects for the Veritas and its participants, making reference to the relevant sections of the Corporations Act (15 marks). Make sure to utilise I..A.C. structure for the
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