Question
When the three friends first registered Fiercely Eco Pty Ltd, they created their own company constitution. One of the reasons they chose a constitution over
When the three friends first registered Fiercely Eco Pty Ltd, they created their own company constitution. One of the reasons they chose a constitution over using the replaceable rules, was to ensure their constitution could reflect, not only their shared love for fashion, but also their passion for protecting the environment. To do this, they included the following two clauses in their company constitution: 1. Fiercely Eco Pty Ltd was created to make clothing items in an environmentally sensitive manner by helping to fight against the harmful impact that fast fashion manufacturing has on the worlds oceans and on the ongoing cycle of poverty in 3rd world communities. 2. Fiercely Eco Pty Ltd will only source fabrics and materials from second hand clothing stores and recycling facilities. By December 2021, Fiercely Eco Pty Ltd was doing well financially and one of Cybils creations was even featured on the cover of the internationally renowned fashion magazine, Vogue. Then everything changed. On 1 March 2022, Cybil was shocked to learn that Amelia and Jane were involved in business discussions with Chemtex Ltd - a large textiles manufacturer in Bangladesh that is known for human rights violations and for dumping toxic chemicals into the river systems in Dhaka. The deal, according to an email sent by Amelia and Jane, would secure Fiercely Eco Pty Ltds future as a billion dollar international fashion label. Cybil is outraged by the thought that Fiercely Eco Pty Ltd would be contributing to the worlds ecological damage, and immediately called on Amelia and Jane to convene an urgent extraordinary general meeting to discuss the companys dealings with Chemtex Ltd. Amelia and Jane refused, stating that they are not required to call this meeting, and they already signed a 10 year contract with Chemtex Ltd earlier that same morning. Cybil is furious and planning to take legal action. Required: Discuss whether Amelia and Jane were legally required to call an extraordinary general meeting to allow Cybil to discuss the companys dealings with Chemtex Ltd. (Corporations Act s 198A, and cases such as Automatic Self-Cleansing v Cunningham, and NRMA v Parker)
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