There is a conflict at law between the decision making by directors and shareholders
Required:
Explain why this conflict arises and what each group is responsible for.

What if one group is not happy with the other.
2. As accountants and financial advisers you will be asked to look after the interest of your clients. Sally has been a long term client of your practice. She is a senior manager in a large IT company. However after 15 years in the company she is getting tired and wishes to start up a business on her own. Some of the existing clients of the firm wish to go with her. However she does not want to upset her current employer and does not want them to know she is setting up a business in competition to her current employer.
Required:
How can Sally set up a company where she can control it but not be a director of the company?

3. You are a partner in an accounting firm and you have been asked to represent one of your clients on a public company. Your clients owns 15% of the shares in the public company. A board decision is against the interest of your client but is in the best interest of the 85% shareholders.
Required:
Whose interest do you look after, your client or the other shareholders?

4. Before joining the board of Great Mines Ltd (GML), Ron Guthrie was an official in a very militant trade union. A recent investigation by the Fair Work Commissioninto the affairs of the union at the time Ron worked there has resulted in allegations of misuse of union funds. There is a rumour that a number of officials, including Ron, may be charged with criminal offences punishable by more than 12 months imprisonment. Ethics Limited, a shareholder in GML, wants Ron removed from the board of GML immediately. Ron refuses to resign.
Required:
Advise Ron if:

a. Can his fellow directors remove him from office?
b. Can he be removed by GML’s members? Provide legal reasons for your answers.

5. Electronics Ltd is a significant shareholder in Telstar Ltd. It owns 25% or 5,000,000 shares in Telstar Ltd. The remaining 75% is owned:
a. 30% by Mark a friend on behalf of Elon (6,000,000 shares) and
b. 45% by the public (9,000,000 shares) (300 shareholders) Elon as a director wants to be paid director’s fees of $5,000,000. This is to be voted on by the shareholders at the AGM. Electronics Ltd is concerned that the majority of public shareholders will vote in favour of the decision. Electronics Ltd and some of the public shareholders have not been happy with Elon’s performance or strange behaviour and do not want him to receive the $5,000,000.
Required:
When it comes to voting on the resolution, how can Electronics Ltd ensure that the decision is not approved