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Corporation Law case study - Essay Example

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Corporation Law case study

The main issue is if the selling of stocks and the responsibility of the directors. Its nesassry to tell a few words about dealing with outsiders. Also the seconde question deals with the problem of outsider trading.

Express authority4
In the context of a Co, actual authority will be conferred by the Co const or, in its absence in accordance with the replaceable rules of the CA.

In general, in the case of any Co with more than 1 D, authority is vested in the Board collectively - s 198A

Any act lying outside the authority of the D's or the Board can be performed by the members in general meeting - s 198A(2)

Implied authority of Co officers
The Board may appoint someone as Managing Director (must be one of their own number - replaceable rule s 201J), conferring on that person the powers of the Board - s 198C(1).

According to the articles concerning duties of directors one of theliste every managing director is obliged to act in good faith in the best interests of the corp and to use powers for a proper purpose - s 181.5
In this case the managing director haven't acted in the best iint of the company because the board of directors had rejected the contract. So mister Lam is responsible for comensation the losses to the company.


Also he have to take responsibility of information given about the information given on the new project because he promised the increase in productivity of about 100%. The law prohibits insider trading.
Generally, D's do not owe a fiduciary duty to individual s'holders

Percival v Wright [1902] 2 Ch 421 - shareholders offered to sell shares to directors - directors already negotiating to sell shares at much higher price but did not inform s'holders - court held no fiduciary duty to shareholders,...
The second question concerns different articles of the corporate law. There is some information about the corporations' law. The main issue is if the selling of stocks and the responsibility of the directors. Its nesassry to tell a few words about dealing with outsiders. Also the seconde question deals with the problem of outsider trading.
According to the articles concerning duties of directors one of theliste every managing director is obliged to act in good faith in the best interests of the corp and to use powers for a proper purpose - s 181.5
In this case the managing director haven't acted in the best iint of the company because the board of directors had rejected the contract. So mister Lam is responsible for comensation the losses to the company.
Also he have to take responsibility of information given about the information given on the new project because he promised the increase in productivity of about 100%. The law prohibits insider trading.
Percival v Wright [1902] 2 Ch 421 - shareholders offered to sell shares to directors - directors already negotiating to sell shares at much higher price but did not inform s'holders - court held no fiduciary duty to shareholders, and so they could not recover.
Primary prohibition in s 1043A(1) - insider may not purchase or sell shares in Co or get anyone to do that for him. ...Show more

Summary

The relevant areas of law to be applied include organizing of the general meeting protection of the minority against the fraud. Fraud can be defined as intentional deception to cause a person to give up property or some lawful right1
Special notice (2 mos) must be given for resolution removing D of public Co (s 227) or auditor of any Co (s 329)…
Author : tabitha09
Corporation Law case study essay example
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