,Week 1: Australian Legal system and formation of contract
Week 2: Terms of contract
Week 3: Validity of contract
Week 4: Discharge of contract and remedies for breach of contract
Week 5: Remedies for breach of contract
Week 6: Joint ventures, Trusts, Syndicates, and associations
Week 7: Characteristics of a company and its constitution.
Week 8: Companies relations with outsiders
Week 9: Director's duties: Good faith, conflict of interests, care, and diligence
Week 10: Directors’ duties: Avoidance of insolvent trading
Week 11: Members’ remedies
, List of covered Statute from Corporations Act 2001
Section Details Related cases (find
below)
S.1 Lists ASICs objectives, its functions include:
• Registration of companies
• Collection and dissemination of corporate information
• Surveillance, investigation, and enforcement
• Education
• Law reform.
S.9 Dictionary for the whole act
S.112 Types of companies (only two can be registered under this act)
• Public Companies
• Proprietary companies
Extent of members liability depends on the type of company, which is
detailed in here.
S.113 Proprietary companies
• Must not have more than 50 employees
• A proprietary company must not engage in any activity that would
require disclosure to investors
S.123 Company may have common seal
• Traditionally, a company contracts directly by using its company
seal where one or two directors and the company secretary fix the
seal and witness the fixing of the seal.
• Since 1998, the use of a seal has been made optional, companies
may now enter into a contract by:
- executing the document by signing the document, without
seal, as required by s. 127 (1)
- executing the document with seal and necessary witnesses, as
required by s. 127 (2)
- using the procedure set out in their constitution.
S.124 Legal capacity and powers of a company/outsider relationships
A company has the legal capacity and powers of an individual’: abolition of
the doctrine of ultra vires and the requirements of objects clause.
A company can enter into contracts and property dealings as if it were a
real person, however, the separate legal entity of a company is a legal
faction and it needs a board of directors to manage its affairs, a constitution
and rules by which to operate, and agents to carry out its relations with
outsiders.
S.125 Constitution may limit powers and set out objects
An act of the company is not invalid merely because it is contrary to or
beyond any objects in the company’s constitution’. There may still be a
breach of director’s duty.
S.128 Entitlement to make assumptions
(1) A person is entitled to make the assumptions in section 129 in
relation to dealings with a company.
(2) A person is entitled to make the assumptions in section 129 in
relation to dealings with another person who has, or purports to
have, directly or indirectly acquired title to property from a
company.
, (3) The assumptions may be made even if an officer or agent of the
company acts fraudulently, or forges a document, in connection
with the dealings.
(4) A person is not entitled to make an assumption in section 129 if at
the time of the dealings they knew or suspected that the
assumption was incorrect.
S.129 Assumptions that can be made under section 128 Northside Developments
It states that the outsider can assume that: Pty Ltd v Registrar (WK8)
- that the company constitution has been complied with
- anyone appearing from information provided by the company
or information as a director or secretary, does in fact hold that
position
- any person who is held out by the company as an officer or
agent, is presumed to be duty appointed and holding
appropriate authority
- that the officers and agents of the company properly perform
their duties to the company
- that an officer or agent who issues a document, warrants that
it is a true copy and is appropriately executed.
S.134 Internal management of companies
These rules are called ‘replaceable rules’ and are set out in s. 141 of the act.
S.135 Replaceable rules
(2) a company may displace or modify any one or more of the replaceable
rules by adopting a constitution.
S.136 Constitution of a company
• Adopting a constitution by special resolution
• Company may modify or repeal its constitution
S.9 definition:
Special resolution:
• Notice – 21 days (s.249H(1))
• Passed by at least 75% of the votes cast by members entitled to
vote on the resolution.
• Lodge a copy resolution modifying constitution with ASIC s.136(5)
S.140 Effect of constitution and replaceable rules
A company’s constitution (if any) and any replaceable rules that apply to
the company have the effect as a contract between:
• the company and each member
• the company and each director and company secretary
• a member and each other member.'
S.141 Table of replaceable rules
• Very large table that leads to other sub-provisions
S.148 A company’s name
• The company may use available name or Australian Company
Number (ACN)
S.180 Care and diligence--civil obligation only Daniels v Anderson (Wk9)
A director or other officer of a corporation must exercise their powers and
discharge their duties with the degree of care and diligence that a Vines v. ASIC (WK9)
reasonable person would exercise if they:
• were a director or officer of a corporation in the corporation's
circumstances; and
• occupied the office held by, and had the same responsibilities
within the corporation as, the director or officer.
S.181 Good faith – Civil obligations
(1) A director or other officer of a corporation must exercise their powers
and discharge their duties:
(a) in good faith in the best interests of the corporation; and
Week 2: Terms of contract
Week 3: Validity of contract
Week 4: Discharge of contract and remedies for breach of contract
Week 5: Remedies for breach of contract
Week 6: Joint ventures, Trusts, Syndicates, and associations
Week 7: Characteristics of a company and its constitution.
Week 8: Companies relations with outsiders
Week 9: Director's duties: Good faith, conflict of interests, care, and diligence
Week 10: Directors’ duties: Avoidance of insolvent trading
Week 11: Members’ remedies
, List of covered Statute from Corporations Act 2001
Section Details Related cases (find
below)
S.1 Lists ASICs objectives, its functions include:
• Registration of companies
• Collection and dissemination of corporate information
• Surveillance, investigation, and enforcement
• Education
• Law reform.
S.9 Dictionary for the whole act
S.112 Types of companies (only two can be registered under this act)
• Public Companies
• Proprietary companies
Extent of members liability depends on the type of company, which is
detailed in here.
S.113 Proprietary companies
• Must not have more than 50 employees
• A proprietary company must not engage in any activity that would
require disclosure to investors
S.123 Company may have common seal
• Traditionally, a company contracts directly by using its company
seal where one or two directors and the company secretary fix the
seal and witness the fixing of the seal.
• Since 1998, the use of a seal has been made optional, companies
may now enter into a contract by:
- executing the document by signing the document, without
seal, as required by s. 127 (1)
- executing the document with seal and necessary witnesses, as
required by s. 127 (2)
- using the procedure set out in their constitution.
S.124 Legal capacity and powers of a company/outsider relationships
A company has the legal capacity and powers of an individual’: abolition of
the doctrine of ultra vires and the requirements of objects clause.
A company can enter into contracts and property dealings as if it were a
real person, however, the separate legal entity of a company is a legal
faction and it needs a board of directors to manage its affairs, a constitution
and rules by which to operate, and agents to carry out its relations with
outsiders.
S.125 Constitution may limit powers and set out objects
An act of the company is not invalid merely because it is contrary to or
beyond any objects in the company’s constitution’. There may still be a
breach of director’s duty.
S.128 Entitlement to make assumptions
(1) A person is entitled to make the assumptions in section 129 in
relation to dealings with a company.
(2) A person is entitled to make the assumptions in section 129 in
relation to dealings with another person who has, or purports to
have, directly or indirectly acquired title to property from a
company.
, (3) The assumptions may be made even if an officer or agent of the
company acts fraudulently, or forges a document, in connection
with the dealings.
(4) A person is not entitled to make an assumption in section 129 if at
the time of the dealings they knew or suspected that the
assumption was incorrect.
S.129 Assumptions that can be made under section 128 Northside Developments
It states that the outsider can assume that: Pty Ltd v Registrar (WK8)
- that the company constitution has been complied with
- anyone appearing from information provided by the company
or information as a director or secretary, does in fact hold that
position
- any person who is held out by the company as an officer or
agent, is presumed to be duty appointed and holding
appropriate authority
- that the officers and agents of the company properly perform
their duties to the company
- that an officer or agent who issues a document, warrants that
it is a true copy and is appropriately executed.
S.134 Internal management of companies
These rules are called ‘replaceable rules’ and are set out in s. 141 of the act.
S.135 Replaceable rules
(2) a company may displace or modify any one or more of the replaceable
rules by adopting a constitution.
S.136 Constitution of a company
• Adopting a constitution by special resolution
• Company may modify or repeal its constitution
S.9 definition:
Special resolution:
• Notice – 21 days (s.249H(1))
• Passed by at least 75% of the votes cast by members entitled to
vote on the resolution.
• Lodge a copy resolution modifying constitution with ASIC s.136(5)
S.140 Effect of constitution and replaceable rules
A company’s constitution (if any) and any replaceable rules that apply to
the company have the effect as a contract between:
• the company and each member
• the company and each director and company secretary
• a member and each other member.'
S.141 Table of replaceable rules
• Very large table that leads to other sub-provisions
S.148 A company’s name
• The company may use available name or Australian Company
Number (ACN)
S.180 Care and diligence--civil obligation only Daniels v Anderson (Wk9)
A director or other officer of a corporation must exercise their powers and
discharge their duties with the degree of care and diligence that a Vines v. ASIC (WK9)
reasonable person would exercise if they:
• were a director or officer of a corporation in the corporation's
circumstances; and
• occupied the office held by, and had the same responsibilities
within the corporation as, the director or officer.
S.181 Good faith – Civil obligations
(1) A director or other officer of a corporation must exercise their powers
and discharge their duties:
(a) in good faith in the best interests of the corporation; and
