BUSL301 Tutorial question 5

Presented by group4 Sangeun Ha (42505054) Xing Chen(CHXJB1103) Fangyuan Wang(42040213)

(1)What is the source of the board of director po wers?

A company consists of two components or organs: The sources of powers are: 1. Board of directors (BOD) 2. Meetings pass the power or Generate powers (GM) 1.Board of directors(BOD) - mainly from the constitution or replaceable rules in 198A - wide management powers conferred on the directors as a board to act as behalf o f the company 2. General Meetings - control the exercise of the boards powers indirectly through its power of appoin tment.

(1) What powers does the board of directors have ?

Manageme nt Registratio n of transfers of shares Companys power Calling meetings Delegation of power

Dividends

Execute documents

Negotiable instrument s

(2) What is the role of the Chair of the board?

Chair of Director procedural control of company meetings a casting vote(s248G) signs the minutes(s249U)

Types of directors
Chair of Directors
Exercise procedural control at meetings (s248E) and signs the minutes (s249U)

Managing of Directors
appointed pursuant to s201J and may take all the board's powers under s198C

Excutive of Directors
Full-time employee Owe contractual, common law and statutory obligations to the company

Non of Excutive Directors

Not involved in full-time management of the company and Not an employee.

Alternate of Directors
Appointed to act as a"fillin" for a director who for some reason at the time is unable to act as a director.

Nominee of Directors
Are often appointed to represent the interests of a particular class or classes of shareholders.

 (3). Mr. Shift, Ms. Avid and Mr. Margin seek your advice on estab lishing a new company. You advise them not to bother with their own constitution, but instead to rely on the replaceable rules in th e Corporations Act. Advise who should be appointed as directors of their company in view of the following information: (a) Mr. Shift states that he does not want to be appointed a directo r or secretary. He suggests instead that his family company be app ointed as a director; and that the company not have a company se cretary; (b) Ms. Avid is currently unavailable for meetings as she has five months still to serve for her last conviction for falsifying compan y accounts; (c) Mr. Margin is 80 years old.

(a) Mr shift cannot have his family company as a director. Becau

se the company is not an individual. S201B: to be appointed as a director Human being, healthy people 18years old Not be disqualified from managing a corporation S204A(1): It is optional for proprietary company to have secretary.

(b) S206B(1) and (2):

Restrict Ms. Avid from being involved in the management of a compa ny within 5 years of her conviction or release from person, without le ave court. (C) legally, Yes. There is no restriction on Mr. Margin being a director at 80 years. There is no statutory restriction against a person who is mentally inca pable managing a company.

 (4) Assume that Mr. Shifts family company subseque ntly goes into liquidation. In her report to ASIC, the li quidator states that the secured creditors have been re paid in full, but the unsecured creditors will not recei ve more than 20 cents in the dollar. The liquidator do es not find any evidence of wrongdoing on the part of Mr. Shift or any of his fellow directors. What (if any) ramifications does this have for Mr. Shi ft assuming that ASICs records show that Mr. Shift h as, over the last nine months, had a similar track recor d with two other small proprietary companies?

 S533
The payment less than 50cents in the dollar to unsecur ed creditors is a matter which must be included in the liquidators report to ASIC

S206(1)
Show cause

 S206F(2)
The fact to be taken into account by ASIC

S206F(3) S206F(4)
Shifty from managing any company for up to 5 years

S206A and S206F(5)

Shifty could not be a director