Class Notes (838,347)
Australia (1,845)
Law (441)
JSB171 (400)
All (349)

5.1 Governance--directors

5 Pages
Unlock Document

All Professors

Directors Definitions Director  General law—includes— (CAC (NSW) v Drysdale (1978)) o appointed as a director o assume office of director without being properly appointed  Reflected under CA— (s9) o Appointed as director or alternate director acting in that capacity: s9(a) o Not appointed but acts in position of director or accustomed to act in accordance with instructions or wishes: s9(b)  Includes— o Person appointed: s9(a) o de facto directors: s9(b)(i) (act in the position of a director) DCT v Austin  eg—person who resigns as director but continues exercising functions: DCT v Austin o shadow directors: s9(b)(ii) (the directors of the company are accustomed to act in accordance with the person's instructions or wishes); Standard Chartered Bank of Australia Ltd v Antico  eg—holding company being shadow director of subsidiary: Standard Chartered Bank of Australia Ltd v Antico  Question of degree, considering— (DCT v Austin) o influence over the affairs of the coy: Australian Securities Commission v AS Nominees  Need not control whole scope of operations o Significance of duties performed in context of the company—size, internal practices o Perception of outsiders Officer Means— (s9) (a) director or secretary (b) person who (i) participates in making decisions that affect the whole or substantial part of the business of the company; (ii)has the capacity to affect significantly the company’s financial standing; (iiithe directors of the coy are accustomed to act under instruction from (excluding professional advice) (c) receiver or receiver and manager (d) administrator of coy (e) administrator of deed of company arrangement (f) liquidator of corporation (g) trustee or other person administering compromise or arrangement between coy and someone else  Director of holding company may be officer of subsidiary if participating in decision-making processes: s9(b)(i); ASIC v Adler (director of holding co & member of investment committee— participated in decisions affecting financial status of company—involved in substantial part of business  officer under (b)(i)&(ii))  Directors duties in ss180-183 also apply to officers Andrew Trotter LWB334 Corporate Law Eligibility: s201B Must be— (s201B(1))  At least 18 years of age  Natural person o Although corporation can be ‘deemed’ to be a director Grounds for Disqualification: Part 2D.6  Not designed to be punitive—intended to protect creditors & public generally: Chew v NCSC Automatic disqualifications (s206B)  convicted of offence that relates to management of corporation: s206B(1) o Definition—  concerned decisions affecting the whole or substantial part of business or coy’s financial standing (s206B(1)(a)) or  punishable by a period of imprisonment greater than 12 months (s206B(1)(b)) o Period—  Generally  Not imprisoned → 5 years after date of conviction (s206B(2)(a))  Imprisoned → 5 years after date of release from prison (s206B(2)(b))  Extension—ASIC can apply to ct before disqualification or during first year for extension of period up to 15 years: s206BA  Insolvent o Undischarged bankrupt: s206B(3) o personal insolvency agreement not yet complied with: s206B(4) Court power of disqualification: s206C  ASIC applies to court for disqualification: s206C(1)  Civil penalty provision—for a period which the court considers appropriate— (s206C(1)) a. contravened civil penalty provision: s206C(1)(a) b. court is satisfied that disqualification is appropriate: s206C(1)(b)  Considering conduct in relation to management, business or property etc: s206C(2)  Repeated contraventions—for a period the court considers appropriate— (s206E) a. Two contraventions: s206E(1)(a)  officer of coy which breached act and failed to take reasonable steps to stop breach: s206E(1)(a)(i)  contravened act while officer of coy: s206E(1)(a)(ii) b. disqualification is justified: s206E(1)(b)  Considering conduct in relation to management, business or property etc: s206E(2)  Failed companies—For a period up to 20 years if— (s206D(1)) a. Officer of 2 failed corporations in 7 years: s206D(1)(a)  Wound up by court order: s206D(2)(a) or by liquidators206D(2)(h)  Creditors unlikely to be fully paid after voluntary liq | deed of arrangement | ceases to carry on business: s206D(2)(b)-(d)  Levy of execution not satisfied: s206D(2)(e)  Receiver, manager, prov liq: s206D(2)(f)  Compromise with creditors: s206D(2)(g) b. Wholly or partly responsible for that failure: s206D(1)(b)(i) c. Disqualification is justified: s206D(1)(b)(ii) Andrew Trotter LWB334 Corporate Law ASIC’s power of disqualification: s206F Can disqualify for up to 5 years where— (s206F(1)) a. 2 failed companies in 7 years: s206F(1)(a)  officer of 2 or more coys in 7 years  while person officer or within 12 months after leaving, both wound up and a liquidator lodged a s533(1) report saying coy could not pay its debts b. ASIC gives notice to the person to demonstrate why they should not be disqualified (opportunity to be heard): s206F(1)(b) c. ASIC is satisfied disqualification is justified: s206F(1)(c)  Considering— (s206F(2))  whether companies related  person’s conduct  public interest Effect of disqualification Can only be made a director by— (s201B(2))  ASIC’s permission (s206F) o Can be subject to conditions: s206F  Leave of court (s206G) o Not available if disqualified by ASIC: s206G(1) o Lodge notice with ASIC 21 days before commencing application: s206B(2) o May be conditional: s206B(3) Appointment of Directors Number  Minimum no of directors o Pty → at least one director, ordinarily resident in Aust: s201A(1) o Public → at least 3 directors, at least 2 of which are ordinarily resident in Aust: s201A(2)  Maximum—not in CA, can prescribe in constitution Procedure  First directors— o appointed by putting names in application form to register company: s120(
More Less

Related notes for JSB171

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.