CORPORATION LAW

Corporation Law

Corporation Law

Introduction

This essay intends to discuss different aspects of duties which the board of directors is provided with. The essay revolves around two different set of questions. The first question will reveal about what needs to be done when the directors are essentially not performing their intended duties. On the other hand, the second question will revolve around what factors must be considered before deciding about the directors. Not everyone investing in the business can become a director. Therefore, there are several factors that must be considered while deciding upon the director's making. The purpose of this essay is to talk about the veiling of incorporation aspects. The veil of incorporation seems to be important when the directors tend to breach the duties. Directors possess an essential duty to prevent insolvent trading. The position of director brings along a lot of responsibilities. Therefore; directors need to be aware of the responsibilities and also to work immensely towards meeting those responsibilities. The paper will highlight several different aspects that relate to the duties of directors.

Part One

Part one of this paper is about explaining why directors possess an important duty to prevent insolvent trading that exists. Also, the circumstances and the consequences of the veil of incorporation being lifted for insolvent trading are important parts to be mentioned within this part. The scenario of this part of the essay is about OHS Solutions which is a company formed by three friends. The company has four directors naming Des, Emma, Satish and Ying. Des, Emma and Satish are friends and expertise of different fields; whereas, Ying is a director named by the guarantor of a loan of $50,000. The situation has become quite worse for the newly opened business due to the various operational problems.

Ying being nominated a director by the Guarantor believes that the business is being poorly managed. Also, according to her the business has potential opportunities to grow and her parent company Support Pty. Ltd. must buy OHS Solutions to witness more success. Ying has now hired me as a consultant to provide preliminary view about the predicament of OHS Solutions. Ying also inquires some suggestions for her position regarding the business. Therefore, a careful analysis is required for the purpose of providing essentially solutions to Ying.

After analyzing the situation of the business and the work done by the respective directors; the initial thing that I have concluded is that none of the directors seems determined to fulfill their responsibilities. All of the directors including Ying are sort of breaching the responsibilities they have provided with. I have also analyzed that Ying is also vulnerable as a director of OHS Solutions for failing to prevent the company from trading when it is insolvent. Being appointed as a director from the guarantor does not make Ying a free lancer; she also needs to fulfill the responsibilities that are in favor of the company.

For the purpose of making clear suggestions to Ying, it remains extremely important to explain the ...