CORPORATIONS LAW

Corporations Law Assignment: A Case Study

Introduction

Directors control and manage the company. They are in a powerful position and it is their duty to practice their power within the legal means, though it is easy for them to extensively undergo misuse of power, either by mismanagement and fraud. The Australian Law recognises the fact that companies are vulnerable and abused by the directors and officers to a greater extent. To control and make everyone accountable and to minimise the risk of illegal and wrongful deeds particularly at the director's end, the laws have been established to strictly govern the duties of the officers and directors. This is to make sure that they work for the benefit of the company and not for any personal gains. The duties are classified on the legal basis and the three laws governing them are:

Law of negligence and the traditional common law

Law of fiduciary obligations or the principles of equity

Statutory duties, assigned under the corporations Act which is imposed by the parliament

The (1) and (2) are called as the “general law” and they overlap the third called the statutory law (Ford, 1997).

Corporation Act 2001 (Cth)

The Corporations Act 2001 (Cth) also called as Corporations Act; it is sometimes also informally referred as Corps Act. The Corporation Act 2001 is an act which belongs to the Commonwealth of Australia; it states set of laws for governing the dealings with business articles in Australia at state and federal level. The focus of corporation act is basically on the companies, but it also covers the laws and regulations relating to partnerships and management investment schemes. The Corporation Act 2001 is one of the largest corporation statutes of the present world. CLERP reforms simplify the statues. The statutes are reformed in order to summarize thousand pages long corporation acts and sum them into few pages.

The corporations act stands as one of them principal legislations governing the companies and organizations in Australia. The regulations cover the operations and structures of companies, the constitutions which are adopted by the company, duties and responsibilities of the officers and workers, occupations, acquisition and fundraising (http://www.comlaw.gov.au).

Act And The Constitutional Basis

Commonwealth Corporation's law is the subject from High Court of Australia challenge in New South Wales v Commonwealth (1990). In the previous act the commonwealth had insufficient powers to regulate the formation and operations of the companies. Section 51 of the Australian Constitution provided enough regulations which were applicable to the foreign business and companies and to those who were established within the commonwealth. This decision was the basis for the formation of co operative scheme which invited referral of power from different states of Australia. Soon after, all the states in Australia adopted the Corporations Act 2001 (Cth).

The corporation's agreement between commonwealth and the Australian states stated that all the changes made in the act must be recorded for approval to Ministerial Council for Corporations called as MINCO (Hanrahan, 2013).

The Director As Under Corporations Act 2001 (Cth)

Under the Corporations Act 2001 (Cth) ...