ORGANISATION LAW

Organizational Law

Organizational Law

Part A

Introduction

The paper is basically divided into two parts, the first covering the role of the directors and also discussing the importance and consequence of the directors of Free Spirit Pty Ltd found in breaching of the director's duty. Therefore, to give the readers a better understanding of the issue, the author in the first half of the paper discussed the role and the duties of the directors individually; afterwards, the author highlighted some of the important points from the Corporation Act 2001. Than the author tried to explain the case much more in a positive way by mentioning the relevant cases as a piece of example and at last, the author concluded the paper by pointing out any defenses available for any of the directors.

Individual Role of the Directors

Free Spirit Pty Ltd basically operating with three directors, Yana who was the Managing Director, Su who was acting as the Financial Director, and the third one was William who was the non-executive director. The business matters were mainly handled by Yana and Su as these two were the founding members of the organization, where as William was the Yana's boyfriend, therefore, he was showing little bit of interest in the organizational matters.

Based on Corporation Act 2001

However, what most characterizes the powers of the directors; it is not so much their size and generality, to assigning them to a body and must institutional structure of society for actions, equipped with an autonomous jurisdiction and, beyond certain limits, imperative, as conferred by law in the public interest. Nothing comparable, in short, the powers of the representative payable to directors when they were qualified representatives of the company. The truth is that the act of appointment of directors so it is meeting (art. 2364, n. 2, and 2383 cc), but is in no way attributable to a contract of mandate, because the invested charge is in no way constrained in its actions by the instructions and directives assembly (Find Law Australia, 2012). There are those who even deny that the act of appointment constitutes the source of the powers of administrators, arguing that it is original powers conferred by operation of law to those which are the necessary organs of execution of the partnership agreement.

Relevant Cases

The appointment and acceptance of the directors, one should look, therefore, such as the agreement between the two parties for the establishment of a contractual relationship (a mandate, work or sui generis), distinct from the contract of society, but rather as an act designating the persons responsible body which by law is given the responsibility to exercise its powers. The format of the administrative body may be tyrannical, formed by one person, and is then called "sole director'' or, more frequently for bodies of considerable size, from a plurality of individuals, which, in varying numbers, constitute the Board of Directors (Article 2380, paragraph 2 of the Civil Code). It is headed by an appointed by the President or, failing that, by the same board. In large companies the Board of Directors does not expect to directly corporate management, but expresses its ranks ...