Company law deals with every stage of the life of a company, starting from its incorporation to the dissolution, or death of the company. If one was to search the web for a company law assignment sample for assistance, naturally, one would find hundreds of them. However, the real challenge is finding a sample that is reliable and has all the required information. Students need academic assistance all the time, so it is not a big deal to seek online assignment help. Nevertheless, let us understand how a company law assignment should be written.
As discussed above, there are various types of company law assignments that are given to students, which have been listed below:-
Case study assignment require a deep analysis of the case, taking the point of view of the reader in consideration. Along with this, it is required to enlist any future perspectives for the case in question. A case study is one of the most common types of assignments given to students studying law courses.
It is required to read the case and then perform a critical analysis regarding the proceedings and findings of the same. In such assignments, a case is provided to the student, who has to go through the case and enlist the various factors that have affected the proceedings, and also critically analyse it.
The theoretical knowledge of the student is tested through questions which can only be answered by a subject expert. In order to deal with this, students often search online for a company law assignment help provider.
Assignments on this subject can also be in the form of essays. The most common of these are based on the duties of directors towards the company.
This company law assignment sample was solved by a law expert and required research and analysis on various factors surrounding the environment of a business, keeping in mind the Corporations Act 2001. Let us have a look at how the assignment writing experts at My Assignment Services have tackled an assignment that was given to them by a student.
Section 140(1) of the Corporations Act 2001 (Cth) enshrines the long-time position that a company’s constitution forms a statutory contract between, amongst others, the company and each member and the company and each director.
In Australia, normally, the internal management of the company is governed by three main sources. The same are:
When a company is registered under the Act, then, it must be governed by a constitution. Normally, a Constitution is adopted by a company before its registration or it can be adopted after registration if a special resolution is passed on this behalf. But, it is not every company that is governed under the constitution. The companies which require constitution for its governance are:
A proprietary company is not under any obligation to file a constitution while getting registration under the Act. This is because a proprietary company is not an unlimited company. But, it is also governed by its constitution and must keep it as a record for its governance and must provide the same whenever required. Further, under section 139 of the Act, it is the duty of the company to provide the updated constitution within seven days of the request so made by a member. If the Corporations Regulations 2001 has imposed any fees, then, the company must provide the constitution within seven days of payment of the fees by the member.
Thus, Constitution is the governing document of a company registered under the Corporations Act 2001.
The main purpose of the constitution is that it has the effect of a contractual relationship amid the company and its directors; the company and its members; a member and every other member and the company and the secretary of the company.
(2) Can a company’s constitution be amended and, if so, what are the requirements? Do you think the requirements are sufficient to protect minority shareholders?
The Constitution is a very important and the governing document of every company. However, there are provisions which are made part of the Corporation Act 2001 which has laid down the procedure and rules for the amendment of the constitution of the company.
As per section 136 of the Act, a company is authorized to amend/modify or repeal the constitution. As per the section, the shareholders must pass a special resolution by at least 75% votes. Once a 75% majority is undertaken then such resolution is capable to amend the constitution and such amendment is binding and is obligatory upon the minority shareholders. It does not make any difference whether the minority shareholders has voted in favor or against the amendments. Once an amendment is passed it is binding with full effect.
However, under section 136 (2) of the Act, if the amendment procedure of the constitution requires some other additional requirements, then it is necessary that such additional requirements must be comply with in order to make such an amendment legal and effective. Some of the additional requirements can be:
Thus, if the additional requirements are necessary, then, it is the foremost task to comply with such additional requirement before proceeding with any other requirement to make an amendment effective.
However, it is important to be kept in mind that no additional requirement must be made which restricts the company power to amend the constitution. Any restriction which puts restrictions on the power of the company through which amendment is not possible, such additional requirements are invalid in law. At times, the minority shareholders try to negotiate the additional requirements thereby protecting their financial interest which may get affected by the majority decisions, however, this negotiation can only make the amendment more difficult but cannot impose a full ban upon the emending power of the company. Thus, granting negotiating power to the minority shareholders can only provide some remedies to them but is not fully secure in nature.
Further there are few protections which are provided to the shareholders of the company under which the amendments are not binding the shareholders. But, it is important to understand whether such requirements are sufficient to protect minority shareholders?
The amendments are:
This provision gives an opportunity to the minority shareholders of the private company to set out a procedure that safeguards their own interest by making the process difficult. But, though the procedure is difficult but
Also, post Gambotto v WCP Ltd decision, seizure of the minority shares are permissible when the minority shareholdings is considered to be harmful and damaging to the company or the minority is in competence with the company or when it is necessary to seize the minority shareholding in order to comply with the regulations that governs the main business of the company or it is essential to promote and protect the interest of the company.
But, if the seizure is only to gain benefit to the majority shareholders then, such seizure is not possible.
Thus, a limited protection is provided to minority shareholders after the decision of Gambotto v WCP Ltd, but, the protection is limited in its scope as it is providing protection to only those companies which are private companies.
But, all the three restrictions which are imposed on the majority shareholders so that it does not affect the interest of the minority shareholders by amending the constitution is very limited in scope. This is because all the three restrictions are mainly for those companies which are closely held private companies. No major limitations are provided upon the majority shareholders and in such situations they are free to bring amendments to the constitution of the company and the same are binding upon the minority shareholders of the company.
In the leading decision of Gambotto v WCP Ltd, there are two important observations that are made by the court. The same are, firstly, that, if the majority shareholders amend the constitution of the company with the main aim to compulsory acquire the shares of the minority, then, such amendment is invalid; secondly, there may be instances wherein there are conflict of interest when other kinds of amendments of the constitution takes place which necessary not involve the compulsory acquisition of the shares of the minority shareholders.
It was also held by the high Court that, first; that the majority has right to compulsory acquire the shares of the minority or they can acquire the rights of the shares attached to the same provided this power of acquisition is made part of the constitution when the company is registered; secondly, it the purpose is proper and the amendment is not oppressive then such kinds of amendments to the constitution is considered to be valid; thirdly, if any conflict does arise then such conflict is valid provided the same is within the purpose of the constitution and is not oppressive to the minority shareholders.
It is important to understand the limits on the power of the majority shareholders regarding the variation of member rights, in regard to amending a company’s constitution.
When the company is of share capital, then different classes of shares are attached with various kinds of different rights and are called class rights. And if the company does not have any share capital then such company is termed as company limited by guarantee and it is the rights of the members of specific class that is referred as class rights. Thus, generally class rights is the term which is used to refer to the rights of a particular class whether the class of the shares or of the members.
The majority shareholders of the company have been empowered to cancel or vary such class rights and there is a set procedure which is provided for the same in the constitution itself.
When the company is of the share capital then different classes of shares are attached with various kinds of different rights and are called class rights. Now, in company with share capital and if the majority shareholders wish to cancel or vary the class rights then they must comply with the procedure as set out in the constitution.
Under section 246B (1)(a), if a company with share capital has a constitution then, a set procedure is provided in such constitution with which the rights can be cancelled and varied and this set procedure cannot be altered unless and until the procedure is followed. The procedure which is set out under section 246B (1)(a) is similar to the procedure which is laid down under section 246B(1)(b) (which deals with the procedure to cancel or vary the rights of the members in a company which is without share capital).
In section 246B (2), if a company does not have a constitution or if it has the constitution but not does not specify the set procedure which is required for cancellation or variation of the class rights, then, it is necessary that the shareholders of all the classes of shares must pass a special resolution which favors the cancellation or variation of the rights which are associated to a particular class of shares. Additionally, it also requires that the shareholders whose rights are being cancelled or varied must pass a special resolution in regard to cancellation or variation OR may also give a written consent with almost 75% of the votes which are favor of the cancellation or variation by the shareholders of such class Lorenzi v Lorenzi Holdings Pty Ltd (1993).
The procedure set out under section 246B (2) must be followed even when the company is without share capital. As soon as the written consent is passed or written consent is obtained, then, the company has an obligation to inform the members who are so affected by the cancellation or variation if the class rights within seven days of passing of resolution or when the consent is obtained and is held under section 246B(3) of the Act.
Now, if any cancellation to the variation of class rights is undertaken by the majority of shareholders then such variation is challengeable under section 246D (1) of the Act.
When at least 10% of the members of the class whose rights are cancelled or varied are not in favor of such change, then, they may apply the court for setting aside the change under section 246D(1). The application for setting aside the change must be made within one month of the cancellation or variation of the class rights under section 246D(2) of the Act and the court will set aside if is of the view that the change is not fairly prejudice to the applicant and is mentioned under section 246D (5).
If no application is made by the affected class of shares then the change will take effect within one month as per section 246D (3) (a). However, if an application is made then the change will take place when the application is determined or withdrawn under section 246D (3)(b). However, as per section 246E of the Constitution, if the change is unanimously supported then the change will take place when the written consent is obtained or when the resolution is passed or at such date which is mentioned in the resolution.
Thus, these are the basic limits that are imposed on the powers of the majority shareholders regarding the variation of member rights.
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