Workshop 4

Question 1

Directors’ general duties

Answer 1

S 170(4)

Question 2

Duty to act within powers

Answer 2

s171 - codification of the fiduciary duty.

Question 3

Duty to promote the success of the company

Answer 3

s 172:
The directors must have regard to various factors, such as:
1) the likely consequences of the decisions made.
2) the interest of the company’s employees.
3) the need to foster the company’s business relationships with suppliers, customers and others
4) the impact of the company’s operations on the community and environment.
5) the desirability of the company maintaining a reputation.
6)the need to act fairly.

Question 4

Duty to exercise independent judgment

Answer 4

s 173

Question 5

Duty to exercise reasonable care,skill and dilligence

Answer 5

s 174.

Question 6

Duty to avoid conflict of interest

Answer 6

s175

Question 7

Duty not to accept benefits from third parties

Answer 7

s176

Question 8

Duty to declare interest in proposed transaction or arrangement with the Company.

Answer 8

s177

Question 9

Exceptions to duty to declare interest

Answer 9

when the director is not aware of his interest - s 177(5)
where the situation is highly unlikely to cause a conflict of interest or where the directors are aware of it. - s 177(6)

Question 10

Duty to declare interest in existing transactions or arrangement with company

Answer 10

s182.

Question 11

Remedies for breach of directors’ duties

Answer 11

1. the requirement for a director to account for profits.
2. the requirement for the director to return property.
3. payment of equitable compensation by the director.
4. recision of contract.
5. an injunction against the director.

Question 12

Avoiding liability for breach of directors duty

Answer 12

Authorisation for 175.
Ratification by shareholders - s 239
Relief by court - s 1157.
Insurance - s 232.

Question 13

Director’s liability

Answer 13

Agency
Torts
Failure to maintain company records
Liability for financial records
Liability for H&S breaches
Bribery

Question 14

When is shareholders’ approval neTo add a row, press TAB or click the button below.
eded?

Answer 14

1. amending company’s articles (SR).
2. approving an SPT (OR).
3. approving a Defendant’s service (OR).
4. approving compensation for a director’s loss of office (OR).
5. authorising directors to allot shares (when required) - OR
6. dissaplying S’s pre-emption rights - SR.
7. approving a contract to buy back shares - OR.
8. approving payment to buy back back - SR.
9. ratifying a director’s breach of duty - OR.
10. authorising political donations - OR.
11. registering a private company as a public company - SR.
12. removing a D of Company against his will.
13. removing an auditor of the Company - OR.
14. change of Company’s name - SR.

Question 15

Shareholders’ General Meetings

Answer 15

Annual general meetings.

General Meetings.

Question 16

Calling General Meetings

Answer 16

• by the directors - s 302.
• shareholders by requesting the directors to call a GM - s 303.
• by the court - s306.
• by the auditors - s 518.

Question 17

GM Notice

Answer 17

• to all shareholders - s 310.
• hard copy or electronically - s 308.
• 14 clear days - s 307.

Question 18

GM Quorum

Answer 18

• s318(2) - 2 shareholders.

Question 19

Accounting Reference Date Form

Answer 19

AA01 - s 392.

Question 20

Company Secretary Form

Answer 20

AP03/AP04 - s276

Question 21

Change of directors’ details Form

Answer 21

CH01 - s167

Question 22

Person with Significant Control Form

Answer 22

PSC01/PSC02