Law Assignment- Corporation Act

Question: Describe about the Law Assignment- Corporation Act. Answer: Section 198A: Section 198A in Corporations Act 2001 defines the framework of management of the business and the powers exercised by the directors of the company. For example, according to Section 19A under the subsection of the law corporation Act 2001 sect 198A has described that the directors have the potential power to appoint the non-executive director in the board of directors. This requires no prior voting or any approval from the other member or nonexecutive directors. Additionally, this act also states that the director of the organization also has the power to issue shares, debentures as well. This power has been provided to the director as they are mostly the chief controller of the strategies of the organization and the mostly the owners of the corporation. This can help them to avoid the several meetings and the voting proposals as well when the organization has encountered any emergency situation. Thus these kinds of regulations have been enlisted under this section of corporation act (Deva, 2013). However, the directors who are shareholder of proprietary companies or are single directors have some special rules for the powers to be exercised by them, which are explained under section 198E of Corporations Act (Farrar, 2015). Section 191: This particular law has been enacted to ensure the duties of the organization while contracting some other organization. As far as the historical perceptions are concerned, during the period of regional and national expansion of the business, it was important to prepare legal considerations for the franchisee development. Thus this law has been enacted with the specific exclusion and inclusion criteria. Section 191 states that every director is supposed to disclose his material personal interest (if any) to the board as the personal interests may clash with the duties of the directors. The decisions regarding the personal interest to be material are to be carefully judged by the director. The term material is defined as something which can influence a directors duties or voting and the term personal interest depicts when the state when a director gets any direct or indirect benefit (Li, 2014). The concept of material personal interest is important in the Act as it helps the business in settling conflict of interests. It is the duty of directors to ensure that they disclose any material personal interests if they have in any matter of the proceedings of the business meet their legal obligations (Tomasic, 2015). If a director fails to meet the legal obligations and provide a notice to other Directors, it shall be treated as an offence under section 191 (1A) of the Corporation Act 2001. Section 250R (2) Section 250R (3) As per Section 250R (2) of Corporations Act, the Remuneration Report is supposed to be presented by the company to its shareholders for their vote. The Remuneration Report is a part of the directors report that defines the policy of remuneration of the company and defines the arrangements of the remuneration for the non-executive and executive directors. Moreover, the subsection 1311(1) has also indicated the contravention is a legal offense. This shows that the AGM has the power to cast the vote of the chief director with written consent and under the mentioned circumstances in the subsection 250BD (1), which is already enacted under section 250R (2) and (3) both. Under Section 25R (2), the Remuneration Report needs to be tabled and the shareholders can have the chance to put a non-binding vote for the Remuneration Report (austii.edu, 2015). A resolution for the adoption of the Remuneration Report needs to be put to vote in AGM of a listed company. However, according to the section 250R (3) of the Corporations Act, the vote for the resolution is advisory in nature and the Directors of the Company are not bind by it and in case the directors fail to pass Resolution 1, there will be no requirement of modifying any arrangements specified in the Remuneration Report. Voting on advisory resolutions can be done by closely related parties or key members of the management. However, the personnel or any close member of such personnel from management who has their remuneration included in the report cannot take part in the vote (Dawson, 2009). References austii.edu. (n.d.). (2015). Legal Acts in Australia. Retrieved from https://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s250r.html Dawson, B. (2009, June 4). AsHurst Legal Acts and Corporattion Acts. Retrieved from https://www.ashurst.com/doc.aspx?id_Content=7608 Deva, S. (2013). Sustainable Business and Australian Corporate Law: An Exploration.University of Oslo Faculty of Law Research Paper, (2013-11). Farrar, J. H. (2015). The Move from Private Enforcement to Public Enforcement and Now the Move to Litigation Funding of Shareholder Activism: Are We Entering a New Era of Access to Justice in Corporate Law?.European Business Law Review,26(1), 75-93. Li, Y. (2014).Governance, Regulation, and Performance of Non-listed Small Corporations in Australia: a Structural Equation Modelling Approach(Doctoral dissertation, Victoria University). Tomasic, R. (2015). The Rise and Fall of the Capital Maintenance Doctrine in Australian Corporate Law.