Corporate Law - Question 1 


  • Whether Robin’s share issues are valid or not?
  • What shall be the consequences of Robin’s directorship?


Australian Corporation Act 2001


In the light of the present facts and circumstances of the case, the Corporation Act of Australia 2001, section 179 tells us about the duties of directors and other officers and employees working in an organization, the section lays down that the most significant duties of directors, secretaries, and other employees of office or corporation. Further, the duties imposed by other provisions of the Act includes every law related to it even the general law. Section 9 of the Act tells about the officer and director. An officer and a director include the people working in the corporation either secretaries or the collectors and outlets. Area 182 of the Act gives the employments of the position of executives and different officials and representatives at the partnership, sub-section (1) gives that a chief, secretary, different officials or worker of an enterprise must not inappropriately utilize their situation to increase a favourable position for themselves or another person, and cause disadvantage to the organization, sub-section (2) furnishes with an individual who is associated with a negation of subsection (1) repudiates this particular sub-section. In the present case, Robin worked as management assistant in McDonald’s for at least 15 years before becoming the CEO of a software sales company headquartered in Wagga Wagga. Later, Robin decided to invest in a start-up tech company 4Eyes Pty Ltd providing remote proctoring services to universities. 4Eyes has only ordinary shares and 10 shareholders.

There are three directors: Larry, Curly and Moe. Here, Moe attends to issues of corporate governance. Robin was the second investor in the company and has invested $500,000 to buy 500,000 shares, also Robin forwarded and invested $ 1,000,000 into the company account. Furthermore, demands for the product gone well and robin was facing some challenges. Recently, one of the shareholders of the company started complaining about the claim Robin about the authority to issues shares to herself because she was not compiled with the constitution also Robin is not the director. The corporate constitution contains the provisions that there shall be no shares issued without a special resolution of the members, there shall be no directors except Larry, Curly and Moe. Also, any director can loan money to the corporation and have it secured upon the approval of the Board of Directors.


As abovementioned facts and circumstances clearly state that Robin is the second investor in the company also as mentioned in the Constitution of Corporation, Robin’s name is not mentioned and so she cannot be or cannot claim for being a director. Robin’s issues related to shares are valid only if she is a shareholder and not the director of the corporation.

Corporate Law - Question 2


  • Whether the investments of the company will go into the administration?
  • What are the differences between Robin’s share and the secured debt investments?
  • Whether the lease agreement between 4Eyes and RA Pty Ltd valid or not?


Australian Corporation Act 2001


In the light of present facts and circumstances of the case according to the Act of 2001 section 191-194 gives the material individual enthusiasm for executive's obligation to unveil, a head of an association who has a material individual energy for an issue that relates to the endeavours of the association must give various officials notice of the interest aside from if subsection says something different. For an offence subject to, demanding danger applies to the circumstance, that the official position of an association has a material individual excitement for an issue that relates to the issues of the association. The executive doesn't have to pull out of an enthusiasm under subsection if: the intrigue: emerges on the grounds that the executive is an individual from the organization and is held just the same as different individuals from the organization; or emerges according to the executive's compensation as a head of the association;

or relates to an understanding the association is proposing to go into that is reliant upon support by the people and won't power any dedication on the association in the event that it isn't affirmed by the individuals; or emerges simply on the grounds that the executive is an underwriter or has given a reimbursement or security for all or part of a credit (or proposed advance) to the organization, section 124 of the Australian Corporation Act 2001 it has been referenced and furthermore gives an association a comparative legal cutoff as an individual remembering the capacity to make due with a comprehension and section 125 effectively gives that the display of a showing including section into a comprehension by an association won't be invalid essentially in light of the fact that it is past the force of the association's constitution.


As per the abovementioned facts and situation of the case, it has been clear that the information and capacity as an individual regarding the making of the power or an agreement shall not be invalid and it is beyond the power of the constitution of the company. Legal actions can be taken against Robin for not disclosing the information under section 191-194 and also it might be considered as fraud under section 596 of the Corporation Act 2001 for the lease of $10,000 which should be of $2,000 per month. Also, the investment shall be of the company and not of the sole director.

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