Draft Ass 2 - Revised

Draft Ass 2 - Revised - The Case of Batik Pty Ltd Batik Pty...

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The Case of Batik Pty Ltd Batik Pty Ltd (BPL) incorporated in 2002. It means that the company has a choice to decide whether its internal rules will be comprised a constitution or the replaceable rules in the Corporation Act or the combination of both. Question 1: Removal of Adam as managing director The provision in BPL’s constitution dealing with the appointment of director for life has contractual effect under s140(1)(b). It means that if the company wants to remove or terminate its appointment of director during the period of service contract, it will be a breach of contract. Moreover, alteration of contract is only valid when all the parties give their consent (Lipton & Herzberg, 2008, p.90). However, the fact that a company can alter its constitution or displace applicable replaceable rules by doing correct procedures can have an influence on s140(1)(b) contract. In the BPL case, provision of BPL’s constitution dealing with appointment is subject to alteration of the constitution under s136 of Corporation Act: Shuttleworth v Cox Bros and Co (Maidenhead) Ltd [1927] 2 KB 9. As a result, Adam can be dismissed as managing director, as long as the removal procedures satisfy the requirements under the Corporation Act, consisting of modifying constitution by a special resolution: s36(1) and s136(2), fulfilment of 75% of members’ vote to pass a resolution: s9 and notice of meeting which state the intention to propose special resolution: s249L(c). The correct removal procedures under those sections will not impose contractual obligation to the company when there is no separate employment contract. However, the contractual obligation of the company cannot be avoided even when an alteration of constitution occurs in the circumstance that directors
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This note was uploaded on 09/21/2011 for the course CMA 203 taught by Professor Simonmorris during the Three '10 term at Charles Darwin.

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Draft Ass 2 - Revised - The Case of Batik Pty Ltd Batik Pty...

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