3 corporations act s128 129 of the act state that an

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3. Corporations Act – S128-129 of the Act state that an outside dealing with a company can make a series of assumptions, even when there is no constructive notice given, or where the dealings involve fraud or forged documents. Part 2 – Internal Operations of the Company The Constitution s140(1) Statutory contract – terms of the corporate bind the company and all its members with the terms of a deemed special statutory contract. Section 140 has the effect of a contract between: The company and its members The company and its directors and secretaries Between the members themselves Amending the Corporate constitution – It can be legally altered by passing a special resolution, which requires 75% of the majority vote by the members and following a basic procedure. The primary restriction on the alteration of the constitution are contained in the Corporations Act: - Section 140(2) prohibition of any imposition of further liability on members by requiring additional shares to bet taken up or increasing a member’s liability to contribute capital - Section 232-234 protection of minority members against oppression or the majority acting in an unfairly prejudicially manner Membership Becoming a member – Any person with legal capacity to own property may become a member of a company Register of members – The details of each company member are recorded on the Register of Members maintained by the company under s169. Members’ meeting There are two types of members’ meetings: 1. Annual General Meeting (AGM) held each year to consider the company annual report and the annual financial accounts and also to elect directions. 2. Extraordinary General Meeting (EGM) is held only when a particular issue arises that requires urgent consideration and approval of the members Procedural irregularities at a meeting Challenging the result of meetings – There are several defects that may arise when a meeting is held: 1. Defect in the notice of the meeting either the notice was too late (less than 21 or 28 days), or the details of the notice are incorrect, incomplete or misleading; 2. The minimum number of persons required to the meeting (quorum) has not been met. The corporate constitution will usually set out the quorum required for members’ and directors’ meetings. Section 249T
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provides that the required quorum for members’ meetings is two members who must be present for the duration of the meeting. 3. Meeting may have been invalidly conducted because it failed to comply with the required procedure set down in the Corporations Act or in the company’s constitution for conducting a meeting. 4. The matters considered within the meeting are impermissible. Case studies: Gambotto v .WCP Ltd (1995) NRMA v. Parker (1986) Whitlam v. ASIC [2003] Lecture 4: Corporate decision-making and corporate governance Corporate Decision-Making Meetings of the board of Director’s Each of the director’s on the board owes an obligation to the company to convene and attend regular board meetings.
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