What rights to directors have to information?
Molomby v Whitehead (1985): There are limitations placed on access as outlined below bad faith, need
to know or good reason for access. The onus is on the Court.
Section 198F: Right to access company books.
The Corporate Constitution and Decision Making by
the Board of Directors
A company traditionally needed to have its own constitution (article of association) in addition to its
incorporating document (memorandum of association). This was re
Separate legal personality
The idea of a company is that it has a separate legal personality to its members or directors. Corporate
personality and limited liability are closely linked.
Corporate personality serves the function of marking
How can directors be dismissed?
There are a number of ways in which directors can be dismissed:
Removal by members (in proprietary companies): s 203C
Removal by members (in public companies): s 203D
Directors cannot be removed by other directors in public
Directors meetings - how does the Board make effective decisions?
Circulating resolutions: s 248A
Calling directors meetings: s 248C
Use of technology: s 248D
Appointing a chair of directors meetings: s 248E
Quorum at directors meetings: s 248F
Fraud or improper conduct
Shareholders using the corporation for the purpose of fraud or an improper purpose will not not
protected by the corporate veil and limited liability. This was discussed in a number of cases, for
example Gilford Motor Co Ltd v Ho
Corporate personality within corporate groups
The fundamental principles that each [company within a group] is a separate and independent legal entity,
and that it was the duty of the directors of [each company] top consult its interests and its interests
The separate personality of the corporation
The modern conception of a separate legal entity and limited liability were established in the
landmark case of Salomon v Salomon & Co Ltd:
Mr Salomon had a business selling boots and at one point he m
Residual control in the general meeting
There are certain instances where the general meeting retains what might be thought of as some measure
of residual control over directors:
Where the board is unable to act
If there is a deadlock upon the board or if
General principles of interpretation of constitutional provisions
The old common law principle was that, where the statute or constitution makes no provision as to which
organ has the power with respect to a particular matter, or the organ is unavailable,
Appointing and removing directors
The appointment and removal of directors is found in Part 2D.3. For appointment see ss 201A 201M and
for removal see ss 203C 203F (pp 248 52).
These rules aim to strike a balance between the goals of assuring directors te