LAWS3100 Corporations Law - Corporate Governance 2 Summary

  • Limits on Members’ Powers
    • Members have limited decision-making power to protect minority interests and avoid oppressive resolutions.
    • Key limitations include voting rights, resolutions affecting dissenters, and restrictions on member decision-making.

  • Reasons for Restricting Member Power
    • Aims to prevent majority exploitation of minority shareholders.
    • Protects against issues arising from illiquid shareholdings.
    • Legal protections provided by Common Law and Corporations Act 2001.

  • Equitable Limits on Voting Power
    • Majority voting can be limited when it conflicts with shareholder interests.
    • Resolutions can be voided if beyond legal powers, often linked to the oppression remedy.

  • Directors and Company Officers
    • Definition includes directors, company secretaries, and influential individuals in decision-making (Sec 9 CA).
    • Officers must be over 18 and ordinarily reside in Australia (Sec 204A).
    • Company secretaries have core functions, including compliance reporting and record-keeping.

  • Director Appointment and Removal
    • Directors can be appointed by members or board; must comply with certain qualifications.
    • They can leave through term ends, resignation, removal by members, or disqualification.
    • Disqualifications can be automatic, court-ordered, or by ASIC, with varying durations.

  • De Facto and Shadow Directors
    • De facto directors are those acting in the role without formal appointment.
    • Shadow directors influence board decisions without formal title; defined by a causal connection to directors’ actions.

  • Board of Directors’ Role
    • Manages and directs company operations; structure varies by size and type.
    • Decision-making procedures detailed in company constitution; includes provisions for meetings and resolutions.

  • Decision-Making Procedures
    • Directors can call meetings with reasonable notice (Sec 248C); quorum is typically two (Sec 248F).
    • Resolutions require majority approval (Sec 248G), and minutes must be maintained (Sec 251A).
    • Directors have rights to financial records and information about legal proceedings related to their duties.