Shareholders’ right to information

One of the tell tale signs of a shareholders’ dispute occurs when those with the access to information restrict access to it for others.  It’s very common for us to see this.  There are several reasons why a shareholder may require company information, primarily where a minority or oppressed shareholder loses control and is removed as a director.  There may be reasonable suspicions that the company is financially unstable or the conduct is oppressive to its shareholders.  These scenarios mean that a shareholder is not being provided with the full information on whether they are being oppressed.  On its face the aggrieved shareholder may think that little can be done.  This is not the case as the Corporations Act 2001 (Cth) (Act) provides for various mechanism for minority shareholders to obtain relevant information from the company.   [Read more…]

What is an Incorporated Joint Venture?

An incorporated joint venture, also commonly referred to as a corporate joint venture, an equity joint venture or a joint venture company (Incorporated Joint Venture) is a type of joint venture where the participants (Joint Venturers) arrange for the incorporation of a separate legal entity to pursue an agreed business objective.  The Incorporated Joint Venture may acquire assets of the Joint Venturers in exchange for the issuance of securities. [Read more…]

Value shifting in commercial transactions

It seems that everywhere you turn when structuring commercial transactions or when raising capital in Australia, tax issues need to be considered.  “Value shifting” is one such issue. [Read more…]

Can a third party be made to account for a breach of director’s duties?

It is an unfortunate reality that some directors of companies of all sizes engage in conduct that breaches their legal responsibilities.  In circumstances where a Court finds that the conduct of the director breached the standard of care that they owed, the Court has the power to award damages.  What happens, however, where a third party has received a benefit (knowingly or unknowingly) as a result of the director’s breach – can that third party be held accountable? [Read more…]

Tag along rights in shareholders’ agreements

“Tag along rights” are rights that are commonly included in shareholders’ agreements. As the name suggests, tag along rights effectively empower minority shareholders to “tag along” with a majority shareholders’ (Seller) sale of shares to a third party (Third Party).  [Read more…]

Federal government outlines proposed crowdfunding rules

The Australian Treasury has today, 4 August 2015, released a consultation paper providing the first details of the impending legislative framework for crowd-sourced equity funding (CSEF) for public companies.  The introduction of a legislative framework for CSEF’s is part of the 2015-16 federal budget package. [Read more…]

Shareholders’ agreements and inconsistency clauses

The case of Cody v Live Board Holdings Limited [2014] NSWSC 78 (Cody) highlights the need for careful drafting of Shareholders’ Agreements to ensure that there is no duplication of clauses in company constitutions. Shareholders’ agreements usually contain what’s known as an “inconsistency clause”. Such inconsistency clauses attempt to resolve ambiguity between overlapping or conflicting clauses in Constitutions and Shareholders Agreement in favour of the Shareholders’ Agreement. Cody provides guidance on the applicability of inconsistency clauses.

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Shareholder oppression

What is shareholder oppression?

Shareholder oppression can occur when the majority shareholders in a company misuse their power to oppress the minority shareholders.

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Prohibition on the acquisition of a relevant interest

Section 606 of the Corporations Act 2001 (Cth) (Corps Act) contains a prima facie prohibition against the acquisition of relevant interests in voting shares.

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Redeemable Preference Shares

Last updated 22/08/2015
According to the Australian Securities and Investments Commission (ASIC) preference shares are shares that give holders some right or preference.

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Tel: 07 3221 0013

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