corporations act

Tortious interference with contract – what must be proven?

Unlawful interference with contractual relations (Interference) is a tort that allows  damages to be claimed against a Defendant who has induced or procured a third party to breach their contractual obligations to the Plaintiff in the proceedings.  In essence, a Defendant’s intention to induce or procure an entity to act or refrain from acting whilst being aware that such an action would result in said entity breach its contractual obligations to the Plaintiff gives rise to the Interference.[1]  This article outlines the elements needed to be proven in order to establish an Interference. [Read more…]

What are the legal requirements of crowdfunding in business?

The Australian Securities and Investments Commission (ASIC) defines equity-based crowd-sourced funding (CSF) as:

… a company raising funds—usually through an online intermediary—from a large number of individual investors who make relatively small financial contributions to the company… [and] a fundraising option for start-ups or small to medium-sized companies.[1] [Read more…]

What is a Case Management Hearing?

In the Federal Court of Australia, a case management hearing is a meeting of the parties and the Court to identify issues at the earliest possible stage (Case Management Hearing).[1]  They are the essential element of, and main procedure used in achieving, case management.[2]  In Queensland Courts, they are referred to as case management conferences.[3]  Case Management Hearings may be referred to by different terms in each State.  This article discusses Case Management Hearings in the Federal Court. [Read more…]

Companies can no longer e-sign documents

As of 21 March 2021, the Corporations (Coronavirus Economic Response) Determination (No 3) 2020 (Cth) (Determination) lapsed because it reached the end of its six (6) month period as prescribed by section 9(3) of the Determination.  This means that the ability for companies to execute documents electronically, or e-signing, is no longer acceptable under subsection 127(1) of the Corporations Act 2001 (Cth) (Act).  Section 6(3)-(4) of the Determination authorised e-signing in response to the COVID-19 restrictions, as stated in the Explanatory Statement:  [Read more…]

Can a company be wound up under s 461K for failing to achieve its objectives?

The recent New South Wales Supreme Court (NSWSC) case In the matter of Gearhouse BSI Pty Ltd [2021] NSWSC 98 (Gearhouse) provides further guidance on the Court’s power to wind up a company under section 461(1)(k) of the Corporations Act 2001 (Cth) (Act).  This article discusses Gearhouse and how it applies section 461(1)(k). [Read more…]

Implications for directors resigning from 18 February 2021

Last year, the Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020 (Phoenixing Act) was enacted to target illegal phoenix activities, where directors create a new company to continue the business of an existing insolvent company to escape paying outstanding debts.  The Phoenixing Act introduces several amendments to the Corporations Act 2001 (Cth) (Corporations Act).  The changes introduced by the Phoenixing Act mainly seeks to prevent directors from improperly backdating resignations or resigning leaving a company without any directors. [Read more…]

Relief for companies during COVID-19

On 24 March 2020, the Federal Government passed the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) (Act).  As a part of the Act, insolvency and corporations laws have been temporarily amended in light of the financial challenges businesses are facing in the wake of COVID-19.  The changes made are intended to avoid unnecessary insolvencies and bankruptcies by providing a safety net for companies and their directors during the pandemic.  This article will discuss the key changes. [Read more…]

Risks of making financial forecasts

When a business is seeking to raise capital or advertise as being for sale financial forecasts are often made in a way so as to appeal to the target audience – investors or potential buyers.  In some cases however, the forecasts made do not translate into reality giving rise to potential legal consequences.  As forecasts are indicators often relied used by investors to make decisions on whether or not to invest, statements that are incorrect may amount to misleading and deceptive conduct under the Australian Consumer Law (ACL) (being Schedule 2 to the Competition and Consumer Act 2010 (Cth)) and have potentially serious legal consequences. [Read more…]

A director’s duty to act in the best interests of the company: MG Corrosion Consultants Pty Ltd v Gilmour

The case of MG Corrosion Consultants Pty Ltd v Gilmour [2014] FCA 990 involved allegations of a director authorising unnecessary and excessive payments that caused detriment to a company and its shareholders.  This case serves as a reminder to directors of the importance of adhering to their duties under the Corporations Act 2001 (Cth) (Corporations Act).

[Read more…]

Restraint of trade clauses in commercial contracts

A restraint of trade occurs where one party (Covenantor) agrees with another party (Covenantee) to restrict their liberty in the future to carry on trade with other persons who are not parties to the contract see: Petrofina (Gt Britain) Ltd v Martin [1966] Ch 146 at 180.

Restraints of trade clauses are prima facie void, however, the presumption can be rebutted if the restraint is justified because it is reasonable in the circumstances.    Note that there is a significant divide between restraints in commercial contracts and those in employment contract with the latter being widely accepted as only being enforceable for a far shorter period of time. [Read more…]

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