corporations act

Director’s right to inspect company records

The role of director comes with both statutory and common law fiduciary obligations which can result in a director being personally liable for debts incurred after the point in time when a company cannot pay its debts as and when they fall due.[1]   A director has an absolute right to access the books so that they can discharge their various duties.   Withholding access is often the first sign of some oppressive conduct.   A case that considered the statutory right to access the books pursuant to section section 198F Corporations Act 2001(Cth) is the case of Oswal v Burrup Holdings Limited [2011] FCA 609 (Oswal).   In Oswal, the Federal Court of Australia considered a director’s right to access company documents after the entity was placed into receivership and the Court’s powers to direct and limit such inspection. [Read more…]

Is it a debt – legal test and creditors’ statutory demands

A creditor may make a statutory demand for payment in an attempt to recover monies owed by a particular entity.  Some consternation may arise where there exists a genuine dispute about the existence or amount of a debt allegedly relating to a statutory creditor’s demand. [Read more…]

Just and equitable grounds – but what about that helicopter?

In Warner v Global Pacific Aerospace Pty Limited [2012] VSC 291 the Victorian Supreme Court held that it would be just and equitable to wind up the company following a breakdown in the relationship between the two (2) directors who were equal shareholders.  This article considers this case and the conduct was that was held to be oppressive. [Read more…]

Director identification numbers become a reality

In June 2020, the Federal Government passed the Treasury Laws Amendment (Registries modernisation and other measures) Act 2020 (No.69, 2020) – Schedule 2 (Act) which introduced the requirement for every director to obtain a Director Identification Number (DIN).  A DIN is a unique 15-digit identification number given to each director.   A director must only apply for a DIN once and will keep the number even if they stop being a director, change company, are the director of multiple companies or move interstate or overseas.  The purpose of a DIN is to allow for data collection to monitor director registrations and detect disqualified or fraudulent directors.   [Read more…]

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

Note: this regulatory relief has expired.  Please see Dundas Lawyers article: Covid imposed e-signing to remain.

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…]

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