directors

COVID imposed document e-signing to remain

Temporary measures were introduced under the Corporations (Coronavirus Economic Response) Determination (No 3) (Determination) to exempt certain persons from the operation of provisions interfering with their ability to manage their business through the impacts of COVID-19.  Section 6(3) of the Determination did away with standard requirements for signing requirements.  The measures expired as of 21 March 2021.  In light of continued impact of the pandemic both Houses of Parliament have passed the Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 (Bill) on 10 August 2021, which provides for electronic:

  • document execution;
  • notice of meetings;
  • electronic keeping of minutes; and
  • virtually held meetings.

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Shareholder oppression in equal ownership situations

When a company with two (2) or more directors who are equal shareholders with equal voting rights have a dispute, it often leaves the company in a deadlock.  It is common in these situations for one (1) director to attempt to assert that the other director has engaged in oppressive conduct under section 232 of the Corporations Act 2001 (Cth) (Act).  This article discusses shareholder oppression when both directors own equal share portions. [Read more…]

Are fiduciary duties owed by former directors?

Company directors owe various duties to their company and its shareholders.  For example, sections 180, 181, 182, 183 and 184 of the Corporations Act 2001 (Cth)(Act) impose statutory duties to exercise care and diligence, maintain good faith and refrain from using their position or information to gain an advantage for themselves.  However, the legislation, barring section 183, does not clearly express the extent to which these duties, as well as similar common law duties, continue to apply after a director has ceased being the director of a company.  Addressing this shortfall, the Court in Advanced Fuels Technology Pty Ltd v Blythe & Ors [2018] VSC 286 (Advanced Fuels) found that whether or not these duties endure after the cessation of a directorship depends on the facts and circumstances of each case. [Read more…]

Shareholders’ agreements & deadlock clauses

One of the most important issues to be addressed by a Shareholders’ Agreement is what happens where the directors or shareholders cannot agree and a deadlock arises.  In cases where voting of Directors of a board is proportional to the shareholding represented by the appointed director, or there can be a deadlock caused by “one vote, one director” care needs to be taken to ensure that control can be exercised by addressing the deadlock issue.  Of course the deadlock can also be between shareholders. [Read more…]

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