legal articles

Just and equitable winding up for shareholder oppression

In matters involving the oppression of minority shareholders by the majority the usual legal remedy is to pursue relief for oppression as contained in sections 232 and 233 of the Corporations Act 2001 (Cth)(Act). However section 233(2) of the act also allows for an aggrieved party to seek an order winding up the company on just and equitable ground as if the order were made under section 461.  Section 233(2) represents the intersection of the just and equitable winding up and shareholder oppression. [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…]

Standard form IT procurement contracts – legal issues

Standard form IT procurement agreements are commonly used by businesses which have an established procurement department to standardise the commercial and legal procurement process.  Below we address key terms in standard form IT procurement agreements which suppliers should look out for when presented with one. [Read more…]

What is in a network access agreement?

Network access agreements are agreements between licenced carriers in which a carrier (First Carrier) gives another carrier (Second Carrier) access to its network, which the Second Carrier can then access to provide telecommunications services to end customers or other wholesale carriers.   Below we set out the key considerations, carriers need to cover in their network access agreements. [Read more…]

Software as a Service agreements revisited

Offering software as a cloud-base software solution is important in this ever-increasing cloudy environment.  In a previous article we discussed the legal considerations for those commercialising a software as a service agreement (SaaS Agreement) as a business model.  Below we revisit SaaS Agreements and set out key issues to consider when going to market. [Read more…]

QBCC Home Warranty Insurance claim exclusions

Part 5 of the Queensland Building and Construction Commission Act 1991 (Act) establishes a statutory insurance scheme, the purpose of which is in certain situations to provide basic assistance to consumers of residential construction work for loss associated with work that is defective or incomplete. [Read more…]

QBCC Home Warranty Insurance Claims – part 3

Part 5 of the Queensland Building and Construction Commission Act 1991 (Act) establishes a statutory insurance scheme, the purpose of which is in certain situations to provide basic assistance to consumers of residential construction work for loss associated with work that is defective or incomplete.

As part of the building process, the builder pays a premium to the Queensland Building and Construction Commission (QBCC) to insure the residential construction work, the amount of the premium being included as part of the contract price and paid to the QBCC before the residential construction work commences.  However, many consumers of residential construction work are uncertain about the exclusions under the QBCC Home Warranty Insurance scheme. [Read more…]

Division 7A ITTA 1936 (Cth) – compliance & consequences

Division 7 (sections 102V to 109ZE) of the Income Tax Assessment Act 1936 (Cth) (Tax Act) contains specific requirements for advances of moneys and loans between private companies and its shareholders or associates.  Section 109B of the Act describes three (3) classes of payments which will be deemed to be dividends: [Read more…]

What is a section 293 direction?

There are several reasons why a shareholder may require financial information, primarily they are denied access to the ‘accounts’ so as to make informed decision about the company.  The Corporations Act 2001 (Cth) (Act) provides various mechanisms for shareholders to obtain financial and accounting information about a company, to allow them to access full and complete information about the financial circumstances of the company that they hold shares in.  One such mechanism is referred to as a section 293 shareholder direction, which compels companies to provide requested financial reports as defined by section 293. [Read more…]

Director misappropriating funds found to be oppressive

Shareholder oppression usually occurs when a majority shareholder(s) misuses their power to oppress the minority shareholder(s).   The test for “oppression” is an objective one and is contained in Section 232 of the Corporations Act 2001 (Cth) (Act).   For instance, where a director is found to have breached their fiduciary duty because they have misappropriated funds or assets this can be considered as being oppressive conduct.  This was the case in Martin v Australian Squash Club Pty Ltd (1996) 14 ACLC 452 (Martin) when an executive director misappropriated and misused company funds and assets and was held to have breached his fiduciary duties. [Read more…]

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