Tuesday, May 5, 2020

Corporation Act Case of Daniels v Anderson

Question: Discuss about the Corporation Act Case of Daniels v Anderson. Answer: Issue Under the Corporation Act 2001 (CTH): The issues, arises the decision of Gordon, can upgrade the actual idea of Jamie who can accept to rescue the company from economic collapse. Now the case was involves criticized the business operation in consideration with the regulations of corporations Act 2001. Law As per the case study, this case, it could be said that the regulations of Corporation Act 2001 needs a company and management to disclose the organizational document with respect to the business details. The regulations of Corporation Act 2001 section 180- 197 presents the facts where the directors of the company also act as per due diligence, good faith and integrity by utilizing the position and equal information within the company. In section 191- 196 of Corporation Act requires the directors of the company to provide all the relatable disclosure depend on the business activities for avoid the potential conflict of interest and to prevent insolvent trading. Section 180 (2) of the Corporations Act 2001 established that sometime taking a business decision or judgment, it is essential to take decisions by allow the exact business purpose and in good faith. It is also establish that the directors of the company must never have any material interest at the time of taking any business project or subject matter for business operations. The regulation of this act also provides that the directors can be applied to take business decisions based on the best interest of company where they together work with the benefits of the companys stakeholders. Application As per the case study, the regulations of Corporation Act for duties of directors and managers to be performed while considering business decisions, it can be said the present case involves many issues for performing the business activities for providing meals to the school. As per the rulings held in case of Healey v Australian Securities and Investments Commission (2011) FCA 717, court added that the directors of the company failed to provide appropriate disclosure for liabilities and debts. It was held that the director of the company failed to provide information on short- term guarantees and other short- term liabilities, reflecting the breach of section 180(1) affecting the companys true and fair view. Accordingly, it can be said that in the present situation, Gordon noticed the huge loss within the business but failed to disclose the information about the lack of money to pay debts. Again in the case of Daniels v Anderson (1994) SC of IL, the court contended the equitable conversion, the party breached the regulations for not providing the duty with due care as well as appropriate skill. Similarly, in the present case it has been noted that the concerned person of the company failed to disclose the failure of business project at the time of giving the idea of up gradation in the original business plan was also not disclosed. Conclusion According the case study, the directors of the company failed to disclose proper information, which gives results of in huge loss in the business income, Gordon, could be said to have breached the regulations of section 180. Accordingly, Gordon had recommended reviewing the actions of the directors and filing a legal application for breach of regulation.

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