Company Law Assignment
Question 1
James runs a single director proprietary company called Jamboos Pty Ltd
a) Explain the rules that Jamboos must operate under and James' powers under the Corporations Act.
In Corporations Act, S198E, 201F and 202C contain certain provisions that govern the operation of single director companies. These provisions apply whether or not the single shareholder company has adopted a constitution which include:
The director may appoint another director by recording the appointment and signing the record: s 201F.
The director may exercise all of the powers of the company except any powers that the Corporations Act or the company's constitution requires the company to exercise in general meeting: s 198E(1)
The business of the company is to be managed by or under the direction of the director: s198E(1)
The director may execute a negotiable instrument such as a cheque, and may determine that a negotiable instrument may be executed in a different way: s 198E(2)
The director is to be paid any remuneration for being a director that the company determines by resolution. The company may also pay the director's traveling and other expenses properly incurred by the director in connection with the company's business: s 202C.
Where something must be done by the member of a single director company in their capacity as a member, it can be done by the member recording a resolution in writing and signing it. This is provided for under s 249B of the Corporations Act, The resolution must be recorded in the company's minute book: s 251A.
Section 201F deals with the situation where the sole participant in a single director company dies or is otherwise incapacitated, by providing for their personal representative to take over the company.
b) James is considering bringing his brother into the company as a shareholder. Explain what difference will make to the company.
When James brings his brother into the company as a shareholder, the company issues shares to James' brother. One
James runs a single director proprietary company called Jamboos Pty Ltd
a) Explain the rules that Jamboos must operate under and James' powers under the Corporations Act.
In Corporations Act, S198E, 201F and 202C contain certain provisions that govern the operation of single director companies. These provisions apply whether or not the single shareholder company has adopted a constitution which include:
The director may appoint another director by recording the appointment and signing the record: s 201F.
The director may exercise all of the powers of the company except any powers that the Corporations Act or the company's constitution requires the company to exercise in general meeting: s 198E(1)
The business of the company is to be managed by or under the direction of the director: s198E(1)
The director may execute a negotiable instrument such as a cheque, and may determine that a negotiable instrument may be executed in a different way: s 198E(2)
The director is to be paid any remuneration for being a director that the company determines by resolution. The company may also pay the director's traveling and other expenses properly incurred by the director in connection with the company's business: s 202C.
Where something must be done by the member of a single director company in their capacity as a member, it can be done by the member recording a resolution in writing and signing it. This is provided for under s 249B of the Corporations Act, The resolution must be recorded in the company's minute book: s 251A.
Section 201F deals with the situation where the sole participant in a single director company dies or is otherwise incapacitated, by providing for their personal representative to take over the company.
b) James is considering bringing his brother into the company as a shareholder. Explain what difference will make to the company.
When James brings his brother into the company as a shareholder, the company issues shares to James' brother. One