Fiduciary and Company
Introduction
The concept of fiduciary obligations or duty is one of the most important areas in Australian law. In this project, I will try to illustrate and explain the duties in three kinds of relationships including the relationship between a director and a company, the relationship between the promoters and the corporation and the relationship between business partners. In each relationship, what kinds of the fiduciary duties should be performed is elaborated in details. The aim of the project is to help the readers to understand what “fiduciary obligations” actually means in Australian law.
Fiduciary Duty of Directors
According to the general law and the Corporations Act ss181 -184, as fiduciaries, the directors must have the fairness, loyalty and good faith when they implement the discretions and powers entitled to them. They cannot use their position of trust to benefit themselves at the expenses of the business without the company’s consent and full knowledge. In other words, we can say since the directors are acting on behalf of their company, they owe the duties of loyalty and good faith due to the fiduciary relationship with the companies. In addition, refer to the Corporation Act ss180, and the case of Percival v Wright 1902, the directors owed duties to the company but not shareholders individually. On the other hand, in depth, the fiduciary obligations of the directors can be divided into four aspects: 1. Directors have the duty to act in good faith for the interests of the company
This duty arises from the general law- especially from principles of fiduciary law and ss181 and 184 of the Corporations Act. Under this duty, the directors should practice their bona fide in the way that they think is the interests of the company. Re Smith & Fawcett Ltd. This means the directors should give suitable considerations to the interests of the company as a whole in their decisions making process. However, there is difficulty in identifying which
The concept of fiduciary obligations or duty is one of the most important areas in Australian law. In this project, I will try to illustrate and explain the duties in three kinds of relationships including the relationship between a director and a company, the relationship between the promoters and the corporation and the relationship between business partners. In each relationship, what kinds of the fiduciary duties should be performed is elaborated in details. The aim of the project is to help the readers to understand what “fiduciary obligations” actually means in Australian law.
Fiduciary Duty of Directors
According to the general law and the Corporations Act ss181 -184, as fiduciaries, the directors must have the fairness, loyalty and good faith when they implement the discretions and powers entitled to them. They cannot use their position of trust to benefit themselves at the expenses of the business without the company’s consent and full knowledge. In other words, we can say since the directors are acting on behalf of their company, they owe the duties of loyalty and good faith due to the fiduciary relationship with the companies. In addition, refer to the Corporation Act ss180, and the case of Percival v Wright 1902, the directors owed duties to the company but not shareholders individually. On the other hand, in depth, the fiduciary obligations of the directors can be divided into four aspects: 1. Directors have the duty to act in good faith for the interests of the company
This duty arises from the general law- especially from principles of fiduciary law and ss181 and 184 of the Corporations Act. Under this duty, the directors should practice their bona fide in the way that they think is the interests of the company. Re Smith & Fawcett Ltd. This means the directors should give suitable considerations to the interests of the company as a whole in their decisions making process. However, there is difficulty in identifying which