16 A.) Formation and Structure 16 B.) Debt, Equity, and Valuation 22 III.) CONTROL OF CORPORATE DECISIONS 32 A.) The Role of the Shareholder 32 B.) Management Obligations 50 1.) Duty of Care 51 2.) Duty of Loyalty 56 3.) Duty of Fairness: Parent-Subsidiary Relationships 63 4.) Duty of Good Faith 64 5.) Management Obligations Under Federal Securities Laws 67 C.) Shareholder Litigation 76 IV.) Structural Changes 85 A.) Transactions in Control 85 B.) Mergers and Acquisitions 86 1.)
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Jurisprudence: Compare our case to prior cases in order to convince judges they should rule in our favour. Lower court judges are obligated to follow decisions of higher courts in similar cases (stare decisis). We will do the same with our cases. Case Summary The facts: The evidence in the case allows us to compare to our case. Legal Issues: What legal questions need to be determined? Decision: What is the ruling? Ratio decidendi: What are the reasons for the decision? What laws are applied? This
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is made ; and b. a decision-maker must not be biased (the “bias rule”). Bias may be actual or perceived. It may manifest itself in the decision maker’s personal associations or interests or in the structure of the decision-making process . 9. The duty to provide procedural fairness arises under common law doctrines, which has been extended in FAI Insurances Ltd v Winneke (1982) 151 CLR 342, 360 . 10. The right to be heard adequately is the fundamental principle of procedural fairness. There is
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liquidity of a firm. It represents the margin of safety or cushion available to the creditors. The company in this Case # 1 has relatively high current ratio. It is an indication that the company is liquid and has the ability to pay its current obligations in time and when they become due. Current ratio should be used very carefully because it suffers from many limitations and it should not be used as the sole index of short term solvency. Because it measure only the quantity and not the quality
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Duties of promoter The promoters take possession of important position and responsibility towards the incorporation of a company. Promoters stand in fiduciary relationship with the company they are promoting. The fiduciary obligations of a promoter will arise automatically once he or she becomes the promoter of the company. There are some major duties of the promoter imposed by the court. First of all is acting bona fine. ‘Bona fide’ is originally a Latin word which means doing and presenting
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Law of Business Organisations SUMMARY 2010 LAWSKOOL PTE LTD BUSINESS ORGANISATIONS LAW TABLE OF CONTENTS 1 :Types Of Business Organization.................................................... 9 1.1 Sole Proprietorships .......................................................................................... 9 1.2 Partnerships ..................................................................................................... 10 1.3 Limited Liability Partnerships ..............
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Date issued: 4 July 2011 The Centro Case has shone the spotlight on the duties of directors after the court found in favour of the Australian Securities and Investments Commission (ASIC) and ruled that the directors breached their duty of care in the preparation of the company’s financial statements. As the reporting season begins, members who are directors, chief financial officers or who are involved in preparing financial statements, will need to carefully consider the key messages in this
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Therefore shareholder defined as member of company .A shareholder has certain rights and liabilities by law. Unlike the owners of sole proprietorships or partnerships, corporate shareholders are not personally liable for the company’s debts and other obligations. Also, corporate shareholders do not play a major role in running the company. The shareholders are the proprietors of the company. Definition of Shareholder A shareholder is an individual or institution that legally owns a share of stock in
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C O M M E N TA RY A Tale of Two Companies The Danone-Wahaha partnership once seemed ideal, but the companies’ relationship has deteriorated. What lessons can be learned from the dispute? Jingzhou Tao and Edward Hillier T he Danone-Wahaha dispute is a story of the relationship between two very different entities against a backdrop of incredible change. The dispute reveals many questions that China faces as it integrates into the world economy, such as what to do when rule of law leads
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The Board of Directors are aware of the risks of diversification away from the Company’s existing core business and are anxious to limit the resulting risks of such a move. Accordingly, they have decided that a new company, which will be a subsidiary of XYZ Ltd. Should be set up for the purpose of carrying on the new business. The Finance Director of XYZ has been asked by the Board to advise on the funding options for the subsidiary. You are have been asked by the Finance Director to assist in
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