- Business Associations Law Summary Notes!

What's in the Business Associations Law Summary Notes?

Our Business Associations Law Summary Notes provide a clear and complete synthesis of the most important points you need for your exam. The table of contents is shown below.

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First Year Subjects:

Contract Law Notes, Criminal Law Notes, Legal Professional Conduct Notes

Second Year Subjects:

Property Law Notes, Administrative Law Notes, Business Associations Law Notes

Third Year Subjects:

Litigation (Civil Procedure) Law Notes, Litigation (Criminal Procedure) Law Notes, Evidence Law Notes, Federal Constitutional Law Notes

Elective Subjects:

Commercial Law Notes, Intellectual Property Law Notes, Legal and Social Theory Notes

Table of Contents for Business Associations Law Summary Notes

1. Introduction

A. How to use Cram Notes

2. Background

A. Types of companies and corporations

i. Proprietary companies (Pty Ltd)

ii. Public companies (Ltd)

iii. Registration procedures

B. Decision to incorporate

3. Is there Separate Legal Personality?

A. Salomon’s Case

B. Piercing the Corporate Veil

i. Corporations Act

ii. Avoidance of obligations (Fraud, Device or Sham)

iii. Agency and Undercapitalisation

1) Agency

2) Undercapitalisation

4. Is the Corporate Constitution valid?

A. Nature and effect of the constitution

i. Replaceable Rules

B. Amendments to the constitution

C. Implications for shareholders’ rights

5. Have Meetings and Board Powers procedures been implemented correctly?

A. General meeting

i. Requirements and Notice

ii. Disclosure obligations (Common Law)

iii. Resolution

iv. Special Resolution

v. Residual control in general meetings (Doctrine of Unanimous Consent)

1) Where the board is unable to act

2) Ratification of directors’ acts

3) Informal corporate acts

vi. Irregularities

B. Board of directors

i. Powers of directors

ii. Appointing directors

iii. Removal of directors

1) Disqualification

iv. Managing director

v. Directors’ meetings

vi. Single shareholder/director companies

6. Are Contracts with Outsiders enforceable?

A. What authority did the person supposedly acting on behalf of the company have?

i. Actual authority

ii. Ostensible authority

iii. Protected under Indoor Management Rule or other statutory assumption as to authority

1) Statutory assumptions as to authority

2) Section 128(4) exclusion

7. Did Directors breach their duty to the company?

A. Duty of Care and Diligence

i. What was the standard of care required?

ii. Business Judgment Rule

B. Duty to act in Good Faith in Best Interests of the Company

C. Duty to act for a Proper Purpose

i. What is the legal purpose for which the power may be used?

1) Proper purposes

2) Improper purposes

ii. Has the power been used for proper purpose as a matter of fact?

D. Duty to avoid conflicts

i. Was there a personal interest?

1) Fettering the exercise of discretion

ii. Was there adequate disclosure of a material personal interest?

iii. Were statutory disclosure obligations satisfied?

E. Duty not to make secret profits

i. Was there a secret profit?

ii. Was there a ratification of the breach?

iii. Businesses started by former directors

iv. Directors personally benefiting from opportunity turned down by the company

v. Statutory duty

F. Related party transactions

i. Was a financial benefit given?

ii. Was there an exception?

iii. Were procedural requirements for approval followed?

G. Statutory duty to prevent insolvent trading

i. Was the person a director at the time the debt was incurred?

ii. Is there a debt?

iii. Did the debt that was incurred cause insolvency?

iv. Are defences available?

8. Can the Director rely on an Indemnity?

9. Is there Standing to sue the Director or the Company?

A. Suing the directors

i. Shareholders suing directors for breach of fiduciary duty

1) Directors buying shares from shareholders

ii. Statutory derivative suit

1) Probability that the company itself will bring proceedings

2) Good faith

3) In the best interests of the company

B. Suing the company

i. How to impute knowledge to the company

ii. Shareholders suing company as a personal action

iii. Shareholders suing company for other wrongs committed by company to shareholder in a collateral capacity

iv. Shareholders suing company for fraud on the minority

1) Ratification

2) Constraints on exercise of power by special majority in changing constitution

3) Infringement of personal rights by breach of directors’ duty

v. Statutory oppression remedy

1) Unfairly prejudicial or discriminatory

10. Remedies

A. Common Law remedies

i. Rescission of contract

ii. Account of profits

B. ASIC Declaration of contravention

C. Statutory oppression

D. Statutory winding up

i. Just and equitable

ii. Directors have acted in affairs of company in own or others’ interests (s 461(1)(e))

E. Statutory insolvent trading