Further Consideration Of Theoretical Readings Notes

Class 9: Further Consideration of Theoretical Readings (Classes 6 & 8) and Discussion of Essay Topics and Problem Questions.

This class is your opportunity to get early in semester feed-back (or perhaps more accurately ‘feed-forward’) for the quiz and your essay.

Reading: Complete your reading of the materials from Classes 6 & 8. We will complete our theoretical discussion by applying the theoretical ideas to some of the legal doctrines you have already learned and some you will encounter in the rest of the course (approx 1 hour).

Come to this class with a synopsis of your essay complete. We will discuss likely lines of argument and approaches to the essay topics to help you perfect your synopsis.

A practical structure for the synopsis might be:

1. The question;

2. 100 word abstract/summary of the central argument;

3. a discussion of background showing what makes the question significant;

4. discussion of about 2-3 issues or aspects which elaborate the answer to the question and possible conclusions;

5. a list of a dozen or so books, articles, policy papers etc which have been consulted and which are likely to be relied on in the essay, and your reasons for adopting these works.

This should all fit on 2 sides of an A4 page – and remember, you only have 2,000 words so keep it focused on the question (approx 30 mins).

Directors:

• Cassandra, Betta, Katie, Rohan, Lochie

• And Winsome who owns the majority of the shares.

You should also consider the following problem question for the class and attend with roughly sketched out answer (approx 30 mins):

1. Lasar Pty Ltd (Lasar) is a company incorporated in 2007. The share capital of the company is $75,000 divided into 60,000 $1 ordinary shares and 15,000 preference shares. All shares have one vote. The constitution provides that no allotment of shares may be made without the consent of Cassandra, the managing director. The other directors are Betta, Katie, Winsome, Rohan and Lochie. The constitution is otherwise identical to the replaceable rules.

In 2009 a meeting of directors is held. At the meeting it is proposed that the company allot a further 10,000 preference shares to ordinary shareholders. Four of the directors agree with this proposal; however, Cassandra will not give her consent. The board also considers whether to begin proceedings against two of its directors, Betta and Katy. Winsome who owns the majority of the shares in the company claims that Betta and Katy have debts outstanding to the company totaling $500,000. Five of the directors, including Betta and Katy, vote against the company commencing such proceedings.

Winsome says that both the issues should be considered by the general meeting and decides to convene a general meeting to pass ordinary resolutions authorizing the company to allot 10,000 preference shares to ordinary shareholders and to commence proceedings for the recovery of the debts owing to the company be Betta and Katy.

Fourteen days notice of the general meeting was given and the notice was given to all shareholders. At the general meeting the resolutions were passed.

Leila, a preference shareholder with 10,000 shares, and Betta and Katy wish to challenge the resolutions and seek your advice. Advise them on their rights and what practical corporate steps they may take to deal with the general meeting resolutions. You need not consider shareholder actions and other shareholder remedies at this stage.

Question?

• Look at the argument and be able to condense in 100 words. What makes the question significant? Is the law in action bad or the law on the page bad? Page on how to write for BA in your book. Why do we care about corporate power? It will be enough to pick out 2-3 main issues to think about. You must give succinct account of Australian law including statutory provisions. You must know the detail of the law to write theory in detail and be able to comment on theoretical opinions. To start the essay write a short succinct account of the law in the area. Organise the essay so it sets out the law first and then have a critique or take three big issues that the law in your sections raises and then think about those issues theoretically and critically. You must have theory, law thread and critical thread. The theory part is very important. Do not leave it out. You must read and think and reflect on theory. We want to know if the law is effective at doing what we want to do.

• Modern law review in library.

• Essay so set out argument and what you are going to say in your introduction.

• The most sophisticated essay is to write the theory and then critique the theory and use the theory as a bench mark then see the whole essay. Hard to integrate. Need to find all the issues.

• SO set out the essay by theories- essential issues and use the theory as a bench mark then critique it. You want to know what in essence the law is trying to achieve and how effective it is. Have strong argument in intro and set out what you are going to say.

• What are Leila (preference shareholder) and the directors Betta and Katy’s rights?

• Can they challenge the allotment of 10,000 preference shares after a resolution has been passed by the GM?

• Can the directors prevent being sued for the outstanding debts if the directors voted against the resolution but the shareholders did not vote against the resolution?

• What sort of Company is it?

  • Public incorporated company. Comes under CA and the ASX listing rules. It has a constitution. Not a private company- its harder to change constitution in a public company than it is in a private company.

• What is the shareholding?

  • 60,000 $1 ordinary shares.

  • 15,000 preference shares.

  • Winsome is majority shareholder. E.g. 40,000 shares, 5000 preference shares.

  • Leila owns 10,000 preference shares. Not a director.

• Who are the directors?

  • Winsome* (majority shareholder and a director)- Can he convene a GM after resolution is vetoed? What provision allowed Cassandra to veto in the CA- the power to change the...

Buy the full version of these notes or essay plans and more in our Business Associations I Notes.