Business Law STUV Company

Question: Discuss about the Business Law for STUV Company. Answer: Part 1: Constitution of STUV Company Pvt. Ltd Meanings and Interpretations: In the given constitution of STUV Company, the following meaning and interpretation shall become applicable unless stated otherwise: Act shall mean the Corporation Act of 2001 ASIC shall mean the Australian Securities and Investment Commission Company shall means the STUV Company having CAN Number with 123456789 Constitution shall mean the constitution of the company Interpretation: The words that are used in this constitution, have been underlined and highlighted only for the purpose of expediency, and does not change the meaning of the words that are used as part of the constitution. Replaceable Rules: The replaceable rules of this company shall be applicable for all the rules excepting for the given list of preference shares. Issue of shares: The Directors of the company have the authority of issuing shares in the company. However, the directors may also issue shares or options over shares, as they may consider it proper. As per the Act, the shares or options can be issues having appropriate deferred or special rights or restrictions either in connection to dividends or in such other distributions such as powers relating to voting, payment of calls or any such power as the Director may think fit. Different Classes of shares: Preference Shares: The members who are entitled to hold the preference shares shall have to right to receive notice and attend no meetings unless specified under any other clause of the constitution. The right to payment of exchangeable share and any other right specified under any other clause. The members may hold a H, J, I, K, L, M classes of shares. Preference and Redeemable Shares: The preference and the redeemable shares is issued by the Company, and this includes preference shares and redeemable shares. The preference and redeemable class of shares are liable to be redeemed at the option of the company. The preference class of shares have a preferential dividend right giving the members the right to payment out of the profits of the company. The members having preference shares have the right that is associated with the winding up of the company. The redeemable class of shares gives the power to the company to redeem the share at any time in respect to the total number of shares available. The members of the company who holds the redeemable share has the right to redemption from the company. Part 2: Section 198A: According to section 198 of the Corporations Act, the directors of the company have the authority to manage the working and business within an organization and utilize the powers that are endowed to them by the Company. However, the director of the company may only make use of those powers that are authorized to them by the Act. Additionally, the directors of the company may also make use of the powers that are endowed to them as per the constitution of the company (Gilligan and Bird 2015). Thus, it may be said that the directors of the company have the power to act within the scope of powers that is given to them as part of the constitution as well as the Act. The reason why this section was included in the Act was to make the directors accountable for their actions. This section was to make the directors answerable for their actions and at the same time also protecting the interests of the minority and the majority shareholders. However, the constitution of the company may be amend ed to make changes in the powers of the directors. Ideally, directors of the company are given wide powers and they often tend to misuse the powers authorized to them. To solve the issue pertaining to misuse of powers by the directors, the section relating to powers of the directors was established (Sartori 2016). Section 191: Section 191 of the Corporations Act, 2001 deals with the duties of the directors, to notify the other directors of the company in case of any matter that is of personal interest relating to the affairs of the company. This is the fiduciary duty of the director and the director has the liability of disclosing this material fact to the other directors of the company. However, the same section in question also lays the situations wherein the director may not make the disclosure. Firstly, a director may not make disclosure if the same interest in issue arises out of the common interest of the company or relates to the remuneration of the director (Sartori 2016). Additionally, the director may not make the disclosure if the interest in question is related to a proposed contract. Thus, in the above-mentioned instances the director is not liable to make disclosure. The reason why this section was included in the Act was to make the directors accountable for the actions in relation to the in terests of the company. Thus, section 191 of the Act was included to make the directors accountable for their fiduciary actions (Gilligan and Bird 2015). Section 250R (2) (3): Section 250R of the Corporation Act, 2001 deals with the business of the annual general meeting (AGM), as per subsection 1 of section 250R of the Act, the main business of the AGM includes consideration of the annual report and election of the directors of the company. Additionally, it also authorizes the members of the meeting to appoint the auditor and at the same time fixes the remuneration of the auditor. As per sub section 2 of section 250R of the Act, a business of the AGM of a listed company has the authority to make a remuneration report and the report should be put to vote. However, the role regarding the remuneration is only advisory and shall not be considered as final and binding. Thus, the reason why this section was included in the Act was to limit the powers of the Board of members and at the same time also authorize the Board to settle the grievance of the Board members (Peng 2016). References: Gilligan, G. and Bird, H., 2015. Financial Services Misconduct and the Corporations Act 2001.CIFR Paper, (073). Griffin, R.W. and Pustay, M.W., 2012.International business. Pearson Higher Ed. Peng, M.W., 2016.Global business. Cengage learning. Sartori, J., 2016. Termination payments under the Corporations Act 2001 (Cth)-Some issues.COMPANY AND SECURITIES LAW JOURNAL,34(3), pp.221-2