In order to determine what action can be taken against Tracey and Tina, we firstly need to analyse each of their situations separately and make a sound judgement based on relevant laws and similar case law.
In the case of Tracey we need to look at the doctrine of corporate opportunity; which more specifically would involve an evaluation of the director’s duties under the Companies Act (CA) 2006, the reason being that there is speculation of Tracey taking advantage of her position as a director, this will be looked in to. Most importantly, it is crucial to clarify exactly what is expected of Tracey before making a judgement as to whether she has breached her duty as a director or not.
Under section 175 of the Companies Act is where Tracey’s duty breach would be relevant, as this section deals with the ‘duty to avoid conflicts of interest’ and applies to the ‘exploitation of any information or opportunity’. In the case of Tracey acting as director of Homeware’s, it is clear that due to the fact she used information from the previous rejection of the “gardens” business and took it elsewhere, and also because of the fact she used Homeware’s previous suppliers for her own personal gain in her new business.
Conflicts interest can be resolved by proper means, such as declaring these interests to the board of directors in hope of an approval, in the of case conflicting interests being approved by directors, all interests would therefore be acceptable. However, Tracey did not declare her conflict of interest and instead used information and opportunities within the company for her own personal gain, this means she has breached her duties as a director, and legal actions can be taken.
Even though Tracey had already left the company when t...
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...s: Even though is not technically a company, an LLP is still at jeopardy of public scrutiny in respect to their finances.
Private Limited Company: Under the CA 2006 law, any registered company which is not a public company is a private company. Shareholding limited to participants in the business.
Public Limited Company: A public company is defined, under the CA 2006, by the fact it is limited by shares, has ‘plc’ after the company name, has limited liability, is registered at Companies House, and states that it is a public company in its certificate of incorporation.
Advantages: if company is listed the shares can be traded on the Stock Exchange, this means capital can be raised easily. Members of a public company can share in its profits without taking any part in its management.
Disadvantages: Needs £50,000 of authorised share capital to register, this is a lot.
Mary Archer is the wife of Jeffery Archer, and also she is a director for Anglia TV Company. The insider trading rule that Mary may have violated is that if she did tell her husband about the insider information from board meetings, she should beware that director’s close relatives are not allowed to deal ahead of takeover bids. Also questions arise in the article, that as it is accepted that Mary did not tell her husband about the bid, how much information has found out without her knowledge. If she did share information with her husband than she violate the rule of insider trading which states that:”Insider shouldn’t communicate private information to others who are likely to use it”.
It was found in the primary court that Helen was not properly appointed as a director of LWC (Beck v L W Furniture Consolidated (Aust) Pty Limited (2011) NSWSC 235). This was not disputed in the Court of Appeal or the High Court (Weinstock, 48). In reaching this decision, Barrett J considered multiple factors, including Amiram’s status an...
A company is separate from its employees, shareholders or members in that the connection between them is usually a mere contract of employment which may be terminated leaving both parties to go their own ways. The same generally applies however to those businesses which are not companies. There is also more importantly usually a separation between the company and its owners.
Distinct legal entity separates from individuals who compose it, thus insulating the shareholder from personal liabilities. Generally, shareholders are not personally liable for corporate
Limited Liability means that the investors can only loose money they have invested and no more. This is what encourages an individual to invest in the company. When shares in a plc are first offered for sale to the public, the company is given a “listing” on the London stock exchange. This means it has sold all or part of its business to outside investors. This generates additional funds for the business and can be an important form of fundraising. Tesco PLC is a wholesaler and retailer and is therefore part of the tertiary sector as it provides a service. Tesco is a supermarket that would receive the wholesale and retail trade service from the tertiary sector. This means that all wholesalers (Tesco) and retailers are entitled to receive this type of trade service from the tertiary sector. Tesco is also involved in the tertiary sector through receiving private services from the sector. Tesco hence purchases in the private service and they provide to Tesco as they are considered as a wholesaler or
A conflict of interest may be described also as a conflict of duties or a conflict between interests or as a conflict between interest and duty. To act when they have a conflict of interest involves breaching their fiduciary duty to their client or former client. This is the basis of the conflict of interest problem and is stressed in many of the cases dealing with conflict of interest. There are four element of the fiduciary duty, duty of confidentiality, duty not to put their own or other people’s interests before their own client, duty not to misuse client’s money, and competent standard of
These same standards must apply to all levels of the company for the company to thrive. Vicki Vice-President failed in all three areas, ethical reasoning, the application of morals and ethics to a situation, duty-based ethics, the idea that every person has certain duties to others, and outcome-based ethics, which focuses on the action itself and the impact the decision has to maximize benefits and minimize harm (Cross, Miller, 2015). First she was appointed into a key position within Ace, which came with certain obligations that needed upheld. The Board, which appointed her, specifically stated that all negotiations with Widget were to cease unless the Board approved such a venture. Second, Paul President invited key officials from Widget for a full day visit at Ace, which allowed them access to loan files and Ace procedures. Third, in an effort to avoid a dilemma, Vicki Vice President eluded Paul President’s invitation to be present during the day of the visit with senior officials at Widget by stating that her conscious would not allow her to participate, and therefore would work from home. The decision of the board to cease and desist their negotiations with Widget could come from corporate social responsibility in which Ace considered its decision on the impact it would have had on its customers, creditors, and the community in which it operates. Clearly speculation, but at least it has
Public Companies are big. So may face management problems such as slow decision making and industrial relation problems
Business is a game of gambling. In poker, a person can be honest and keep his or her hands above the table, but there is always a person that has hands under the table. Businesses find many people with hands under the table when the issue of corporate self- dealing appears. Corporate self-dealing is when a trustee or other fiduciary of a business takes advantage of his or her position in a transaction for self-benefit instead of the company’s overall benefit. Self-dealing can include corporate assets or opportunities. John H. Farrar and Susan Watson notes, “If a director deals with a company that he or she is a director, there is a risk of conflict of interest as well as a breach of the duty to act bona fid for the good of the company or promote success” (495). Without some form of limitations businesses have no way to control the act of self-dealing within the company. Although numerous solutions have been suggested, the solution implemented needs to be able to form to each individual business without limiting the transactions of the business. Nonintervention, Prohibition, and Majority of the Minority Vote have all been considered, however, these solutions are not efficient enough for the business world or able to best limit the role of self-dealing. Nonintervention only ignores the problem in hopes it can resolve itself, while Prohibition provides only a strict method that does not ensure that people will not perform the actions. The Majority of the Minority vote resembles a voting system, but is not time efficient. While it only guarantees that the transaction is fair, the best solution to limit corporate self-dealing is to incorporate the Fairness test into business transactions.
According to Corporation Act 2001 s124(1), it illustrates that ‘’A company has the legal capacity and powers of an individual both in and outside the jurisdiction” . As it were, company as a legal individual must be freely with all its capital contribution shall embrace liability for its legal actions and obligations of the company’s shareholders is limited to its investment to the company. This ‘separate legal entity’ principle was established in the case of Salomon v Salomon & Co Ltd [1987] as company was held to have conducted the business as a legal person and separate from its members. It demonstrated that the debt of company is belonged to the company but not to the shareholders. Shareholders have only right to participate in managing but not in sharing the company property. Besides ,the Macaura v Northern Assurance Co Ltd [1925] demonstrates that the distinction between the shareholders and company assets. It means that even Mr Macaura owned almost all the shares in the company, he had no insurable interest in the company’s asset. The other recent case is the Lee v Lee’s Air Farming Ltd [1961] which illustrates that the distinct legal entities between employee ad director allows Mr.Lee function in dual capacities. It resulted that the corporation can contract with the controlling member of the corporation.
The ‘unyielding rock’ of corporation law, as established and relied upon in Salomon v A Salomon & Co Ltd, is the concept of the separate juristic personality of a corporation. Out of this century-old principle, the legal structure of modern business was born. The foundation of corporation law thus rests on the concept that a company has a separate legal personality which is recognised in the Companies Act 71 of 2008 (“the Act’).
This case deals with Company Law and more specifically with share capital in relation to allotment of shares and transfer of shares. With reference to the Companies Act 2006 and appropriate case law it is hoped that a reasoned conclusion is reached for the issues put forward by Verity.
Public companies are any company that has stock available to the public to buy. A company that wishes to set up a new business or expand its existing business can raise the capital it requires either by borrowing money or by issuing shares to investors. The investors become shareholders in the company, meaning they are part owners of the company and share in its profits and growth. These stocks represent how well the company is doing. When the accounting books are tampered with to show the company is thriving when debt is actually accumulating is when investors lose all their shares because they fall all of a sudden and lose all worth; without any warning. Companies wishing to have their shares traded must first be listed. To become listed, a company must be large enough for there to be a market in its shares and it must agree to abide by the listing rules which, with other things, require it to keep the market informed of its activities and to regularly report profits and other financial information (Flint). Auditing firms have been overlooking figures and hiding debt from the public for their high paying companies. This is where our corporations have gone astray and started to cheat their investors by deception because of conflicts of interest of...
account. My decision was to report the incident so that the correct information would be
In company law, registered companies are complicated with the concepts of separate legal personality as the courts do not have a definite rule on when to lift the corporate veil. The concept of ‘Separate legal personality’ is created under the Companies Act 1862 and the significance of this concept is being recognized in the Companies Act 2006 nowadays. In order to avoid personal liability, it assures that individuals are sanctioned to incorporate companies to separate their business and personal affairs. The ‘separate legal personality’ principle was further reaffirmed in the courts through the decision of Salomon v Salomon & Co Ltd. , and it sets the rock in which our company law rests which stated that the legal entity distinct from its