公司法董事义务和诉讼

1、AdviceAnswer for question (1)(i) Harris must take into account following factors in order to take an action against James and Patrick:1. As directors, Harris, James and Patrick own several duties to the company. Firstly, a director owns a fiduciary duty to the company; he must behave for the best be

2、nefits of the company and should not seek any personal interests. If there is any personal interest, the director must disclose the interest to all other directors 2. For James and Patrick there were personal interests in the transaction between the accounting firm, as a partnership owned by James a

3、nd Patrick, and the company, since partnership is not a separate legal person and James and Patrick severely and jointly undertake and repay its obligations, liabilities and debts; thus James and Patrick must disclose the personal interests to Harris. As a director Harris is entitled to get known ab

4、out the financial conditions of the company and be kept update. The payment of largemanaging fee§' should be disclosed to Harris, call meeting to discuss and determine3the matter.2. As directors, Harris, James and Patrick should avoid any conflict of interests, that is, if there is conflict

5、 between the company's interest and directors personal interests, the director must avoid such transaction. Therefore James and Patrick should not avoid transaction between the company and the accounting firm.3. Since Harris had resigned from the position of director, he may only sue James and P

6、atrick from the status as a shareholder.(ii) He should bring the personal action under the general law due to the lack of reliefs in the Corporations Act. Although the Corporations Act has lots of provisions regarding liabilities even penalties on directors, it has no provisions dealing with the spe

7、cial situation in the case: Harris had resigned from the position of director, he is not director anymore, and he cannot perform his liabilities and duties as a director anymore, although he was reluctant. He can only claim against James and Patrick from the position of a shareholder.(iii) Harris ma

8、y seek following remedies:(1) Request the company to pay dividends; as a shareholderof the company, being paid dividends as returns of his investment is a basic right of a shareholder. for the company had developed very well for the last two years, there is no reasons that the company should refuse

9、to pay dividends. Harris may sue James and Patrick for getting paid dividends.(2) If the request of paying dividends is refused, he may ask that his shares being sold to other shareholders, and if refused, persons who are not a shareholder to the company (other shareholders consent should be obtaine

10、d, if there is shareholder that does not agree the sale then the shareholder must buy the share).(3) Harris may announce that he was reluctant to resign from the position of director and resign should be invalid. Harris is still a director of the company. Harris was1Erlanger v New Sombrero Phosphate

11、 Co (1878) 3 App Cas 12182 一S. 191, the Corporations Act 2001 3s.295(4), the Corporations Act 2001本人男,汉族,1987年11月出生于湖北.2021年武汉科技大学法学本科毕业.毕业后,先后在越南(15个月)、埃塞俄比亚(2021年6月至今)工作,热爱法律英语.在学习之余,随手写下了这些文章,供各位在学习、测试中参考,但请不要复制或抄袭.如有疑问或需要可联系本人,QQ: 1003703168. forced to resign from the position by the cause that

12、he was not objective anymore, but the real reason for Harris to behave like that was that he badly needed money.(4) Harris may claim that he is entitled to get known about the financial conditions of the company, which is allowed by the Corporations Act. Since James and Patrick refused his request h

13、e may apply the court to enforce his rights of inspection.(5) Harris may ask to check the legality of the transaction between the company and James and Patricks accounting firm, and if there is a personal interest or conflicts of interests, he may claim that the transaction should be void.Answer for

14、 question (2)(1) A small-holding (minor) shareholder may have influence on how a company is managed through following methods:a. Small-holding (minor) shareholder has a right to access the financial or other conditions of the company and comments on the conditions of the company; small-holding (mino

15、r) shareholder also has other shareholders rights such as calling (more than 5% of vote) 4and participating in general meetings, voting for a resolution and so on.b. Right of cumulative voting. Small-holding (minor) shareholder may utilize the right to vote against the dominated shareholder and vote

16、 for its intended resolution or director or other matters of the company.c. Small-holding (minor) shareholder may file claim against other shareholders or directors who has caused losses to the company, according to its right as a shareholder.(2) The main restrictions on the shareholders are as foll

17、owing:a. A shareholder shall not misuse or abuse its rights as a shareholder;b. A shareholder shall not interfere the matters falling in the scope of powers of the board of directors;c. A shareholder shall comply with the corporations law and the constitution of the company, observe the terms, condi

18、tions, procedures and other provisions regarding to shareholders;d. A shareholder who does not perform its obligation of investing will not be entitled to the rights of shareholder; actually penalties will be imposed on the shareholder. A shareholder is prohibited from getting back its investment af

19、ter registration.e. When the company offers mortgage for big shareholder or dominated shareholder, the guaranteed shareholder shall not participate in the relevant meeting of shareholders and shall not vote for relevant resolutions.The number of shares held is relevant at the following respects:a. T

20、he number of shares will be used to identify whether the shareholder is a small-holding (minor) shareholder;b. The number of shares will be used to identify what rights and the prevalence of the rights the shareholder is entitled to;c. The number of shares will be regarded as a standard to determine whether theS.