Company Law (Essay Sample)

Company Law
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Question 1
2Gary sold his business on a willing buyer-willing seller basis. This is the first of his responsibilities. He has a responsibility to honor the sales agreement he made with Lassie limited. However, seeing as he is a stakeholder in the company (with almost a quarter of the company shares) he gains significantly higher ground to contest against his demotion. Gary formed his company with his friends—meaning that it was eventually expected to profit all of them according to percentage invested, Gary Growl and his partners are therefore bound by the Partnership Act 1895(WA). Such partnerships could be either limited or unlimited. In unlimited partnerships, liability is shared among the partners in the firm. However, for Gary, his agreement seems to be limited since his partners are directing all the blame toward him—the incumbent general manager
Willy wolf specifically signed for the cats’ order that violates Lassie ltd clause of restricting activities to dogs only. This meant that Willy Wolf—unless with exclusive laws to permit it, had no right to sign for the cats deal. Gary has a responsibility to establish the command used in the signing before taking responsibility at all. Willy Wolf being a director at the company is an unlimited member in the partnership. Since there are laws that allow Gary to become the General Manager of the company, the laws prevent the partnership from passing all the blame to him, however, by selling his initial business, he has no say on retracting from the deal since the business is a property of Lassie Limited. This should mean that the company’s liabilities are absorbed by the company. Had Gary not sold his business he would be at a better position to contest company violation of constitution. But, since Lassie is a limited company Gary has the grounds to plead company constitution violation.
Question 2
The Australian law puts it that a company is responsible for its debts. Company here comprises of Lassie ltd and its directors. However, the law also states that if directors in a company were to allow a company to trade the court has the power to lift the corporate veil and make the directors personally responsible. In order to get complete compensation, Doggy Pty ltd needs to establish that Lassie ltd was aware of the decline and made the liquidation in order to avoid payment. Further, to be able to recover any amount from Lassie ltd Doggy Pty needs to piece the corporate veil and make the dire...