Tutorial 4Corporate governance 1 – members/members' remedies1. SAFPL has two classes of shares on issue – ordinary shares and A Classshares. Under the terms of the SAFPL constitution, each A Class sharecurrently carries an entitlement to vote on any resolution to amend thecompany’s constitution. The directors of SAFPL would like to have theconstitution amended so that A Class cannot vote on
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Tutorial 4
Corporate governance 1 – members/members' remedies
1. SAFPL has two classes of shares on issue – ordinary shares and A Class
shares. Under the terms of the SAFPL constitution, each A Class share
currently carries an entitlement to vote on any resolution to amend the
company’s constitution. The directors of SAFPL would like to have the
constitution amended so that A Class cannot vote on constitutional
amendments. Is this possible? If so, what would be required to make that
amendment?
2. China Investments Pty Ltd, a wholly owned subsidiary of AMGL, has not
adopted a constitution. It currently has two directors: Charlie Chester
(who is also a director of AMGL) and Tom Tucker, an employee of AMGL.
Tom has resigned from AMGL and AMGL would like to replace him on the
China Investments board with Wendy Wu. What steps are required to do
this?
Issue: AMGL would like to replace Tom Tucker with Wendy Wu in China Investment Pty Ltd
Rule of Law: SECT201G Company may appoint a person as a director by resolution passed in general
meeting. In the short-term, SECT201H states the directors of a company may appoint a person as a
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director. The company must confirm the appointment by resolution within 2 months after the
appointment is made.
Application: The steps required for AMGL to appoint Wendy Wu in China Investment Pty Ltd is by
resolution in general meeting, or in the short run, the director of a company, Charlie Chester my
appoint Wendy Wu as a director. The company must confirm the appointment by resolution within 2
month after the appointment is made, otherwise the appointment is not confirmed and the person
ceases to be a director of the company at the end of those 2 months. These are the rules for a
proprietary company.
Conclusion: AMGL may ask Charlie Chester to appoint Wendy Wu as a director and confirm this
appointment by resolution within 2 months of appointment.
3. Canny Ltd would like to appoint Larelle Lawn, a solicitor, as its proxy to
vote on the various resolutions to be put to the AGM of AMGL. How does
Canny go about appointing a proxy? Could it appoint Larelle as its
corporate representative instead?
4. Jason and Jennifer Jones would like more of a say in the affairs of SAFPL.
They would like to force a meeting of SAFPL to vote on a resolution to
amend the constitution of SAFPL to give A Class shareholders the right to
vote on the appointment of directors. They have asked David to convene
a members’ meeting to consider the resolution but he has refused,
saying that it would be futile because he, Nick and Patricia would never
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