Introduction

Law

Corporation Act 

According to this particular act, shareholders of a company is not liable to them, they are just completing their duty, which is investing money by comparing the beneficial advantages. In case, if a shareholder is one of the directors of the company then the scenario will be different from this. Shareholders are interested in gaining revenue and calculating their share in the company, but a director has the responsibility and the self-motive to make the business successful and reach to a high position. Therefore, in this type of cases, the violation of section 1.3 and 1.4 is detected. The role in these points of the Act is only depicted of a director not of the one, who is director and shareholder at the same time.  If a company is registered in this act, they need to follow the rules and regulations of this Act in any situation. In case of Boyd v Ackley (1962), the applicant claimed that the accounted for professional negligence in work. In this case, the husband and wife, both are the owner of a company, as they have owned all the shares of that particular company. The difference accounts were friends with the husband and wife. While the judgement period the high court has found that, many sectors need to develop as the claim is on the professional negligence and extra paying to some of the employees. In this case, the shareholders rights were preserved due to the Corporation Act, 2001 and due to this, they were able to take legal action against the defendant.  The corporation Act 2001 allowed the plaintiffs to take legal action against the negligence of the defendant for which they need to suffer from monetary loss. This is also as per the corporation act, 2001 were in the directors of a company are liable if a shareholder suffers from financial loss due to the director. 

The importance of the Corporation act in this context has a special account. According to the topic point, if the Corporation act 2001, and its rules and regulations can be utilized fully, then the shareholders and the directors would be able to improve their situation and position in company.                 

Moreover, to improve the liability and trust to the company or to the entrepreneur, the shareholders need to be consistent in their behavioural ethics. As they are the shareholders of the company, does not mean they would not help the company while they will face problem in future. Most commonly, it is visible, the characteristic that the shareholders bare, is self-motive and self-revenue gaining is the main point of their business deal. That is the most important reason, the shareholders are not able to create or establish any kind of reliability towards the company. However, the plaintiffs (the company) has own the case, as the court decided that professional negligence is not a mere crime and the victim need to be punished. In this case, also, the Corporations Act 2001, Act has not followed, as the duty and responsibility was clearly described in the act. Therefore, if the accounts have maintained the instruction then, the point of cases and court would never come. 

In March 2000 the 2F, 1A has been introduced to the Australian consumers. According to this part, the availability of statutory derivative has been mentioned through this act. Moreover, it states that members or officers of a company can take action on behalf of the directors of the company for special reasons. Before the arrivals of this act, statutory depravity was never been so popular, if it has not come, then this will never been popular also. This part has been introduced into the Corporation Act to represents that the officers, employees and the directors have same interest on a business, therefore, there is no reason to avoid them and eliminate their roles and credit from organisational success. In order to remove the disincentive in using the Part 2F.1A, new provision of s242 (2) need to be introduced in the act.

 Application of the law     

The directors and enhancement of their liability for company debts

A company director can be liable to the company when it needed. While the company has followed by due paid, rather the directors can help the company to resolve the company as all of them are indulged with the same business. Moreover, as per this act, if there were numbers of directors in a company, then it would be better to overcome a loss or a low state of the business. In this case, if the fault is of one individual shareholder, then other directors of the company can compensate it. Moreover, in case of increasing the liability towards the company, directors can consistent with their investment and report records, unless it can lead them to civil penalty according to this law. Moreover, as example, if the directors are doing their duty accordingly, then they can become the trusty of the company assets.