Variation of class rights - leture 8 - Corporate Law PDF

Preview

Summary

leture 8...

Description

Variation of class rights: - the strict legal rights not changed , no variation of class rights of existing shareholders---state at the beginning - Deemed variation of class rights -YES. Under 246C(5)- insert facts into section {1.it required the number of shares to be different—yes, 10 votes per share. - 2: rights are not provided in company's constitution as the company only use RRs. 3: there not mention notice sent to ASIC, so assume not. Therefore there is ....} - So company required to hold various votes in accordance for 246B. This votes were not held. They put a resolution for company for approval of super voting shares. Not accordance with 246B. Because we need a vote in the company and vote of class affected. But this vote just have 60% vote of those attending not 75% so not the vote according to 246B. Apply 1322 to set aside resolution. - 246D only apply when do have a successful vote under 246B. So no breach of corporation act {only applies when must or must not} - Breach of contract? Constitution and RRs formes the contract between.---NOT - Pre-emption apply when same class of shares and is proprietary co. 254D offer the shares to existing shareholders first—NOT, not same of class - Unfairly prejudice to all existing Shs. Oppression - proper procedure need follow - Director breach duty---in good faith, best interests of co and proper purpose. Proper purpose s181 raising capital, if just want capital then just issue new capital to themselves or existing Shs without additional votes. Here10 votes per share 208 indication of improper purpose- improper dilution. (If shares partly paid, also improper purpose) - S182 (1) no detriment to company but power gain for themselves - S461(k) grounds for winding up, - Members personal rights against improper dilution 246C - (1) divide to 2 class of rights. 1 class same before,1 better or worse than before .both class vote - (2) certain people rights varied . deemed vary both rights, both vote under 246B - (5)issue new class of share, only apply when company has one class of shares to start with. Rights can change constitution or lodge notice to ASIC - (4) issue - (6). Already has more than 2 class, because preference is priority of class than the other....