A Fiduciary Relationship

There are no answers available to these questions, but a forum Question Giving an example, distinguish between the capacity of a company and the capacity of its agents. Your answer should highlight why the distinction is important.


In relation to a public company issuing debentures through a prospectus explain the actual or potential roles of the trustee for debenture holders, the prospectus, the debenture trust deed, the register of charges and a receiver.


“Partners are in a fiduciary relationship with each other”. Explain and illustrate this concept. Also explain when the fiduciary relationship may begin and when it ends.


“In Salomon v Salomon & Co. Ltd [1897] AC22, Mr Salomon was very lucky. Today, on the same facts, he would be personally liable for the debts of the company, and the security (debenture) given to him by the company would be invalid as a priority over the unsecured creditors”. Do you agree? Comments.


Explain the following:

(a) Special Resolution

(b) Statutory Demand


The Board of Directors of Lackcash ( a proprietary co) are considering the following options:

(a) To raise capital of $6 million by an issue of shares to its shareholders; or

(b) To utilise any method of obtaining the $6 million without contravening Ch 6D of the Corporations Act. Advise the Board of Lacklash Pty Ltd of the corporations law involved.


In Gambotto v WCP Ltd (1995) 182 CLR432. the High Court laid down certain tests which apply to assessing the validity of alterations to a company’s constitution in relation to minority shareholders interests. Briefly outline the facts of Gambotto and provide a brief explanation of those tests.


After news of a takeover offer being made for Boon Ltd, its Directors enter into discussions with Hand Ltd to purchase certain business activities of Hand Ltd. In consideration, Boon Ltd will issue shares to Hand Ltd. The purchase will increase the profits of Boon Ltd and enable large dividends to be paid to its shareholders. Millie, a shareholder in Boon Ltd, learns of the proposed purchase and is strongly opposed to the transaction. Advise Millie of any legal rights she may have to prevent the transaction


Giving examples from both the Partnership Act 1892 (NSW) and the Corporations Act 2001 (Cth), explain what is meant at law by apparent or ostensible authority.


Esanda Finance v Peat Marwick (1997) 188 CLR 241 and Daniels v Anderson (1995) 16 ACSR 607 are important decisions regarding auditor’s liability. Explain why.


In relation to a company meeting briefly explain the rights of a member to demand a poll, appoint a proxy, dismiss a director, and place an item on the agenda of a meeting.

Question Samuel was a promoter of a company called Edmanuals Pty Ltd. Six months before the company was registered Samuel signed a contract on behalf of Edmanuals Pty Ltd for $10,000.00 per month for 6 months for the hire of a 2005 CLS500 Mercedes Benz motor vehicle from Samuel’s Cars Pty Ltd. Samuel is the sole director and sole shareholder of Samuel’s Cars Pty Ltd. Edmanuals Pty Ltd does not want to honour the contract. Advise Edmanuals Pty Ltd.


Maree is an experienced accountant and audits the financial report of IOD Ltd. During the audit she suspects that a contravention of the Corporations Act 2001 (Cth) has occurred. What contractual duties does Maree owe IOD Ltd under the common law? What is Maree required to do if she suspects a contravention of the Corporations Act 2001(Cth)?


With reference to case law and the Corporations Act 2001(Cth) describe what is meant by the term ‘insolvency’ and identify the link between ‘voluntary administration’, ‘deeds of company arrangements’ and ‘liquidation’.


“The law recognizes a corporation as a distinct legal entity, having a separate existence and a corporate personality of its own, quite apart from the members who comprise it.” Discuss this statement with reference to the main legal consequences both at general law and under the Corporations Act 2001 (Cth).


Bob wants to assist a yet to be formed company to take advantage of lucrative contracts which need to be signed before the company is incorporated? Citing the relevant sections in the Corporations Act discuss whether or not Bob could be held liable if he signs a pre-registration contract.

View this related post: An Explosive Device.


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