Corporate Liability Risk Respect Of Climate -Myassignmenthelp.Com

Question: Discuss About The Corporate Liability Risk Respect Of Climate? Answer: Introducation The shareholders of the FCWNZL discovered around the same time that there was another unit (Parnell), which required little work for the purpose of the business and would also reduce the overall cost of the company. The shareholders have a legal right to make a special resolution for approving a major transaction of the company, vide section- 106(1) of the Companies Act, 1993 or the shareholders can, vide section-177 of the Act, can pass an ordinary resolution in a general meeting and ratify any breach of officers duty and ratification makes an unauthorized act valid (Evans, 2016). The board, by delegating the power to Diane, signed the agreements for the Epsom unit, without informing the shareholders and hence, there was a breach of duty as it was a major transaction related to the company. Therefore, the shareholders can revoke the both the agreements only after making a special resolution under section- 106(1) or an ordinary resolution for ratification under section- 177 of the Ac t (Hannigan, 2015). In Re Duomatic Ltd[1969] 2 Ch 365, it was held that shareholders, having a right to vote at a general meeting of the company, can assent to a matter, which a general meeting of the company could carry into effect, and that assent is as binding as a formal resolution. According to section- 36 of the Company Act, 1993, the share holders of a company have certain rights (Haldane, 2015). Every shareholder of the company has the right to cast 1 vote at meetings of the company on any resolution, which may include: Appointment or removal of directors or auditors. Adoption of a constitution. Can change the companys constitution, if any. Giving Approval to a major transaction. Approve a company amalgamation under section- 221 of the Companies Act, 1993. Can put the company into liquidation. Every shareholder has the right to equal share in dividends. Right to equal share in distribution of surplus assets. Therefore, in the given scenario, if the shareholders were concerned about the actions of the directors then in such case, they could take up actions including putting the company into liquidation, remove a director, adopt a constitution or can reject the transaction as it was a major transaction in relation to the company. The FCWNZL decided buy a commercial unit in Epsom for using it as their own premises. Therefore, for the purpose, the directors of the company had asked the Chief Financial Officer, Diane Thorton, to prepare a proposal for the purchase of the commercial unit. Diane delegated this work to the accounts clerk, Bill Everard, who gave the projected cost. In the board meeting the proposal was presented. The directors were busy and they were negligent to go through the proposal. Neither, they discussed the transaction between them nor the shareholders and delegated Diane the authority to sign the agreement for the transaction. In this scenario, the nature of the decision can be said to be as negligent as no importance was given by the directors to the proposal in one hand and delegated the right to sign to Diane, whereas on the other hand, Diane delegated the work of making the proposal to the clerk (Adamu, 2015). By virtue of Section- 130 of the Companies Act, 1993, neither the directors n or Diane, being a senior executive can delegate such powers in case of financial statement. In addition, it was a breach of duty of care under the common law and the duties under sections- 130, 131 and 134 of the Companies Act, 1993. In the given case, the procedure of the decision taken in by the FCWNZL was a wrong one. Firstly, in this case, the directors did not fulfill their duty of taking the decision with care, skill and due diligence under section-131 of the Companies Act, 1993 (Chua, J. F. (2016). Where they should have had taken the care in taking the decision and delegating the duty of making the proposal to Diana, the Chief Financial Officer, who delegated the job to the accounts clerk, which she was not suppose to do according to section- 130 of the Act, as it was a financial work. Moreover, the shareholders were not informed about the agreement, where it is a duty of the directors of the company to disclose all information to the shareholders and to proceed with their approval under sections- 134 of the Act (Calitz Freebody, 2016). It is also the right of the shareholder under section-36 of the Companies Act, to be informed about all matters of the company and to cast their vote in it (Delibert, 201 6). Therefore, according to the provisions of the Companies Act, 1993, the correct procedure would have been taking the decision after disclosing the matter to the shareholders and based on their approval on such decision through votes. References: Adamu, H. (2015). An Examination of the Director's Duty of Care and Skill under Company Laws of Nigeria and the United Kingdom. Calitz, J., Freebody, G. (2016). Is post-commencement finance proving to be the thorn in the side of business rescue proceedings under the 2008 Companies Act?.De Jure,49(2), 265-287. Chua, J. F. (2016). Corporate liability and risk in respect of climate change.NZJ Envtl. L.,20, 167. Delibert, A., Delibert, A., Schneider, L., Schneider, L., Clement, M., Clement, M., ... Shannon, S. (2016). SECs division of investment management offers new guidance on distribution in guise payments.Journal of Investment Compliance,17(2), 27-34. Evans, M. (2016). UNANIMOUS ASSENT TO THE DUOMATIC PRINCIPLE: ACCEPTANCE IN NEW ZEALAND. Haldane, A. (2015, May). Who owns a company?. InSpeech, University of Edinburgh Corporate Finance Conference, May 22nd. Hannigan, B. (2015).Company law. Oxford University Press, USA.