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Is This Deceptive and Misleading Conduct Again, page-50

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flyboy77

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21/08/18

23:24

Post #: 35078498
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https://www.dbalawyers.com.au/dba-news/march-2013/

Does non-compliance with a constitution render the exercise of the power invalid?

Company constitutions are read subject to the general law and legislation. According to Halsbury’s Laws of Australia:

A [constitutional] provision will be invalid if it is contrary to public policy, if it purports to limit the statutory rights or liabilities of its members [shareholders], or if it is expressly or impliedly rendered void by legislation.

Further, s 125 of the Corporations Act (2001) (Cth) broadly provides that the exercise of a power by a company contrary to the constitution or the company’s stated objects is not invalid merely for that reason.

Despite this, it is not clear whether this provision also applies to internal decision-making of the company. Also, a claim might still be raised against individual directors for breach of fiduciary duties such as the duty to act in good faith in the best interests of the company.

Considering the above, if a power or decision is carried out that, while it does not contravene the Corporations Act 2001 (Cth), does not comply with the constitution, this could be attacked as being invalid.

Given that legal challenges are often founded on technicalities and the end goal is certainty and risk minimisation, it is worthwhile striving to ensure actions comply with a company’s constitution. Naturally, if any challenge were to occur, significant costs and time delays could arise.

Further, ensuring that actions are done in compliance with the constitution adds to the evidence that the relevant party was seeking to comply with the law.

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Is This Deceptive and Misleading Conduct Again, page-50

Coda Minerals (ASX:COD) enters rights issue to further exploration in South Australia

Neurotech knocked back by FDA as agency declares target condition not rare enough for special status

Cokal upgrades infrastructure for BBM ramp-up in Indonesia

BCI reaches close of funding facility for salt-first part of Mardie project

Buxton projects new graphite province discovery at WA Narryer play

Solstice Minerals to ramp up drilling campaign at Yarri Gold Project

Week 40 Wrap: China's nonsensical stimmy hype wanes (shocking!); HotCopper's picks; oil & inflation

Actinogen Medical ramps up Alzheimer’s treatment trials, targeting fast-track global approvals

Recce eyes Indonesia for novel anti-infective as Indo-Aus ties grow stronger

White Cliff jumps 24% on 'bonanza grade' copper rock chips at Rae project, Canada

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Is This Deceptive and Misleading Conduct Again, page-50

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Neurotech knocked back by FDA as agency declares target condition not rare enough for special status

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