Running head: CORPORATION ACT 2011 1
CORPORATION ACT 2011 5
Corporation Act 2011
Corporation Act 2011
(1) Section 198A
This section deals with the powers of the director of the any firm and the negotiable tool that can be used by a director. This part describes what the role of the director is to any organization and his or her limitation in the organization. In any case, each firm whether a proprietor or a corporation must have a director who assumes the responsibility of managing the firm. This has been included in the act due to the emergence of a myriad of many firms under whom no face would be reached (, 2011). Such organization would be registered by people who do not have it easier for them to commit a fraud and go unpunished. The insistent on having a direct at the firm has come to cure poor management in the firm where the proprietors of several firms would not take responsibility for the operational compliance of their firm to the various legislations. In addition, this has been consolidated into the Corporation Act 2001 as a way of consolidating the various laws governing the operations of the firms for an easier and quicker emphasis on the roles of the firm directors (, 2016).
(2) Section 191
This section deals with conflict of interest in the operations of the firms. Director may have personal material interest in some of the activities of the firm that may affect the operations of the firm and case an ethics violation, which may hurt the firm in many ways (Commonwealth Consolidated Acts, 2016). The section places a responsibility on the director to make it discloser to other directors of any personal interests that may cause conflicts of interest. The section goes ahead to give some of the condition under which the director is not required to make a disclosure of the conflict of interest such as areas that the conflict may arise because of director remuneration or in any deal with the firm is not obligated to have responsibility. This section comes in handy to deal with the various issues of conflict of interest in the previous occasion that would lead firms to fail. Directors would guide business into areas where they have their own personal interest and have conflict of interest when dealing with business either related to them or they have special interests in. The conflict of interest is also a prime area for the commission of fraud in the to wrong information beign delivered to the stakeholders.
(3) Section 250R (2) & (3)
The shareholder and the director have misused the annual general meeting for a long time in the past. Such meeting would be used to lynch the characters of the director or having the director dictating the affairs to be discussed in these meetings. At time, some of the AG was a mere show where no tangible information about the firm would be discuses. This would lead to a situation directors of the firm would adjust their remuneration as they wished and leave the shareholders with no value to share out as dividends (CCH Australia Limited, 2011). The firms were left to make an own rules regarding the AGM, the agenda and the activities to be included in such meetings. However, the corporation act streamlined how the Annual general meeting is to be conducted, the item to be discussed, and who can vote (Commonwealth Consolidated Acts, 2016). This was a thorny area where some people would be allowed to vote in the meeting as long as they side with the item being voted upon which is the remuneration of the directors. This mean no director can alter their remuneration at any time they deem fit for