Business Law Business Law Issue The duties

Business Law Business Law Issue The duties

Business Law


Business Law














Issue

The duties may have breached by the Advise Gonzo as the director of UR Saved and the penalties that may have imposed.

Rules

This problem had the basic rules that are under section 181 of the Corporation Act that the director or the officer should work in the best interest of the company or in the good faith. InWHITLAM v ASIC[2002] NSWSC 591 case, the Court had found Mr Whitlam in the contravention of the section 181 as he is the Chairman of the company and he has not done his duties in god faith.Section 182 states that the director should not use his position improperly for their personal benefit or the benefit of someone else determinant to the company. Section 183 states that the person cannot take an advantage of the information they gain in the course of their director duties to gain any advantage for himself or for somebody else.. InASIC v Adler(2002) 41 ACSR 72; [2002] NSWC 171 case, the court had found the Adler in the breach of the section 180, 181,182 & 183 as he had misuse the information he has gained in the course of his director duties for the person gain.Section 184 states that if any of the duties breached as not worked in good faith or improper use of information and the use of position for the personal gain or for the gain of the others then the criminal liability will arise. In case, R v Rivkin [2002] NSWSC 1182: 198 ALR 200; 45 ACSR 366, Mr Rivkin had misuse the information, his position, not acted in good faith and the court found to be in the guilty under section 184 of the Corporations Act

Application

The rules that are breached in this case, as firstly Mr gonzo did not worked in good faith under section 181 of the Corporation Act. He has the information that Travel Services R Us Pty Ltd that they are searching for the investors in the company and it was known by him that the company was in profit. He mislead his company by saying that the venture is very risky and speculative venture and not suitable for U R Savedbut he only invested $100,000 in the Travel Services R Us Pty Ltd and earned the profit of $ 1.5 million within the six months of the investment Similarly, it was happened in the case of (ASIC v Adler). It had been proved that he had breached the section 183 by the use of information he had gained due to his position as a director for the personal benefit. He also breached the section 182 by improper use of his position for the personal benefit. Thus, it can be said that Mr gonzo had done the criminal offence under section 184 of the Corporations Act, as he had not worked in good faith, use the information and the improper use of his position as similar in the case (R v Rivkin). These breaches of the duties had mentioned in the other three cases where these duties had been breached. It can be said that Mr Gonzo is liable for the penalties for the breach of the duties of the Corporations Act.

Conclusion

It can be analysed from the case that the director duties of the Corporations Act had been breached by the Mr Gonzo and he is liable for being penalized. Mr Gonzo is liable for the criminal penalties for the breach of the sections 181,182,183 & 184 of the Corporations Act.