BLAW20001 Lecture Notes - Lecture 10: Trading While Insolvent, Zeppo Marx, Cash Flow Statement
5 Jun 2018
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Lecture 10
Disclosure
The aims of corporate regulation include investor protection, efficiency in capital raising, and
systemic stability
Mandatory disclosure has a role to play in achieving each of these aims
'Sunlight Is the best disinfectant' - U.S. Supreme Court Justice Louis Brandeis
Report keeping
Financial records:
-> S286: all companies must keep sufficient records to enable the preparation of financial
statements if required
Minute books
-> Part 2G.3 - minutes of meetings and resolutions of directors and members
Shows resolutions of members
-> Eg. S254A(2) resolution to issue preference shares
-> Eerthig does’t ed up i the ostitutio
Shows resolutions of boards
-> ASIC v Hellicar
Scandal
James Hardy Industry
Abestas story -> investment in housing
Abestas caused lung disease
James Hardy sued
Creation of fund
Board recorded in minutes of the fund
Liability fully funded
Future Abestas releases fully covered -
Did’t resole to release press release
Inaccurate
If it is in minute books that you will release something to mislead market, you are liable as directors
If its in the minute books, youre stuck with the resolution even if that is not what happened
Record keeping
Registers eg
-> register of members: s169
Searching the registers: s173
Must be related to shareholding
-> Eg. To requisition a meeting s249D (shareholders with more than 5% vote can ask board to
convene a meeting)
Limited use of information: s177
-> can't be used to make offer to buy shares
S249E 50% of those requisitioning a meeting want to call it themselves (50% of 5% or more)
ASIC filings
Annual review - chapter 2N
-> review date and extract of particulars (may include request for particulars). Company must
correct, and respond to request
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
The aims of corporate regulation include investor protection, efficiency in capital raising, and systemic stability. Mandatory disclosure has a role to play in achieving each of these aims. "sunlight is the best disinfectant" - u. s. supreme court justice louis brandeis. > s286: all companies must keep sufficient records to enable the preparation of financial statements if required. > part 2g. 3 - minutes of meetings and resolutions of directors and members. > e(cid:448)er(cid:455)thi(cid:374)g does(cid:374)"t e(cid:374)d up i(cid:374) the (cid:272)o(cid:374)stitutio(cid:374) If it is in minute books that you will release something to mislead market, you are liable as directors. If its in the minute books, youre stuck with the resolution even if that is not what happened. To requisition a meeting s249d (shareholders with more than 5% vote can ask board to convene a meeting) > can"t be used to make offer to buy shares. S249e 50% of those requisitioning a meeting want to call it themselves (50% of 5% or more)
