Issue: Whether it was right for their friend to recommend the company’s name as Tatts r Us Ltd
Rules: The two parties agreed to make their company affairs private and confidential.
The also made their company a proprietary company making them the only directors and
members of the company under CA
Application: Having Brad suggest how Billy and Angeline should name their company shows a
breach of agreement and exposure of the company. This shows that one of the two directors
broke the agreement.
Naming the company Tatts r Us Ltd meant that the company had to be a limited company which
meant that each shareholder would be limited to their contribution to the company’s total shares.
This was not what the two partners had agreed.
Conclusion: I don’t agree with Brad’s advice since it was in breach of the initial agreements the
two parties had made.
Issue: Whether the company has to reinstate Antonio
Rules: According to S140 (1), the constitution rules that applies to the company has an effect as a
contract between the company, members and the company secretary. Meaning that the rules can
be enforced by the members and not just the company
Antonio Gonzales has constitutionally been appointed as the master tattooist for life.
Application: Antonio has a constitutional right to enforce his employment since he had
constitutionally been made the company’s master tattoo for life.
Conclusion: The company has to reinstate Antonio since the constitution serves as a contract
between the company and its members
Question Three Answer
Issue: Whether jack had authority to a sign a contract whose transaction is over $100,000, if
Beanstalk Ltd had legal constitutional capacity to buy produce outside Queenland and if
Beanstalk Ltd constitution being available in the public record meant that Giant Ltd should have
read its content.
Rules: The company’s constitution has laws that prohibit agricultural products grown elsewhere
apart from Queensland.
The board of directors have a company policy which require board approval for transactions
There is no rule that states that interested companies should read the constitution of the
contracting company. However, S126 of CA has approved that another company can enter into a
contract through an agent
Application: Jack broke constitutional law by transacting an amount above $100,000 without
seeking approval from the board. He also broke another rule limiting the company from agreeing
to sell beans from Giant Ltd.
Giant Ltd is not obligated by any laws to read the constitution of the contracting company
however Jack being a director makes him an agent of the company thus making the agreement
between Giant Ltd and Beanstalk Ltd legal.
Conclusion: The board of director was right for canceling the agreement since they had not
followed the right procedures in creating the agreement. Giant Ltd could Sue Beanstalk
according to S126 of CA.
Hannigan, B (2018). Company Law. Oxford University Press, USA.