Since the adoption of the 1996 Constitution, South African law has been reviewed comprehensively. One of the scrutinised areas is corporate governance. Because company management is a vital task to the company and the shareholders, directors play a very important role in the execution of this task. It should be noted that a company cannot act in its own. It acts through its representatives which consist of the board of directors as entrusted with the management of the company’s business. Cumulatively they are subjected to fiduciary duties. These duties bind directors, individually and collectively, with the obligation to act in the best interests of the company and to do so in good faith. Within these director’s duties to act in good faith lies the duty of director’s not to unlawfully …show more content…
In searching for a fair test that addresses practical problems and strikes flexible a balance between the interests of the company and that of the director within the South African jurisdiction, this research is going to analyse the tests from different jurisdictions. It will begin by defining “corporate opportunity” the describe the practical implications of the South African tests, then present the Canadian corporate opportunity approach and tests for lawful usurpation of corporate opportunities, then compare and contrasts both approaches with the aim of making recommendation as to which tests should be adopted in South Africa.
In Da Silva v CH Chemicals [2009]1 All SA 216 the court states that a corporate opportunity, could be defined as any economic or business opportunity, material or immaterial property to which the company has a claim. If a director acquires for himself an opportunity that belongs to the company, the law will treat such an acquisition as having been made for the company, therefore it may subsequently be claimed by the company from the
William Evan and Edward Freeman, in their essay “A Stakeholder Theory of the Modern Corporation,” argue that the objective of a company and its managers is not only to maximize profit for its owners and stockholders, but also to balance the benefits received or losses incurred by other stakeholders—employees, suppliers, customers, and the local community, all of whom may be influenced by company decisions. As the owner of MSO, your aim is ostensibly to maximize profits for yourself, but unlike most other indicted CEOs, you have not tried to obtain personal gains at the expense of the stakeholders of your enterprise. Rather, the charges that have been brought against you are for your dealings with another company; in this day and age where investors bemoan the lack of ethics of CEOs who use the power of their position in the boardroom to achieve selfish gains at the expense of their own company and its stakeholders, the charges of insider t...
On December 19th 2007, a small chemical manufacturer T2 Laboratories suffered a catastrophic failure and release while in production of a compound that is produced to increase octane in gasoline and is a common additive in fuel production Methyleclopentadienyl manganese tricarbonyl or MCMT. The failure occurred during production and resulted in the death of 4 and injuries to 32 people, 28 of which were members of the community. (CSB, 2009)
Sale, H. A. (2011, March). The new “Public” Corporation. University in St. Louis Legal Studies Research Paper No. 11-04-01, 74, 137. Retrieved from: http://ssrn.com/abstract=1832619
• Horizontal snapshot (Service provide, revenue, industry, CEO, and more) of the client under the banner picture
The Political, Social, and Legal Environment of Business. Case Study Analysis: Union Carbide Corporation and Bhopal. A single slip in action may cause lasting sorrow. A slight mistake in operation at a Union Carbide pesticide plant in Bhopal, India, caused a lot of deaths and injuries. What a tragedy it is.
This report gives the brief overview of the concept of corporate governance, its evolution and its significance in the corporate sector. The report highlights various key issues and concerns that are faced by the organizations while effectively implementing and promoting Corporate Governance.
Currently, directors have no prima facie entitlement to be remunerated for their work (Hutton v West Cork Railway Co 1883), but Article 23 of the Companies (Model Articles) Regulations 2008 establishes that it is for directors to decide the lev...
The main areas that needs to be investigated as a potential investor in one of the emerging markets is to see wither the investment is profiting the community it should serve the community as a whole, without the concept of corporation we wont have the ci...
Bibliography: Turnbull, S. (1997). Corporate governance: its scope, concerns and theories. Corporate Governance: An International Review, 5 (4), pp. 180--205.
Despite legislation, the Courts tend to be hesitant when it comes to business decisions which have been made by directors. This was demonstrated in the case Re Smith & Fawcett Ltd . If a director can prove, under section 180(2) that the directors powers had been used for a proper purpose and that they reasonably believed that it was in the best interests of the business, it will be considered a defence.
Securities Commision Malaysia. (2014). General Article: Corporate Governance. Retrieved March 26, 2014, from Securities Commision Malaysia: http://www.sc.com.my/corporate-governance/
The Principle of Separate Corporate Personality The principle of separate corporate personality has been firmly established in the common law since the decision in the case of Salomon v Salomon & Co Ltd[1], whereby a corporation has a separate legal personality, rights and obligations totally distinct from those of its shareholders. Legislation and courts nevertheless sometimes "pierce the corporate veil" so as to hold the shareholders personally liable for the liabilities of the corporation. Courts may also "lift the corporate veil", in the conflict of laws in order to determine who actually controls the corporation, and thus to ascertain the corporation's true contacts, and closest and most real connection. Throughout the course of this assignment I will begin by explaining the concept of legal personality and describe the veil of incorporation. I will give examples of when the veil of incorporation can be lifted by the courts and statuary provisions such as s.24 CA 1985 and incorporate the varying views of judges as to when the veil can be lifted.
Nottingham Trent University. (2013). Lecture 1 - An Introduction to Corporate Governance. Available: https://now.ntu.ac.uk/d2l/le/content/248250/viewContent/1053845/View. Last accessed 16th Dec 2013.
In 2011 PepsiCo announced the launch of their Social Vending System. This system featured a full touch interactive screen. A consumer can select a beverage and enter the reciepent's name, mobile number, and personalized message and gift it with a video. PepsiCo uses technology to their advantage for global implementation.The company uses media sites in multiple was as advertisement and marketing tools.
According to Corporation Act 2001 s124(1), it illustrates that ‘’A company has the legal capacity and powers of an individual both in and outside the jurisdiction” . As it were, company as a legal individual must be freely with all its capital contribution shall embrace liability for its legal actions and obligations of the company’s shareholders is limited to its investment to the company. This ‘separate legal entity’ principle was established in the case of Salomon v Salomon & Co Ltd [1987] as company was held to have conducted the business as a legal person and separate from its members. It demonstrated that the debt of company is belonged to the company but not to the shareholders. Shareholders have only right to participate in managing but not in sharing the company property. Besides ,the Macaura v Northern Assurance Co Ltd [1925] demonstrates that the distinction between the shareholders and company assets. It means that even Mr Macaura owned almost all the shares in the company, he had no insurable interest in the company’s asset. The other recent case is the Lee v Lee’s Air Farming Ltd [1961] which illustrates that the distinct legal entities between employee ad director allows Mr.Lee function in dual capacities. It resulted that the corporation can contract with the controlling member of the corporation.