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Investlaw 3+4 (Director Duty (Duties (3. Duty to avoid conflict of…

- - - - Member's interest (Case cheatsheet)
      - Employee's interest (Cheatsheet)
      - Good faith: (Case cheatsheet)
      - Corporate group interest: (Cheatsheet)
      - Remedies
    - - a) Objective purpose for which a power was granted - considered by court as “proper”- raising capital; issue shares as consideration for purchasing property.
      - b) (vi phạm nếu)
        
        Maintain control of the existing directors in power
        
        To defeat a takeover bid
        
        Create or destroy the voting power of majority shareholders:
      - Remedies
    - - No conflict rule
      - No profit rule
      - disclose to other directors ‘material personal interests’
      - not to misuse position and information
      - not to disclose confidential information
      - Remedies
    - - Subjective element:
      - Objective elements:
      - Remedies
- - - - <s706> An offer of securities for issue needs disclosure to investors unless exemptions under s.708 apply
        �
        
        <S700(2)> “offer” is defined as inviting applications – invite investors to apply for shares
        (same as invitation to treat, but still considered as an offer to avoid advertising of co.)
        
        <S92(4)> defines “securities” as shares of a body, debentures, options)
      - <s727> A person is prohibited (cấm) from offering securities or distributing application forms UNLESS disclosure document has been lodged with ASIC. Breaching s 727 is a CRIMINAL offence (s.1311).
        �
      - EXEMPTIONS (miễn) <s708>:
        
        1. Small scale offerings
        �
        
        2.Sophisticated investors
        
        Large offer.
        
        Wealthy investors
        
        Experienced investors.
        
        Professional investors
        
        3. Executive officers ��
        
        4. Existing security holders
        �
      - Type of disclosure
        
        General Rule
        
        3. Profile Statements �
        
        <S. 721(2)> Allows these brief documents to sent to investors instead of a prospectus, but still need to lodge full prospectus
        �
        
        <s. 714> Content includes identifying the body, nature of risks, amounts payable, etc
        Now rarely used after FSRA 2001 was enacted. Originally intended for in MIS. Now Pt 7.9 applies => Product disclosure statements.
        
        2. Short form Prospectus: �
        
        Overcome the complaint that prospectuses are too lengthy and complex.
        <s. 712(1)> Allows a short form prospectus to refer to material in documents lodged with ASIC.
        
        1. Prospectus (thông cáo)
        
        a. Prospectus contents
        
        b. Forecast
        
        c. Alternative Disclosure test
        �
        
        4.Offer Information Statements (OIS):
        *<s. 709(4)>* OIS provides an alternative to prospectuses for small fundraisings., amount raised less than 10 million-total. (replaces the need for prospectuses, cf a Profile statement).
        �
        �
    - - <s.727> Quoted securities (listed on stock exchange): disclosure document can be given to potential investors, immediately after they have been lodged with ASIC.
        �
      - Unquoted securities: 7 day waiting period, so if any incorrect information is contained in the disclosure doc, parties can apply for injunction (lệnh cấm) to stop the fundraising.
        �
    - - b) ASX Listing rules: additional protection to investors.
        
        Securities much more marketable if listed,
        
        <s723> – must refund if not listed, if disclosure document says it will apply for listing.
        �
      - c) Expiry of disclosure document � 13months <s711>�
      - a) Minimum subscription:
        <s723(2)> if disclosure doc states that securities will NOT be issued UNLESS applications for a minimum number of securities are received;
        Aims to protect early subscribers where co unable to raise a minimum amount.
        �Application money must be held in trust until minimum subscription is met.
        <s724> If not met within 4 months of initial disclosure doc, must refund money or give applicant a choice of refund.
        �
    - - <S734(5)(b)> Advertising UNLISTED securities before lodgment is limited to:
        
        Statement identifying the offer or securities
        
        Statement of how to receive disclosure doc,
        
        Statement that disc doc will be avail, application form attached to disc doc. etc
        
        After lodgement, must still mention disclosure document in advertisement.
        �
  - - - Circulating Security Interest: - Secured party has given the grantor authority for any transfer of the personal property to be
        made, in the ordinary course of business(if they are made for the
        purpose of carrying out on the business), free of the security interest (S340PPS Act).
        
        Grantor does not have power to dispose assets without replacing them by others to cease (ngưng) to be a going concern, because this would not be in the ordinary course of business.
        
        �
        �
      - Non-Circulating Security Interest: - Assets not disposed/ sold in
        normal course of business.
        �- Grantor is not entitled to sell or otherwise dispose of the collateral free of the security interest without the secured party’s consent.
        STRONGER: bc
        
        Non-circulating security interest entitles the lender to take possession, sell and repay. => creditors do not have to share with anyone.
        
        Circulating security interest, a receiver(work for secured party with proper training) must pay debts to certain unsecured creditors first (such as employees). Liquidator must also pay certain unsecured creditors first.
      - Registration + Method + Priority: CASE CHEATSHEET