Section 131: Duty of Directors to Act in Good Faith and in Best Interests of Company

Wednesday, September 20, 2017
In accordance with Section 131 of the Companies Act 1993 ("Act"), directors have a duty to act in good faith and in what they genuinely believe to be the best interests of the company.  While it may be expected that directors should always behave in such a manner, and not place their personal interests ahead of the company's, various judgments have explored the extent of this duty and provided more information about the considerations director should take account of when exercising their powers.

The Duty
As noted in the decision of Sojourner v Robb1, the duty is one of loyalty and arises out of the fiduciary relationship that directors owe to the company from their position as its agents.  Additionally, although a director must act in good faith and in the best interests of the company on most occasions, Section 131 of the Act outlines that there are a few exceptions to this duty which allow a director to act otherwise, as follows: Read more

Section 135 of the Companies Act - Reckless Trading:

Tuesday, July 18, 2017

Non-Executive or Passive Directors and Directors' Duties: The Courts Take no Excuses for a "Hands Off" Approach Read more

Are You Getting Your Fair Share of Relationship Property Upon a Break Up?

Thursday, April 06, 2017

The Property (Relationships) Act 1976 ("the Act") applies to marriages, civil unions and de facto relationships.  Generally under the Act, at the end of one of these relationships, the parties receive a 50:50 share of all the relationship property.  This usually includes the home, family chattels, and all other property acquired during the relationship.  However the Court does have the power to award a lump sum payment or order the transfer of relationship property from one party in the relationship to the other under Section 15 of the Act. Read more

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