Corporate Law and Regulation Business Dealing

Question: Discuss about the Essay for Corporate Law and Regulation of Business Dealing. Answer: Part A A related party transaction may be referred to as any particular financial arrangement or business dealing which is enacted between two parties that have a special relationship that exists before the deal takes place. An example of an related party transaction could be extension of loan to any non-executive director or making an investment in a company whose major shareholder is the CEOs wife (Gibson Fraser, 2014). In all such investments, approval from the shareholders may be required as there are high chances of misrepresentation and favouritism being done in such deals. In accordance with Chapter 2E of the Corporations Act 2001, if any financial benefit is extended by the company or its related entity, then approval from shareholders is to be sought unless it is in set of exceptions list where approval is not required (Allens, 2011). Part B Tina in the given case has breached her fiduciary duties both as an agent to the shareholders and also as an director. One of the fiduciary duties of the agent is that the agent should not engage in any business that competes with that of the principal. In case, the agent wishes to do that it must engage in the same with the informed consent of the principal. Without the informed consent from the principal, this amount to breach of the fiduciary duties associated with agency relationship (Latimer, 2005). Besides, as a result of her conduct she has also violated Section 181 and Section 182 of the Corporations Act 2001. Section 181 has been violated since Tinas conduct is not in the best interest of the company and the shareholders. Because of her actions, the company has lost advertising revenue. Also, Section 182 has been violated since Tina as a result of her behaviour is acting in a self-serving manner which she must not do as she till the last day is a representative of the company (Lindgren, 2011).. It is apparent from the above discussion that Tina has not only breached her fiduciary duties as an agent of the company but is also in breach of the statutory duties of the director as per the Corporations Act 2001. As a result, XYZ should initiate legal proceedings against Tina for her self-serving conduct with the intention of recovery of losses caused due to shifting of advertisement to clients which was posted during her stint with XYZ (Gibson Fraser, 2014). References Allens 2011, Head Office and Governance, Linklaters Website, Available online from https://www.allens.com.au/pubs/cg/focg21apr11.htm (Accessed on August 17, 2016) Gibson, A Fraser, D 2014. Business Law, 8th eds., Pearson Publications, Sydney Latimer, P 2005. Australian business law, 24th eds., CCH Australia Ltd. Sydney Lindgren, KE 2011, Vermeesch and Lindgren's Business Law of Australia, 12th eds., LexisNexis Publications, Sydney