Tatts r Us Ltd – Private Limited Company
Yes. The business under the name, “Tatts r Us Ltd,” may either be a private limited company or public limited company. A private liability company best suit their needs, mainly because it has one or more shareholders or owners. According to Section 755 of the 2006 Companies Act, private companies buy-in through private sales and cannot sell or publicize shares to the general public. Stimpson Peter and Farquharson Alistair, Cambridge International AS and A Level Business Coursebook (London, UK: Cambridge University Press, 2014), 19. In a private liability company, directors are company employees who are responsible for all administrative tasks but do not have to be shareholders in the company. Bob and Angeline wish to be the only members and directors of the company and keep the company’s affairs private and confidential.
Question 2. Reinstating Antonio
The company’s constitution provides that Antonio is appointed master tattooist for life. However, directors have decided to terminate his employment. The directors may not reinstate Antonio’s job even if he is now a shareholder. The company’s internal operation and management may be governed by the replaceable provisions outlined in the Company’s Constitution, Corporation Act 2001, or both. Section 203F of the replaceable rules provides that person ceases to be the managing director if they cease to be directors. S 203F also state that the directors may revoke an appointment of a managing director. Section 198A of the Corporations Act 2001, a replaceable rule, provides that the business and operation of the company is to be “managed by or under the direction of the directors.” In Howard Smith Ltd v. Ampol Petroleum Ltd, directors may make decisions against the majority shareholders’ wishes. Howard Smith Ltd v. Ampol Petroleum Ltd [1974] AC 821.
Similarly, in Imperial Hydropathic Hotel Company Blackpool v. Hampson, the Court held that members resolution was ineffective to “override a decision by the directors if the power to manage the business of the company is granted to them.” Imperial Hydropathic Hotel Company Blackpool v. Hampson, [1882] 23 CH D 1. Company’s directors are fiduciaries and must exercise their duties and responsibilities for the benefit of the company, rather than in the interests of third parties as provided by Section 181(1) of the Corporations Acts.