Bishop Pty Ltd is a company that manufactures bicycles for export to the European market. Its directors are Ford, Harvey and Suzuki. Last year, Ford was sent by the company to survey the market in...

Corporation Act (Cth)        4
CORPORATION ACT 2001 (Cth)
Table of Contents
Introduction    3
Analysis    4
Conclusion    9
References    10
Introduction
    Corporation Act is the laws of the Corporations or the principal legislation which is used for regulating the business organizations in Australia. It helps to regulate the establishment of the company operations, the roles and responsibilities of the officers, takeovers and the ways to increase the funds. This act was established on 1st July, 2019. The provisions of this act help to protect the whistle-blowers, the liabilities with respect to the board members and the senior managers of the organizations against any form of penalties. This provision is applied to the regulated entity and consist of the Commonwealth constitution (University of New England, 2017). Through this discussion we will analyze the case study of Bishop Pty Ltd which is a manufacturer of bicycle and exports its products to the European markets. The company has directors who are from renowned companies such as Ford, Harvey and Suzuki. Further, the director of Ford was sent by Bishop Pty Ltd for surveying the European market. The company was able to secure atleast 5 contracts which was worth $1.5 million on a yearly basis for the next three years. Out of the five contract, four contracts were done through Letter of Credit but the last contract which was with Zoe Ltd, the payment was made only on the delivery of the bicycles. Although the goods were shipped to Zoe Ltd in Europe, unfortunately the company was observed to be a scam. As a result, Bishop Ltd lost $200000. Hence, the board of Bishop Ltd was upset on the fact that Ford did not comply with due diligence prior to signing the contract with the sham company Zoe Ltd.
Analysis
A. Explain what sections from the Corporations Act 2001(Cth) were breached by Ramsay and Briscoe
There are various duties which are fiduciary in nature and are being imposed on the directors of the company who are hired from the renowned companies such as Ford, Harvey and Suzuki according to the Corporation Act, 2001. Hence, the individuals who are appointed as the directors of the company needs to adhere with the Corporation Act while carrying out their duties. But the individuals appointed by the government board are not a part of this Corporation Act yet the duties and responsibilities of the directors appointed by the government board remain the same. These are under the Corporation Act; the directors are required to act in moral faith and for an appropriate purpose. They should act with care and due diligence, must avoid any forms of improper information, must utilize their position for the benefits of the company instead for their own benefits and must try to disclose definite interests which are not confidential in nature (Queensland Government, 2001).
    As per the case study it was observed that the director appointed from Ford clearly breached the section 180 of Corporation Act. This Act provides civil duties for the directors of the company for exercising reasonable degree of care along with due diligence with respect to exercise of power while steering and discharging the duties. Further it needs to be observed if the judgement made by the directors is in the best interest of the corporation and is rational, except it is supposed that no accountable person in their position would embrace (Commonwealth Consolidated Acts, 2001). In this case, Bishop Pty Ltd lost $200000 as Zoe Ltd was a sham company and was unable to pay the amount on the bicycle which was shipped to Europe. It was mainly due to the fact that Ford did not work with due diligence while signing the contract due to which Bishop Ltd was misled on the fact that it was one of the prime hypermarkets. The director from Ford therefore was unable to exercise reasonable degree of care and due diligence. Hence, the judgement made by Bishop Ltd was made with no good faith and was for inappropriate purpose (Commonwealth Consolidated...