Wow Limited Contract With Distrustful Bank Can Be Terminated On Grounds That Vera Had No Authority To Enter Into Such Agreements?
Vera has no authority to make such kind of contracts according to act 126 which limits the power of employees in such a way that an individual of a company may make, vary, ratify and discharge a contract according to exercised by the constitution. In the case of Wow Ltd and Distrustful bank, Vera have to get Approval From the Director in meeting along with the special resolution through replaceable rule to make a contract with Wow Ltd because constitute limits the power of decision making above $50000 amount and nature of business rather than furniture manufacturing. Section126, 134 to 141 from corporation act 2001
In this case Vera must get the approval from the members of company 217 to onward by fixing a meeting of all members with the approval of director. When the meeting was fixed agenda of meeting was dispatched to each of member in written to have better understanding. Prefeasibility for the business with Wow Ltd must determined and discussed in meeting. All of the members or majority of the members should agree with special business resolution. After agreeing upon the new line of business they will have to follow the replaceable rule to make special resolution in constitution to enter in new business line. Section 217, 136 & 135 from corporation act 2001.
After that, Urban Pty Ltd must have to get permission from the ASIC to make special resolution in constitutions. If special resolution in constitutions has approved by ASIC. In this case, the modified constitution copies must disbursed between all of its members. This change will affect the percentage of share of the employees in such a way either all members have to take some additional share to raise funds to carry on new business or it will affect the member’s liabilities. Section 217,137 & 140 from corporation act 2001.
In short company can establish a business with Wow Ltd and getting loan from the distrustful bank. It will be only possible when company make changes to its constitution. This method will require a little bit extra time to accomplish this task.