Disputes between officeholders and/or members of small proprietary companies - video transcript
Transcript of video about disputes about between officeholders and/or members of small proprietary companies, presented by Phoebe, ASIC's Misconduct and Breach Reporting team, uploaded 6 May 2014.
What do these disputes involve?
Usually these disputes involve disagreements between shareholders and business partners about the ownership, management or control of a company.
The rules which govern how a company operates are contained in a document called the constitution.
The constitution acts as a contract between the company, its directors and its members (who are commonly referred to as shareholders).
If someone breaches the rules of a company’s constitution, the other company directors or shareholders can take the dispute to court to have it resolved.
There are also other remedies which may be more suitable to your circumstances.
What are my options?
The best way to resolve these disputes is to know your rights and to communicate with the other parties involved.
We recommend you seek legal advice to discuss the matter or resolve it through mediation.
If you are unsure about how to access legal advice, contact the Law Society in your state or territory.
You can check what company officeholders are obliged to do under the law - and what members’ rights are - on the ASIC website under the - 'For companies' - tab.
What is ASIC's role here?
Disputes between small proprietary company directors and/or shareholders are often about a party's legal rights under the company's constitution.
These disputes do not usually affect consumers or investors in the broader community.
For this reason, our role in helping you resolve this kind of dispute is limited to recommending you seek legal advice.
That legal advice will help clarify the issues involved in your problem and assist you in reaching a resolution.
It might include considering options such as mediation, private court action or accessing some of the remedies available to shareholders under the Corporations Act.
ASIC does not give legal advice.
While we can take action where there has been a breach of the Corporations Act, we exercise our discretion in deciding whether to investigate a report of a potential breach.
For more information see Information Sheet 162 Disputes between officeholders and/or members of small proprietary companies.