Jane is a director of a corporation that she founded called JCo Pty Limited. A few weeks ago, Jane told you that corporations are great in that they have their own personality. This means that the corporation can sue and be sued in its own right. Jane also let you know that JCo Pty Limited can incur debts.
Today, Jane is very upset. She lent $5,000 to JCo Pty Limited so that the corporation could pay its trade creditors. When Jane tried to get the money back, she was told that repayment may take some time. As a result, she has taken legal action against JCo. The other members of the JCo Board have alleged that Jane had breached her duty as a director. What were the issues that may have caused Jane to breach her duty as a director?

Question

Jane is a director of a corporation that she founded called JCo Pty Limited. A few weeks ago, Jane told you that corporations are great in that they have their own personality. This means that the corporation can sue and be sued in its own right. Jane also let you know that JCo Pty Limited can incur debts.

Today, Jane is very upset. She lent $5,000 to JCo Pty Limited so that the corporation could pay its trade creditors. When Jane tried to get the money back, she was told that repayment may take some time. As a result, she has taken legal action against JCo. The other members of the JCo Board have alleged that Jane had breached her duty as a director. What were the issues that may have caused Jane to breach her duty as a director?

Answer

Jane had a responsibility to ensure that JCo Pty Limited can and does pay its debts on time and Jane created a debt which could not be repaid on time. Jane has responsibility to act JCo’s best interest. Suing JCo is not in JCo’s best interest.

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Answer

Jane had a responsibility to be honest and careful in her dealings at all times. Jane was dishonest in lending the money to JCo. Jane has responsibility to act JCo’s best interest. Suing JCo is not in JCo’s best interest.

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Answer

Jane had a responsibility to know what her company is doing financially and practically. The other directors think that Jane should have known better. Jane has responsibility to act JCo’s best interest. Suing JCo is not in JCo’s best interest.

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Answer

Jane had a responsibility to ensure that JCo keeps proper financial records. Jane’s loan was not properly recorded. Jane has responsibility to act JCo’s best interest. Suing JCo is not in JCo’s best interest.

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Jane is a director of a corporation that she founded called JCo Pty Limited. A ...

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