Assignment Task:
Janet is a major shareholder in NewAge Pty Ltd and has noted that the company maintains the old-fashioned 'memorandum of association' which has been prepared for NewAge Pty Ltd. The memorandum contains an objects clause which limits the objects of the company to the development, manufacture and sale of commercial computing devices. With the changing times where more people are working from home, Janet believes that the devices will soon be able to be used on a widescale domestic basis by businesses looking to automate their computing needs and equip their workers to adjust to the home working environment. The company may therefore expand into a number of related areas including remote office management and software applications.
Janet has spotted an opportunity that may allow the company to enter into a contract with like- minded companies for the development of state of the art remote office management equipment and software. She is however concerned that the narrowness of the 'memorandum' may hamper the company's ability to move into the emerging lucrative area and also the development and commercial exploitation of the new opportunity.
Janet has read that there is no legal reason to have a memorandum or articles, even if they are now called 'corporate constitution'. When Janet discussed this with the company's other shareholders, they told her that they had been advised by the lawyers that this was the standard form for their companies, and that there was no cause for concern. Janet is not convinced.
REQUIRED:
Advise Janet of the company's position regarding any new contracts that it may enter in connection with the development of remote office management equipment and software and also explain how the replaceable rules may be of use to the company in the future.