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Which of the following statements about the effect of the corporate constitution (or replaceable rules) is NOT correct?

a)it operates as a contract between each member and each officer of the company.
b)it operates as a contract between a member and each other member
c)it operates as a contract between the company and each member
d)it operates as a contract between the company and each director

User Anatoliy
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The statement that is NOT correct about the effect of the corporate constitution (or replaceable rules) is (d) it operates as a contract between the company and each director.

The statement that is NOT correct about the effect of the corporate constitution (or replaceable rules) is (d) it operates as a contract between the company and each director. The corporate constitution or replaceable rules generally operate as a contract between the company and its members, not between the company and each director.

For example, the replaceable rules in Australia's Corporations Act 2001 provide a set of default rules that can be applied to the internal management of a company if the company does not have its own constitution. These rules are binding on the company and its members, but not specifically on the directors.

By contrast, a director's relationship with the company is generally governed by their appointment as a director and the duties and responsibilities that come with that role, rather than through the corporate constitution or replaceable rules.

User Mflodin
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