Notes

1) The moratorium effect generally refers to temporarily halt or stop an activity or a legal procedure due to issues that led to the suspension until further analysis is carried out to consider for lifting the moratorium. Moratoriums can be executed business firms, enterprises, and the government. There are many causes to moratorium however one major reason is due to financial crisis. For instance, in cases of bankruptcy moratorium can be applied to stop the payment of debt temporarily or business companies for the time being halt the salary of employees due to provisional economical shortages. This can help firms to avoid debts which is a way to revive the losses of a company. For example, insurance companies are known to issue moratorium to avoid losses of investment due to natural causes.

In Australia, the moratorium effect can be applied during bankruptcy to temporarily freeze the payments of debts by applying for Temporary Debt Protection (TDP). Once applied for the protection the person receives a 21-day trial under which no creditor is viable to harm them in any way that gives some time to recover our due payments. After the application gets accepted another 12-month extension can be applied as well.

However, the section 54 A under the Bankruptcy Act 1966 states that, “in the form approved by the debtor, a statement of the debtor's intention to submit a petition to the Official Receiver may be filed by the borrower”, views this as an act of bankruptcy. Therefore, creditors can file legal cases to force a debtor into bankruptcy.

2) Australian companies are mandatory to have a memorandum and articles of association since 1998. Both the documents are merely considered as constitution of the company in Australia. However, constitution is not must for every proprietary company in Australia. All companies have rights to establish their own legislations under the requirements of Corporations Act 2001. Here, section 136 (1) in the Corporations Act outlines that companies that are registered without any legislations have to adopt one after passing special resolution and a company is liable to adhere a constitution under the specification of its founding members. Also, the section 233 of the Corporations Act states that the court can order a company to implement a constitution if needed.
A firm is obligated in accordance with Section 141 of the Corporations Act to substitute its internal rules. However, the laws of substitution do not apply if the owner and shareholder of the firm is the same person. The rules of replacement for the internal governance structure of a corporation function as the contract between the firm and each member and between members of distinct companies also. A violation of the norms of replacement does not imply a violation of the Corporations Act, however, the shareholders of the corporation must comply with any substitute regulations. Therefore, this allows the members to ask for recompense with regards to the replaced rules.
3) A derivative action means to put forward legal proceedings for a cause of action against a member or group of members of the company. Under the section 236 of the Corporations Act 2001, one or a group of members of a firm have the rights to file against the harm done to the firm. The section outlines that the members are responsible to show actions since the wrongdoers are the monitoring the company and a company itself cannot sue them. Accordingly, section 236(1) of the Corporations Act states that "a person may bring or intervene in any proceedings to which the company is a party for or in respect of a specific phase of that process on behalf of the company". Under Section 236(1)(a), the person who wishes to seek derivative proceedings should be an existing or former or on the verge of being a member and following the leave allowed under section 237 of the Corporations Act 2001. So, at the time of the alleged offense or misbehaviour, the applicant must not be needed to have been a corporate member. Section 260 defines "derivative claim," in relation to the course of action granted on behalf of the company to an action of a member of a corporation seeking remedy. Section 260 (3) specifies the circumstances under which derivative actions may be taken by a company director solely in respect of a cause of action which involves carelessness, infringement of duty, or a violation of trust.
This does not, however, include other parties such as an auditor because the board is responsible for the decision to suit a negligent auditor. For example, A shareholder was not entitled to file a misconduct against a firm under Common Law since the court stated that a shareholder did not have the right to cause an action against the company due to corporate personality and majority rule.