Australian Corporations Law - Vesna - Kelvin Case Study - Law Assignment Help

Assignment Task:

Purpose:

This assignment is designed to assess your level of knowledge of the key topics covered in this unit.

Unit Learning Outcomes Assessed:

1. Discuss the foundations of Australian Corporations Law and constitutional aspects and administration.

2. Apply legal principles to real case situations in the context of different types of business organizations and the legal issues that arise in day to day business.

3. Analyse the incorporation process and characteristics of corporate legal personality.

4. Demonstrate the legal principles for managing a compan? in par?ic?lar ?he compan??? relationship with others.

5. Critically analyse the concept of corporate internal rules and management.

6. Analyse the role and responsibility of directors and members in the management of the company.

7. Analyse the in?erac?ion be??een member?? righ??? direc?or?? d??ie? and corpora?e governance.

8. Analyse the procedures regarding external administration and winding up.

9. Identify and analyse legal issues arising from the administration of a company.

Description: Each week students were provided with three tutorial questions of varying degrees of difficulty. These tutorial questions are available in the Tutorial Folder for each week on Blackboard. The Interactive Tutorials are designed to assist students with the process, skills and knowledge to answer the provided tutorial questions. Your task is to answer a selection of tutorial questions for weeks 6 to 10 inclusive and submit these answers in a single document.

 The questions to be answered are:

Week 6 - Question 1 (10 marks) Pol?e??er i? a direc?or of S??le P??? Limi?ed in?ol?ed in making ?omen?? clo?hing?

Situation 1. She arranges with the compan??? bank ?o ?ran?fer an amo?n? of Ψ?????? from ?he company account into a personal bank account held by her in her own name. She uses the funds to finalise some outstanding personal debts.

Situation 2. As a director she receives information that the company is in a serious financial position. She arranges to transfer a larger amount of the assets of the company over a new proprietary company that she formed with the intention of caring on the same business.

Situation 3. Contrary to a resolution of the Board and notwithstanding established business practice that limits credit to $20,000 she allows a trade debtor (who has a history of bad debts) to exceed its credit limits by $25,000. The debtor fails to pay the outstanding amount of $45,000. Can she rely on the business judgment rule in this situation?

Required: Has she breached any duties under the Corporation Act in the three (3) situations listed above?

Week 7 - Question 2 (10 marks) Kelvin is considering buying shares in a company. Kelvin asks you to explain to him what is meant by ?he ?erm? ?member? and ??hareholder?? and ?he differen? ?a?? in ?hich a person may become a member. He also asks you to explain who may be eligible to become a member, and how many members a company is permitted ?o ha?e? Finall?? Kel?in a?k? ?How does a person cease to be a member of a company?? Required: Advise Kelvin.

Week 8 – Question 3 (10 marks) Borisda Builder Pty Ltd has five (5) directors: Vesna, Sergey, Ilyych, Mikhail and Zviad. Mikhail and Zviad are working directors. They manage the day-to-day operations of Borisda Builder Pty Ltd. The company is engaged in all aspects of home building. Ilyych is an accountant and he helps out with the production of monthly financial reports for all the directors. (This question is continued over the page)

3 Week 8 – Question 3 (10 marks) (Cont’d) Vesna has attended University and holds an engineering degree and a Masters of Business Administration (MBA). She has a good knowledge of the building industry and the way company finances work. Serge? i? Z?iad?? bro?her and ha? had a long hi??or? of depre??ion and lack of ?elf-esteem. Zviad ??ppor?ed Serge??? ?i?h ?o become a board member e?en ?ho?gh he offered little by way of expertise. Z?iad ?ho?gh? ?ha? i? ?o?ld help Serge??? per?onal de?elopmen? b? gi?ing him a differen? foc??? Bori?da B?ilder P?? L?d had a record ?ear in ????? The go?ernmen??? fir?? home b??er?? grant meant that the company had many building contracts. The directors met in July and decided to pay a dividend of 9c per share. The company has experienced a severe decline in new contracts in the last two months. This is due in part to a number of cut-price builders offering cheap building contracts. This has placed the company in financial difficulties. Mikhail and Zviad have been with the company since day one and are attached to the company. It is their main focus and provides them with emotional and financial wellbeing. Sergey has never read any financial statements that have been sent to him. He did not check the compan??? financial re??rn? for an? of ?he ?ear? before he ?a? appoin?ed and he ha? ne?er read an? reports since he was appointed. Shareholders of Borisda Builder Pty Ltd number 15 and include the directors and members of the founding family who have held onto shares but take little interest otherwise. Ve?na?? bro?her Do?g ha? a b?ilding de?ign compan?? Do?g ?he De?igner P?? L?d? and Ve?na a??end? its Board meetings and gives advice. Because of her education and experience the Board of Doug the Designer Pty Ltd follows her directions. Recently, Borisda Builder Pty Ltd contracted with this company. It was Vesna that convinced the rest of the Board of Borisda Builder Pty Ltd to enter this contract. It was Vesna that had collected all the quotes for this work and they all exceeded the Doug the Designer Pty Ltd quote. This was due to the fact that Doug the Designer Pty Ltd had put in a quote below the cost price of the work because Vesna had promised more work from Borisda Builder Pty Ltd in the future. Ilyych attended a Board meeting a few months ago and brought with him what he believed was a great idea. His proposal was that the company become involved in constructing cubby houses for children out of the leftover materials from around their building sites. The other Board members were not so convinced but Ilyych being an accountant produced some very impressive figures based on informa?ion from ?he compan??? file?? The board ?o?ed against the proposal after Vesna, with her MBA training, argued the company should focus on its main game of house building. Ilyych is disappointed but yesterday signed a deal with another building company known as Canweafixdat? Pty Ltd. The deal involves Ilyych being paid a commission of 10% for every cubby house sold and a place on their Board. Borisda Builder Pty Ltd is having financial problems yet the Board continues to allow the company to trade without considering the consequences. Required: Discuss the statutory and common law positions of the directors in the case study above.

4 Week 9 – Question 4 (10 marks) Joe is a company director in a proprietary company. He is proposing to put a resolution to his company that it buy out the smaller holdings. Joe reasons that there are a number of quite large shareholdings and many of the smaller members have little interest in the company. Joe does not want to force any member ?o ?ell ?heir ?hare? b?? ?o?ld like ?o ?clean ?p ?he regi??er? b? b??ing o?? ?he ?maller holdings.

Required: Advise Joe on the legal implications of his plan.

Week 10 – Question 5 (10 marks) Flywell Ltd is the owner of an Australian domestic airline. The Australian travel market is very competitive. The management of Flywell Ltd is concerned about the plans of a rival airline company intending to expand its Australian domestic operations. The board of directors of Flywell Ltd decides to revamp its fleet of aircraft and purchase extra planes, but the company does not have the capital. Flywell Ltd wishes to induce each investor to invest $10,000 with the company in exchange for shares in the company. The company aims to raise between $9 million and $11 million in new funds. The company has approached you for advice. Required: Advise Flywell Ltd of its fundraising obligations under the Corporations Act, paying particular attention to the specified facts.

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