Corporate Law - Robin A’bscond Case Study - Law Assignment Help

Assignment Task:

Question #1

Facts: 

Investor, Robin A’bscond, has a background in management.  She worked as a management assistant in McDonald’s for 15 years before becoming the CEO of a software sales company headquartered in Wagga Wagga. She has made (and lost) a lot of money of the years investing in start-up companies. Among her other investments, Robin decided to invest in a start-up tech company 4Eyes Pty Ltd (“4Eyes”) providing remote proctoring services to universities. With the arrival of COVID, demand for 4Eyes services has boomed and the company appears to have a very bright future. 

4Eyes has only ordinary shares. It has 10 shareholders. There are three directors. Larry, Curly and Moe and of whom only Moe attends to issues of corporate governance. Moe and Robin are best friends and have shared positions on several boards and trust each other completely. There have been no directors’ meetings in the last several years. Nor for that matter, have there been any members’ meetings. 

Robin was the second investor in the company. She initially invested $500,000 to buy 500,000 shares, being 10% of the company’s common shares—the only class of shares that the company has. As the company required further funding, she decided to invest an additional $1,000,000 of which $500,000 is a debt to be secured against the assets of the company and an additional $500,000 for shares. At the same time, she appointed herself to the Board of Directors and Moe has told everyone she is a director. 

She has forwarded the $1,000,000 and placed it into the company accounts, registered the $500,000 debt against the company in compliance with all Personal Property and Security Act provisions and issued herself 500,000 shares in the company’s register.

Although demand for the product has gone well, Robin is facing some challenges.  Recently, one of the shareholders has started to complain. The shareholder claimed she does not have authority to issue the shares to herself because she has not complied with the constitution. The shareholder also complained that she is not a director.

Finally, Larry, Curly and the rest of the shareholders dispute Robin’s secure loan to the company. 

The corporate constitution contains the following provisions:

1. There shall be no shares issued without a special resolution of the members.

2. There shall be no directors except Larry, Curly and Moe.

3. Any director can loan money to the corporation and have it secured upon the approval of the Board of Directors.

Robin has asked you for advice on the following matters:

1. Is my share issue valid, given that I have paid for my shares?

2. What are the consequences of my directorship?

Question #2

Additional Facts: 

There are two additional facts to the foregoing scenario:

The government has recently announced the discovery of a COVID vaccine. This discovery is a disaster for 4Eyes. Suddenly, the service will no longer be needed and revenues are expected to fall by 90%. In fact, it looks like the company may become insolvent and have to be put into administration.

Additionally, Robin’s company RA Pty Ltd, owns an office building in Wagga Wagga. She has directed 4Eyes to enter into a lease with RA Pty Ltd for an office at $10,000 per month.   She signed the lease agreement for RA Pty Ltd as well as for 4Eyes signing as “Director” of both companies. She has not disclosed to 4Eyes that she is the sole shareholder and sole director of RA Pty Ltd.  Further, the actual market rent for the building should be $2,000 per month.

Larry recently found out about the lease, that RA Pty Ltd is controlled by Robin and is unhappy. In fact, Larry has persuaded the other two directors, Curly and Moe to reject the lease. 

She now wants the additional issues:

1. In general terms, what will happen to her investments if the company goes into administration. In particular, she wants to know what the difference will be as between her shares and secured debt investments? 

2. Is the lease agreement between 4Eyes and RA Pty Ltd valid?

This Law Assignment has been solved by our Law Experts at My Uni Paper. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+ Students in Australia, UK & US by helping them to score HD in their academics. Our Experts are well trained to follow all marking rubrics & referencing style.

Be it a used or new solution, the quality of the work submitted by our assignment experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There’s one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose a new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction.