LAW2460: Law of Investments and Financial Markets - Law Assignment Help

Assignment Task:

Task:

Question 1

 

1. Ann, Ben and Cai are old friends who pool their funds to start a business designing and selling rugs.  Ann creates the designs, Ben arranges the manufacture of the rugs and Cai markets them. Profits are shared equally between the three.

Required:

 

What business structure are Ann, Ben and Cai operating under? Give reasons and refer to relevant legislation and case law in your answer.

                                                                                                                                    [5]

 

2. Jason runs a marriage dating agency where he receives fees in exchange for successfully matching clients.  He has always successfully run the business as a sole trader, but lately his clients have become very demanding and complaints are frequent. Jason fears he may be sued by an unhappy client if he brokers an unsuitable match.

Required:

 

b) Advise Jason as to whether he should adopt a company as a business structure.  Give reasons and refer to relevant legislation and case law in your answer.

                                                                                                                                    [5]

 

Question 2

 

Rod is a shareholder of Snappy Pty Ltd (‘Snappy’). Clause 21A of Snappy’s constitution states that:

 

Snappy will always  buy its fish supplies from Rod.

 

However, Snappy’s board of directors has decided to purchase fish from a cheaper supplier.

 

Further, Rod is unhappy that despite the directors’ actions in paying themselves large bonuses from Snappy’s healthy profits, they have declined to pay dividends to shareholders for the last 5 years.

 

Required:

 

1. Can Rod enforce Clause 21A against Snappy?  Give reasons and refer to relevant legislation and case law in your answer.

[2]

2.  What action can Rod take on account of the board’s refusal to pay dividends?  Give reasons and refer to relevant legislation and case law in your answer.

 

                                                                                                                                    [8]

 

 

Question 3

 

Regal Pty Ltd (‘Regal’) operates a hotel on the shores of Pearly Bay, a coastal resort in Victoria.  Harry and Meghan are the directors of Regal.  The hotel has been struggling financially for some years, but now the increased presence of sharks in the ocean has caused the hotel to lose many bookings.  On 1 May 2019 the directors of Regal realised that it cannot pay its debts.

 

Despite the poor financial position of Regal, Meghan signed a contract on behalf of Regal to re-fit the hotel on 15 May and Harry paid out Lee, one of Regal’s suppliers (who he plays golf with) in full on 1 June 2019, ahead of the other suppliers.

 

Cash flow does not improve – and the court approved an application to wind up Regal on 1 July 2019.  The court appointed a liquidator, Ms Gimlet on 1 August 2019.

 

Required:

 

1. Advise Ms Gimlet of the date of insolvency and whether she can recover any money from Lee.

[4]

2. Advise Ms Gimlet as to whether Harry and Meghan have breached any of their duties as directors and what defences may be available to them.

[6]

Question 4

 

Required:

 

Give brief answers to the following short answer questions.  

• Your answer must not exceed three lines and MUST USE YOUR OWN WORDS. 
• Only the first three lines of your answer will be marked.
• Material that is cut and pasted will be disregarded for marking purposes.

Refer to relevant legislation and case law in your answer where appropriate.

 

 

1. Where do directors source their powers from?                                                                                   [2]
2. What is the process to change a company’s constitution?                                                              [2]
3. What is meant by the ‘corporate veil’?                                                                                                   [2]
4. What is meant by the ‘separation of powers’ in the context of company law?                        [2]

What is a share?                                                                    

 

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