The Law Of Business Entities - Law Assignment Help

Assignment Task

This assignment covers:

LO1

Apply knowledge concerning the nature and characteristics of companies, partnerships, trading trusts and sole traders for conducting business

LO2

Interpret the law related to the formation and operation of partnerships or trading trusts

LO3

Demonstrate knowledge of company law including incorporation and their operation

LO4

Demonstrate knowledge of the current Securities Act, Takeover Act, Resource Management Act, or NZX Listing Rules in relation to how it affects listed companies

LO5

Research and analyse the significance of companies in the New Zealand economy with particular focus on statistics including size, composition, survival rates and industry demographics

 

Task 1

Business plan and regulatory controls

AIM: To understand the liability that arises irrespective of, the structures used. This is to understand some of the limitations of legal structures and the wider regulatory framework affecting legal entities.

Required:

A. Identify regulatory controls applying to this business. List five, say why they apply and how they do or could affect the business,

B. Choose TWO of the five in your list above and for these provide a detailed example for each of the application to your business.

The detailed examples MUST be where the principals may incur personal liability (e.g. as offences or damages). . These should NOT be from the Companies Act 1993 or the Partnership Act 2019.

It is helpful to search for government websites relating to running a business and compliance.

 

TASK 2 PARTNERSHIP

1. Interpretation of Partnership Law and application to the business scenario.

· This task requires completion of the table below. The table must be completed.

· The table is a template and you may need to add rows.

· Add footnotes to the cells for additional explanation or to avoid excessive words in the table. Enter a concise statement in the table and expand with a footnote.

The Application to your scenario will require you to add additional facts. Ensure you include sufficient facts in the table/footnotes to show how each cell applies to your business scenario. . Facts need only be brief and reference to key sections is required.

 

Task 3:

Pre-incorporation, Incorporation and structuring and running your business as a company Refer to all sections of the Companies Act 1993 you apply.

Question A

Identify a supply or sales contract appropriate for your business. Assume you have not incorporated the company but wish to have this contract in place as soon as you can as you believe it is good for the business. You will sign this contract alone.

1. Discuss how you will create this contract. Write a very short contract with the parties, the subject matter, price, obligations and signatures clearly showing why this will ultimately be a contract of the company.

2. Describe the steps that must occur for this to be a company contract.

3. Discuss and quantify the liabilities if the process does not proceed as anticipated noting very clearly who will pay.

 

Question B

• Download and complete a set of documents to incorporate the company. (Do not file). Only one example per role [ Roles are the roles in the company] is required. A constitution is not required.

• Discuss your name for the company, whether it will be registered and provide one example of a name that you might want to use that would not be registered explaining why it will not be registered.

• Find Property Space Limited. Trace the ultimate ownership of the company and draw a diagram which shows the shareholding and continue tracing until you find the people who are behind the company.

 

Question C

Assuming you have three people in your business and;

- One person will be an investor who wants first priority to their share of profit and 55% of the shares ahead of the other shareholders.

- One person will hold 20% of the shares.

- One person will hold 25% of the shares.

1. How can this arrangement above be achieved? – There are multiple options. Find one and explain how it achieves the objectives. Do not use a shareholders agreement.

2. Assuming you are the 25% shareholder. In relation to

• The sale of shares
• The issue of new shares
• Control and management of the company
•  

Discuss the risks for you AND how you can have structure the shareholding and shareholders rights to remove or limit these risks. Provide examples for each that are relevant to your business with facts to illustrate the risk and how this is removed or limited.

 

Question D                                

Provide one example for each of the sections below where you, as a director, could be personally liable. Your example should provide facts based on your business that are realistic for the business. This can be based on any business activity.

1. s.135 Companies Act 1993
2. s.136 Companies Act 1993 AND
3. For each of the sections above and the facts you have used provide one example of when s.138 might apply to limit or exclude your liability.

 

The Research Questions

Task 4: Financial Markets and Listing rules

Assume your business has now grown as large as it can in New Zealand and is planning to expand into Australia. This will require substantial funding.

You have an accountant in your business, now operating as a company, who has made revenue projections that indicate an investment of $10M is required.

You believe the best way to achieve this is with an IPO.

Required:

- Create a plan for your business for the IPO

- Identify good governance practices for the process including your team and its skills.

- Discuss potential liability of yourself and your co-directors in taking this action WITH

· An explanation of one case where directors have been held accountable for an IPO, or, for using similar documents for fund raising or other that relates to use of information or actions that might occur with an IPO or fund raising.

· One example of when this could occur. (You may need to invent facts which can be based on the case).

 

Task 5: Importance of the SME

a. Using statistical references discuss the importance of the SME (small to medium enterprise) to the NZ Economy. (this is not limited to your business at this point)

b. Identify the section your business operates in, its size, demographics and survival rates.

c. Discuss the major causes of failure in the sector your business will operate in, and, the survival rates for business of your type.

d. Give your opinion on the statistical risk associated with your business and the most likely 3 causes of failure that you believe could apply to your business.

e. Discuss how the failure of your company could affect creditors of the business – you will need to refer to the role of receivership and liquidation in this part. This is a brief overview only.

f. With reference to the work you have completed above in the company section on director liability for the debts of the company to its trade creditors Give your opinion on whether the possibility of liability of directors is a sufficient deterrent to behaviours that cause losses to creditors and whether you would change the law in this regard to better protect creditors.

NOTE: Where direct statistics are not available in NZ you may use off shore data that is comparable and extrapolate. Be clear if you do this. If in doubt on statistic areas ask you lecturer. This is not a statistics course so only a basic understanding is required. Your lecturer will help with understanding detailed statistical reports as needed.

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