(Solution) Assignment on Business Laws
12 Pages2639 Words32 Views
Added on 2021-06-14
(Solution) Assignment on Business Laws
Added on 2021-06-14
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Running head: BUSINESS LAWSBusiness LawsName of the studentName of the universityAuthor note
1BUSINESS LAWSTable of ContentsIntroduction...........................................................................................................................................2Prospectus Requirements.......................................................................................................................2Forecast.................................................................................................................................................4Advertising............................................................................................................................................4Liability of the involved parties.............................................................................................................5Breach of director duties........................................................................................................................6Remedies...............................................................................................................................................7ASIC powers.........................................................................................................................................7Defences................................................................................................................................................8Conclusion.............................................................................................................................................8Bibliography..........................................................................................................................................9
2BUSINESS LAWSIntroductionAccording to Austin and Ramsay (2014) fundraising is a process through which acompany collect funding from the public to raise its capital and in return provide them equity inthe company1. A public company in Australia has been provided through the provisions of theCorporation Act 2001 (Cth) the powers to raise funds from the public through the issuing ofshare. In order to be entitled to raise funds from the public a company has to be registered withthe Australia Securities Exchange. There are several provisions which have been imposed onsuch companies by both the rules of the ASX and the rules under the corporate legislation. Theserules have to be complied with in order to ensure that the fundraising in legal and there is nopenalties which the company indulging in raising funds or its directors are subjected to2. The purpose of the paper is to analyze the circumstances of a company named Austinretails which have indulged in a process of fundraising. The paper seeks to find out whatprovisions of law have been violated by the company in relation to the process of raising fundsas under the Corporation Act. The paper also seeks to advice the parties associated with thecompany in relation to their liabilities along with any applicable defences. Prospectus RequirementsA prospectus is a document which is used to raise funds from the public. The general andspecific requirement of a prospectus are given under section 710 and 711 of the CA. a fewofferings will not need a prospectus as stated by section 708 of the CA. This document containsinformation relating to the prospects of success of the cause of investment. This is a document on1 Austin R.P. & Ramsay, I., Ford's Principles of Corporations Law, Butterworths, Australia, 16th edition, 2014.2 Lipton, P., and Herzberg, A., Welsh, M, Understanding Company Law, 18 edition Thomson Reuters 2018
3BUSINESS LAWSwhich an investor relies upon to decide whether the investment is feasible or not. It has beenstated by the provision of section 710 of the CA that a prospectus for fundraising has to have allinformation which the investors would require reasonably for making an informed assessment.The prospectus must have information which is to be used for reasonable reliance and trueinformation which is obtained by making of reasonable inquires3. Under section 674 obligations have been imposed on the company to act in accordance with thelisting rules of the ASX for making continuous disclosure in relation to the prospectus. Underthis section the market operator (ASX) has to be notified by a disclosing entity about informationin relation to a particular matter or event. The information has to be provided is not generallyavailable and in information which a reasonable person would think that if provided is going tohave a material effect on the value or price of the entities4. It has been provided under the provisions of section 728 of the Act that securities must not beoffered through a disclosure where there is a statement which is misleading and deceptive and islikely to mislead and deceive in the disclosure document (in this case a prospectus). It is furtherstated by the provisions of section 728(c) that in situation of a new circumstances arising since adisclosure document has been lodged which would be required to be disclosed than suchinformation must also be notified to the market operator5.3Bottomley S, Hall K, Spender P, and Nosworthy B, Contemporary Australian Corporate Law 1st edition 2017Sydney Cambridge 4Harris, J. Hargovan, A. Adams, M., Australian Corporate Law LexisNexis Butterworths 5th edition, 2015.5Parker, Clarke, Veljanovski, Posthouwer, Corporate Law, Palgrave 1st edition 2012
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