Company Law Assignment - Case Study

Added on - 21 Feb 2021

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COMPANY LAW
Table of ContentsCASE STUDY 1..............................................................................................................................3FACTS........................................................................................................................................3ISSUE..........................................................................................................................................3RULES........................................................................................................................................3APPLICATION...........................................................................................................................4LEGAL ADVICE........................................................................................................................5CASE STUDY 2..............................................................................................................................5FACTS........................................................................................................................................5ISSUE..........................................................................................................................................5RULES........................................................................................................................................5APPLICATION...........................................................................................................................6LEGAL ADVICE.......................................................................................................................7REFERENCES................................................................................................................................8
CASE STUDY 1FACTSIn this case study, Mr. Moon who is appointed as liquidator is handling the matters of theSunshine Pty Ltd. According to the instruction of the court, he is liable to follow the dutiesregarding winding up of the company. In this case, sun and ray are the only shareholders anddirectors of the Sunshine Pty Ltd which operates an outdoor cafe in Burwood, Sydney. Theyboth differentiate their duties in the company and also liable to work accordingly to the setduties. As sun is the managing director of the company and in charge of managing the account orany other financial activities and he is solely responsible for all the risk which is associated withit. Ray carriers the duties regarding managing the administrative affairs of the business.ISSUEThe issue arises in respective of payment which is overdue and after getting so manynotification still the payment is not undertaken. In June 2019, Sun receive a message from theGood Food Pty Ltd regarding overdue of any monthly amount. After verifying all thetransaction, sun take this matter very lightly and also it covered that sun is very good inmanaging all the financial activities. Ray check the company computer and examines that thefinancial records are not updated from Sep 2018. In July 2019, Ray uses the company credit cardbut the messages reflect on ATM screen that there is insufficient amount available. In August2019, ray receives a call form bank regarding the amount exceeded as overdraft which is$150000 and for this reason bank is not allowing any more payment to sunshine Pty Ltd.RULESUnder the corporation Act, 2001 it is mainly imposed to company and their directors toperform their duty with proper care and diligences (Liquidation Procedure in Australia,2019).Thus, this act is implemented by the government of Australia in respect of managing the businessentities and also various rules and regulation under which the the company is bound to follow it.In case of matter related to Australian insolvency law, is any company not carry any financialactivity or not dispose of any debts or obligation in such case he is winding up by the orders ofthe court. In case of voluntary winding up by court, there are various factors which are includedasCourt appoint liquidator to dispose of company assets and make payment to creditors.
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