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Corporations Law : Assignment Sample

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Added on  2021-06-14

Corporations Law : Assignment Sample

   Added on 2021-06-14

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Corporations Law NameInstitutionCourseDate1
Corporations Law : Assignment Sample_1
Question 1 (a)IssueThe issue is to identify if shareholders who are also the directors of a limited company could be liable for the debts incurred when the company becomes insolvent. Also it intends to identify if directors may be personally liable for tax offences committed by the company. Lastly, it intends to identify if a non-executive director who was unaware insolvency is liable for the debts incurred. Relevant LawSection 588G of the Corporations Act 2001A New Tax System (Autralia Business Number) Act 1999.Section 588G(2) of the Corporation Act 2001ApplicationSection 588G of the Corporation Act says that each director has a duty to prevent company from getting involved in insolvent trading and also prevent the company trading in a manner that will lead to its insolvency. If a director is aware that the company will not be able to pay its debts as and when due and still incurred debts, the director will have breached Section 588G of Corporation Act. The director will be personally held responsible for the debt and may be forced to pay its creditors. On the other hand, Section 588G (2) of the Corporations Act states that there is a different tests for knowing the level of awareness of possible insolvency needed before its contravention. The objective component of this section clearly recognizes the difference between2
Corporations Law : Assignment Sample_2
an executive and non-executive directors through the addition of the term ‘in a like position’. The executives are required to remain informed about the state of the general financial affairs and the insolvency of the company than non-executive. Moreover, the Australian Taxation Office may hold the directors personally liable if the company fails to provide certain tax installment deductions. However, it is a defense to liability only if the director can prove that he or she was not in any way knowingly involved in the omission. ConclusionTo conclude with, the ASIC may find the directors of ME Enterprises Pty Ltd liable for breaching Section 588G of the Corporation Act. They may also be held liable by the Australian Taxation because of failing to provide tax installment deductions. However, Liam may be get exempted from some of the liabilities being that he was unaware of the insolvency due to sickness and his position of non-executive. Question 1 (b)IssueThe issue here is to determine the penalties that ASIC may seek from the court if Liam and Peta as the directors of ME Enterprises Pty Ltd have been found liable for having violated Section 588G of the Corporations Act and the A New Tax System (Autralia Business Number) Act 1999. Relevant LawSection 588G(2)A New Tax System Application3
Corporations Law : Assignment Sample_3

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