Corporations Law HA3021: Tutorial Questions Assignment 2 Analysis

This document presents a comprehensive solution to a Corporations Law assignment, addressing tutorial questions across multiple weeks. It covers key concepts such as director's duties, including scenarios involving the misuse of company funds and breaches of duty related to credit limits. It diff...Read More

Corporation’s law

Contents
Week 6 - Question 1........................................................................................................................3
Scenario 1...............................................................................................................................3
Scenario 2...............................................................................................................................3
Scenario 3...............................................................................................................................3
Week 7 - Question 2........................................................................................................................3
Week 8 - Question 3........................................................................................................................5
Week 9 - Question 4........................................................................................................................5
Week 10 - Question 5......................................................................................................................5
REFERENCES................................................................................................................................6

Week 6 - Question 1
Scenario 1
Pollyster is using company funds to settle her personal debts which are totally illegal in
Australia. As director have no right to use the amount of company in any case except they can
ask for the help or loan for the business owner on an agreement to pay back within specific
period of time. Company funds are mostly use for making acquisition of assets, writing of
company liability, expanding business activity and distributing revenues and profit and making
of reserves for future use (Alexander, 2017).
Scenario 2
In this scenario, she have not make any breach of duty as the main role of Director to
manage and control the company financial condition in productive and effective manner so there
is no serious financial loss. Pollyster coordinates, for the transition of a greater sum of the firm's
profits to a newly designed business entity which it established with the purpose of providing for
much the same firm. This helps her to deal the tough financial situation in more effective manner
resulting in generation of income from other sources that enables to reach the desired results in
respective accounting year.
Scenario 3
In this situation, Pollyster has made a breach of duty by giving excess credit limit to an
incapable or bad debt. As the upper managers of company have already made a fixed credit limit
of bad debt upto $20,000 and she has allowed $25,000 to a debtor which have already failed to
pay the outstanding amount of $45,000 which is totally wrong. This could lead to financial loss
in case if debtor is not able to pay the outstanding amount.
Week 7 - Question 2
Difference between member and shareholder
Basis Member Shareholder
Meaning The authorized person in the
organization is a legal
member whose information is
recorded in the list of
The individual who holds an
equity asset is recognized as
its shareholder.

representatives of a
corporation.
Memorandum The individual who signatures
affiliation agreement mostly
with organization is a
member.
An individual may be just a
shareholder through
submitting the memo
whenever the securities are
allocated for a period.
Liability Members 'obligations are
restricted to the number of
stock they own in the case of a
corporation with equity
capital, whereas in the
situation of a business secured
by guarantee, employees'
responsibility is proportionate
to the number of assurance
they offer.
The liability is greater as
profit margins are depended
upon the company
performance and engagement
of more and more customer.
Eligibility to become a member
1. If an individual conforms to a company's memorandum of understanding, by signing it
they become such a member.
2. Whenever an individual is the sole beneficiary of securities which identity is written
throughout the depository record, therefore they may have become a member.
3. When an individual accepts shares by contract and the contract is reported by the firm,
together through the transferee's identity being entered in the members' list.
4. Whenever an individual earns shares by means of transfer and the organization
documents the transaction together with the identity being registered in the members' list.
5. If an individual decides to accept and compensate for the corporation's qualifying
securities therefore they also becomes a board member in respective firm.
All businesses always have at least one person within their operations. Proprietary businesses
need to have days after the date more than 50 members who are not company staff member.

There really is no cap on a public corporation's number of individuals. ASIC can appeal to the
court to wind up the business if it has no shareholders (Fleischer, 2014).
Caseation member of a company
Four ways for an organization to terminate member status are as follows:
1. Transmission, demise, resignation and dissolution are four different ways of ending a
company's subscription.
2. If all of the assets are transferred to something like a third component by a current owner,
otherwise conversion takes effect. A person's participation of a corporation immediately
terminates when he passes.
3. If an individual agreed to surrender including all his securities to a corporation, this
results in the loss of participation of that entity.
4. It's even a form through restructuring. Number of members of a company must cease
until it is bankrupt. It will occur under the insolvency regulation act.
Week 8 - Question 3
Common administration is an unspoken set of legislation founded on legal precedents. For
rare situations where the result cannot be decided on the basis of current laws or formal codes of
rule, common law guides the judgment taking method to Doug. Supreme Court, though, can opt
to alter and differ from case law whether they are old or if the present case is significantly
different from the preceding. State courts may still opt to reverse the precedent, although this
never happens. Through the other side, statutory law applies to laws which Parliament and Doug
has produced throughout the form of law. There's been a substantial rise in statute provisions in
the twenty centuries; the judiciary seem to have a vital function to play in broadly defining and
administering law and in specific in deciding the application of rule. That really is regardless of
the fact that perhaps the court does not have any parliamentary or communicate representative
democracy authority to always be state legislators.
It was generally assumed common law would apply all across and Ilyych a local practice could
have been demonstrated. This condition contrasted remarkably with all that in France, where a
sovereign controlled a variety of provinces and regions, all with their very own legal laws and
also in Germany and Italy, where separate kingdoms and empires were often regulated through
their own statutes (Norwitz, 2016). As certain choices of Vesna͛’s are focused on prior
assumptions, it is more practical to move through with this method. People know that will

happen; there is a repetition factor everywhere. The method is simpler and much more realistic
as there are no set, lengthy laws but actual problems which have also been addressed.
Rental income is about fixing weaknesses in common law and reducing its harshness. With
the exception of common law that should be applied by all groups of citizens. Under common
rule, the rule became rather strict so if the formalities were incorrect the individual presenting the
argument would lose the lawsuit. For this scenario Zviad, justice most accurately protects the
plaintiffs. The only relief that may be provided under criminal law was 'property damage' this is
a requirement that the offender compensate the complainant an amount of money under
settlement. However, the chancellor created novel solutions that were willing to reimburse the
appellants more thoroughly than the solution of restitution of common law (Yosifon, 2013). The
key fair solutions by Mikhail included injunctions, results relevant, revocation and correction.
Fairness is not a full code of legislation; it simply covers the common law holes and softens the
strict common law regulations.
Week 9 - Question 4
As a Dircotor, Joe will get a corporate deal to purchase back any or more of the stock of the
business. In an equity buy-back plan, if Joe sold company stock back to the corporation, Joe
might create a capital losses or gain. To assess if he have produced a capital profit or a loss, he
equate the profit gains with the investment basis and the expense level. Once Joe start making
the cash flow, the circumstances of the specific purchase-back offer will rely heavily upon. For
e.g., it could be the day you decide to partake in the buy-back, or the moment you approve the
bid, whether it is a contractual invitation to buy-back (Southgate and Glazer, 2012). The profit
gains are calculated as whatever the market valuation of the equity might have been has this buy-
back not existed but never been offered, minus the sum of the dividends received by the buy-
back whether any of the standard procedures implement:
1. During the usual course of operation in a securities exchange the corporation does not
purchase back the assets for example, the firm communicates to creditors agreeing to
redeem their assets (commonly known as 'off-market equity buy-back')
2. The buy-back offer is smaller than what the mutual fund's exchange valuation might have
been has this buy-back not happened and was already suggested.
3. The corporation can supply Joe mostly with market interest in this case, or may have
received a class judgment from us.

4. When the buy-back cost seems to be continuing sharing’s stock valuation could be if the
buy-back had not existed and had been requested, so the cash gain is the sum charged, minus
the dividends received.
Week 10 - Question 5
The conditions for financing and registration that govern Australia's sale of securities are
laid out in Section 6D including its Act. The generic principle is that Flywell Ltd does not make
a shares bid or send a shares offering request document that involves notification to shareholders
until a notification statement (such becomes a prospectus) regarding the bid has been sent to the
Australian Securities and Investments Commission ('ASIC') unless that a bid is exempt without
disclosure. The proposal shall provide this data to the degree that the appropriate people engaged
in the preparing of the financial statement either know the details or by conducting inquiries
would have sufficiently released the information.
The Act carries down a variety of restrictions pertaining to stock sales. Which involve selling
securities in a non-existent entity, selling shares without a defined registration record and most
notably, giving shares underneath a disclosure agreement in which the disclosure document
includes a false or deceptive assertion or where the disclosure document omits information that
was needed to be published. There really is no general divulgation requirement for statements on
bid content. Rather, the Act provides detailed details to be given, such as a summary of the
existence of the shares and a definition of when the funds should be collected (Westaway and
Sampselle, 2012). The prohibition against false or fraudulent claims is especially applicable
when it comes to revelations concerning a body's "possibilities."

REFERENCES
Books and Journals
Alexander, F., 2017. Benefit corporation law and governance: Pursuing profit with purpose.
Berrett-Koehler Publishers.
Fleischer, H., 2014. Bagatellfehler im aktienrechtlichen Beschlussmängelrecht (Rescission Suits
and Minor Defects in Stock Corporation Law: More than a Trifling Concern?). Zeitschrift
für Wirtschaftsrecht (ZIP), 35(4), pp.149-159.
Norwitz, T. S., 2016. Accountability Does Not Require Constant Vulnerability: A Simple But
Necessary Update to the Delaware General Corporation Law. Del. J. Corp. L., 41, p.105.
Southgate, R. W. and Glazer, D. W., 2012. Massachusetts Corporation Law & Practice. Aspen
Publishers Online.
Westaway, K. and Sampselle, D., 2012. The benefit corporation: An economic analysis with
recommendations to courts, boards, and legislatures. Emory LJ, 62, p.999.
Yosifon, D. G., 2013. The law of corporate purpose. Berkeley Bus. LJ, 10, p.181.