QUESTION ONE- Chapter 7 (no IRAC required)
In order to obtain the funds necessary to expand its business Growth Ltd is to make a $12M share issue. Advise the directors of Growth Ltd over the following matters:
REQUIRED:
(a) Can the funds be raised without a prospectus? (2marks)
(b) If a prospectus is prepared, will the directors be safe from prosecution if they provide to investors everything they know that is relevant about the investment? (1 mark)
(c) If the company issues a prospectus and the directors then become aware that there is a false and misleading statement in it, what alternatives are available to them under the CA? (0.5 marks)
(d) Does the CA provide any protection for directors where funds are raised under a prospectus that contains a misleading statement? (0.5 marks)
QUESTION TWO- Chapter 8 (no IRAC required)
Breakaleg Ltd has had a very successful trading period. The directors decide that the profits should be used to offer to purchase back some of their shares held by the members. The directors wish to undertake two transactions:
1. purchase 12% of the ordinary shares held by Jasline
2. offer all shareholders the opportunity to sell 8% of their ordinary shares to company.
REQUIRED:
(a) In terms of s256 A, describe the obligations of the directors in terms of whether the Corporations Act allows the directors to undertake their plans (1 mark)
(b) Name the type of buy-back relevant to each of the above and briefly detail the procedures to be followed (3 marks).
QUESTION THREE- Chapter 9 (no IRAC required)
Part a)
Damir, who is a member of Secure Locks Pty Ltd (no constitution) wishes to sell (transfer) all his fully- paid shares to Bianca. He and Bianca correctly complete all the relevant paperwork and Bianca sends this paperwork to the company on 25 October 2021.
On 25th November 2021, the directors of Secure Locks Pty Ltd inform Bianca that the transfer of shares has been refused on the basis that she is a bankrupt.
Advise the directors on whether they have acted correctly (3 marks).
Part b)
How would your answer be different if all the facts for Part a) were the same, but Damir sold his shares to Bianca on a partly paid basis? (1 mark).
QUESTION FOUR
Part a) Chapters 13 and 14- (no IRAC required)
After reading chapter 13, research outside the textbook the case of ASIC v Adler and provide a short summary of the duties Rodney Adler breached (2 marks).
After reading chapter 14 and undertaking your research from part a), how do the principles of corporate governance apply to the case of ASIC v Adler? (2 marks)
Part b) Chapter 12 (IRAC required)
At a members’ meeting of Construction Ltd the shareholders passed 2 resolutions, each with a 90% majority. The first was that the company should invest its excess cash in the Hong Kong
stock market and the second was to create a constitution with a clause stating that the company’s activities are to be restricted to real estate development and investments.
At their next monthly board meeting the directors voted not to invest in the Hong Kong stock market. They also decided that the members had no right to create a constitution and restrict the company’s activities, so they would also ignore the second resolution.
REQUIRED:
Are the directors legally required to observe both resolutions of the members in general meeting
In order to obtain the funds necessary to expand its business Growth Ltd is to make a $12M share issue. Advise the directors of Growth Ltd over the following matters:
REQUIRED:
(a) Can the funds be raised without a prospectus? (2marks)
(b) If a prospectus is prepared, will the directors be safe from prosecution if they provide to investors everything they know that is relevant about the investment? (1 mark)
(c) If the company issues a prospectus and the directors then become aware that there is a false and misleading statement in it, what alternatives are available to them under the CA? (0.5 marks)
(d) Does the CA provide any protection for directors where funds are raised under a prospectus that contains a misleading statement? (0.5 marks)
QUESTION TWO- Chapter 8 (no IRAC required)
Breakaleg Ltd has had a very successful trading period. The directors decide that the profits should be used to offer to purchase back some of their shares held by the members. The directors wish to undertake two transactions:
1. purchase 12% of the ordinary shares held by Jasline
2. offer all shareholders the opportunity to sell 8% of their ordinary shares to company.
REQUIRED:
(a) In terms of s256 A, describe the obligations of the directors in terms of whether the Corporations Act allows the directors to undertake their plans (1 mark)
(b) Name the type of buy-back relevant to each of the above and briefly detail the procedures to be followed (3 marks).
QUESTION THREE- Chapter 9 (no IRAC required)
Part a)
Damir, who is a member of Secure Locks Pty Ltd (no constitution) wishes to sell (transfer) all his fully- paid shares to Bianca. He and Bianca correctly complete all the relevant paperwork and Bianca sends this paperwork to the company on 25 October 2021.
On 25th November 2021, the directors of Secure Locks Pty Ltd inform Bianca that the transfer of shares has been refused on the basis that she is a bankrupt.
Advise the directors on whether they have acted correctly (3 marks).
Part b)
How would your answer be different if all the facts for Part a) were the same, but Damir sold his shares to Bianca on a partly paid basis? (1 mark).
QUESTION FOUR
Part a) Chapters 13 and 14- (no IRAC required)
After reading chapter 13, research outside the textbook the case of ASIC v Adler and provide a short summary of the duties Rodney Adler breached (2 marks).
After reading chapter 14 and undertaking your research from part a), how do the principles of corporate governance apply to the case of ASIC v Adler? (2 marks)
Part b) Chapter 12 (IRAC required)
At a members’ meeting of Construction Ltd the shareholders passed 2 resolutions, each with a 90% majority. The first was that the company should invest its excess cash in the Hong Kong
stock market and the second was to create a constitution with a clause stating that the company’s activities are to be restricted to real estate development and investments.
At their next monthly board meeting the directors voted not to invest in the Hong Kong stock market. They also decided that the members had no right to create a constitution and restrict the company’s activities, so they would also ignore the second resolution.
REQUIRED:
Are the directors legally required to observe both resolutions of the members in general meeting
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