RECENT ASSIGNMENT

Assessment Task 3 - Written Assessment (Individual)
Marks Allocation: 30 marks
Students are required to answer a number of theoretical and problem- solving questions covering the syllabus from weeks 3 and 4. You are required to submit a draft and then a final submission.
The IRAC approach to legal case analysis is mandatory and marks will be allocated according to this method (see marking criteria below).
The written assessment will have a word limit of 2000 words.
Referencing style: APA 7th edition.
Draft submission: due Sunday 13 June 2021 at 2300 AWST (11pm Perth time)
Students will be required to submit their draft written submission online through Turnitin.
No drafts will be accepted after 5 days from the draft due date (that, no drafts will be accepted after 11pm AWST 18 June 2021.
The review of a draft is for your own benefit so that the Unit Coordinator can determine that you are
a) making sufficient progress with your work,
b) that you are “on point” with the law and c) that IRAC is being used correctly. Extensive feedback is not given (that is, the Unit Coordinator is not marking your work and is only giving feedback on the three issues as stated above). Draft feedback will be given promptly for purposes of final submission. Being a draft, it is not expected that your work is complete. Too many students procrastinate on the assignment and then suffer with poor marks because sufficient time has not been devoted to the topics to ensure answers of quality and substance. That is why it is so important to get started immediately and why the assignment is sent at the beginning of the semester. The Unit Coordinator will give any necessary feedback so that you can improve thereby increasing the chances of a better mark.
Final submission: due Sunday 20th June at 2300 AWST (11pm Perth time)
Students are required to submit their final written submission online through Turnitin. A 10% penalty will apply per day, or part thereof, for late final submissions. In the event there are issues with Turnitin, penalties may be reconsidered. Students should ensure they are aware and comply with the requirements of the APA referencing style (recommended formatting, font requirements, etc.). Student will be required to provide a cover page in their Assessment.
Assignment extension of due dates
All written assessments must be submitted on Moodle by the due date and time the assessment is due. Written assessments should be submitted with a cover sheet and in Word format only (unless specified otherwise). Emails and hard copies will not be considered a submission. A duplicate copy of all work submitted must be kept by the student.
Permission to make a late submission of an assignment must be obtained from your unit co-ordinator/ or lecturer. Extension requests for up to 7 days must be submitted in writing to the lecturer before the assessment due date. The Extension of Assignment Due Date Form is available on Moodle. You must complete this form and submit it to the unit co-ordinator or lecturer, with the appropriate evidence, prior to the due date. You must also submit the work you have completed on the written assessment up to the point of asking for an extension. This proves that you have started and made reasonable progress on your assessment rather than procrastinated.
Having ‘work in other units’ will not be accepted as reasonable grounds for granting an extension. Additionally, excuses involving computers or printers will not be accepted as valid reasons for late submission. It is your responsibility to organise your assessments so that all required work is submitted by the due date.
Where your work is submitted after the due date and compassionate or compelling grounds cannot be established, there will be a penalty of 10% of the total weight of the assessment for each day or part thereof (including public holidays and weekend days) the submission is overdue. Late submissions will only be allowed up to 14 days after the original due date (minus the period for an approved extension, where applicable).

Assessment Task 3: Individual Assessment
Marks Available Marks Given
Question 1 Directors’ duties 8
Identification of relevant issue(s)
1
Discussion of the law Relevant to the issue(s)
3
Application & analysis of the law to the facts provided
3
Conclusion
1
Question 2 Directors’ duties 8
Identification of relevant issue(s)
1
Discussion of the law Relevant to the issue(s)
3
Application & analysis of the law to the facts provided
3
Conclusion
1
Question 3 part a) theory question reporting and disclosure 2
Question 3 part b) Members’ remedies 7
Identification of relevant issue
0.5
Discussion of the law Relevant to the issue(s)
3
Application & analysis of the law to the facts provided 3
Conclusion
0.5
Referencing (‘in-text’) and bibliography
Presentation including spelling and grammar 3
2
Question One
Expansion Ltd required additional capital and the company had decided to borrow funds from its bank instead of issuing shares. However, an opportunity arose whereby the required capital could be raised by issuing shares to one of the director’s (Shanili) spouse Simon, who agreed not to sell the shares should a takeover bid ever be made for the company.
REQUIRED
Discuss whether the directors have breached any duty in relation to the share issue, along with any consequences for such a breach. Also describe the correct procedure that the director Shanili, and the company must follow in order to issue the shares to Simon.
As authorities to support your answer, include references to cases and sections of the Corporations Act.
Question Two
Bill is a director of Exotic Ltd, a company without a constitution. Exotic Ltd provides low- cost holidays, operating a resort on a Pacific island. Bill lives in Perth and finds it difficult to attend monthly directors’ meetings on the island. He has missed the last five meetings and also cannot attend the next one, as he has a birthday party in Perth.
Bill believes that it will not matter if he does not attend the meeting because, after missing so many, he is not up to date with the company’s financial position. Bill is unaware that the company has been having financial difficulties for six months and is struggling to pay creditors.
At the board meeting, the other directors decide to change the style of the renovations to a more luxurious standard so that the resort will attract wealthy high spending tourists. Financial plans provided by the company accountant to the directors indicate that this should enable the company to trade out of its financial difficulties. A decision is made to obtain a large loan from Shark Finance Pty Ltd to pay for the more expensive luxury renovations.
A few months after the renovations are completed, the only airline servicing the Pacific island ceases operations due to the high price of fuel caused by an unprecedented lack of supply. Shortly thereafter, Exotic Ltd fails to pay interest due on the Shark Finance Pty Ltd loan and a liquidator is appointed to the company.
REQUIRED:
Has Bill or any of the other directors breached any duties and could they be personally liable to the creditors for such breaches? Discuss any relevant defences that Bill or the other directors might raise.

Question Three (Part a)
Describe two (2) differences in reporting obligations between a public company that is a disclosing entity and a public company that is not a disclosing entity.
1. Companies that are not disclosing entities or companies limited by guarantee
You must prepare annual financial reports in accordance with Chapter 2M of the Corporations Act 2001 (Corporations Act).
These financial reports must be:
• audited
• lodged with ASIC within four months of financial year end
• sent to members by the earlier of four months after year end or 21 days before the next AGM.
2. Companies that are not disclosing entities
A public company that is not a disclosing entity is not required to comply with Part 2M.3 of the Corporations Act if all conditions of ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 are met, and it is also not:
• a borrowing corporation
• the guarantor of such a borrower, or
• a financial services licensee
and it:
• is a wholly-owned entity
• undertook a deed of cross guarantee with every other company in the closed group.
These companies do not have to prepare audited financial statements for lodgement with ASIC or for sending to members.
Reporting obligations for disclosing entities
A ‘disclosing entity’ is defined in section 111AC of the Corporations Act 2001 (Corporations Act). A disclosing entity can include a registered managed investment scheme (registered scheme).
Disclosing entities that are not foreign incorporated or formed outside Australia
A disclosing entity that is not foreign incorporated or formed outside Australia must prepare both:
• annual financial reports
• half-yearly financial reports.
Annual reports
Unless the entity is not a disclosing entity when lodgement is due (see ASIC Corporations (Disclosing Entities) Instrument 2016/190), annual reports must be:
• prepared in accordance with Chapter 2M of the Corporations Act
• audited
• lodged with ASIC within three months of the financial year end
• sent to members by the earlier of four months after the financial year end or 21 days before the next AGM (three months if a registered scheme).
Half-yearly reports
Unless the entity is not a disclosing entity when lodgement is due (section 302 of the Corporations Act) or if the entity’s first financial year lasts for eight months or less (see ASIC Corporations (Disclosing Entities) Instrument 2016/190), half-yearly reports must be:
• prepared in accordance with Chapter 2M of the Corporations Act
• subjected to audit or review
• lodged with ASIC within 75 days of the half-year end.
Half-yearly reports are not required to be sent to members.
Disclosing entities incorporated or formed outside Australia
A disclosing entity incorporated or formed outside Australia does not need to comply with Chapter 2M of the Corporations Act unless it is a registered scheme.
Question Three (Part b)
Hot to Trot Ltd is an unlisted public company that specialises in clothing for the 18–25-year-old female market. Jodie, Alison, and Diane are the only directors and hold 75% of the shares. The other 25% of the shares is held by a large number of shareholders.
Jodie, Alison, and Diane register J.A.D. Fashions Ltd, a company that sells good quality second-hand clothing to the same market and is located next door to Hot to Trot Ltd. They often recommend customers of Hot to Trot Ltd to go next door to buy their clothes at J.A.D. Fashions Ltd instead.
Sharon is a small shareholder in Hot to Trot Ltd and learns of J.A.D. Fashions Ltd. She searches the company records at ASIC and discovers that Jodie, Alison and Diane are the only directors and shareholders of this company. She advises them that Hot to Trot Ltd will sue them for the return of profit that J.A.D. Fashions Ltd has made and that they must stop the business activities of J.A.D. Fashions Ltd immediately as they are breaching their duties to the company.
The directors of Hot to Trot Ltd call a members’ meeting of Hot to Trot Ltd and pass a resolution that the directors can continue to trade in the second- hand market and retain any profit derived.
REQUIRED
Sharon seeks your advice on whether there are any grounds upon which she can take action against the directors for their conduct.