1) Michelle and her husband Mike plan to set up a small caf under the name Em and Emz Caf. They register a company MM Enterprises Pty Ltd with Michelle and Mike as its directors. The shares in the company are held by Michelle and Mike and their two teenage children. After the companys formation the following have happened:

MM Enterprises Pty Ltd enters into a lease for a new premises for the business;

MM Enterprises Pty Ltd borrow $ 20,000 from Biggbank to fund their business. The loan is secured through personal guarantees by Michelle and Mike;

MM Enterprises Pty Ltd purchase equipment for their caf and pay 30% deposit with the balance payable over 24 months.

After a year of operation, the caf business is struggling and MM Enterprises Pty Ltd are falling behind due payments. Will the shareholders be personally liable to the lessor, Biggbank and the sellers of the caf equipment?

2) Plasto Pty Ltd was a small manufacturer of plasterboard. Its shareholders and directors were John and Peter. Many of Plasto Pty Ltds customers complained about the quality of the plasterboard that Plasto manufactured. The plaster has been falling off the walls and in many cases had to be replaced. Some of Plastos customers threatened to take legal action against Plasto Pty Ltd. John and Peter were fearful that Plasto will lose the threatened legal actions and that it did not have enough money to pay the damages claims. They therefore decided to form a new company, Plasto Australia Pty Ltd and proceed to transfer all assets of Plasto Pty Ltd to the new company and continue to trade under the new company. Plasto Pty Ltd was not in liquidation but was left an empty shell with no money, business or other assets. Advise the customers whether they can make John, Peter and Plasto Australia Pty Ltd liable for the damages caused by Plasto Pty Ltd.