1.Alex and Paco recently purchased a block of land in Surfers Paradise for $1 million. They want to develop the land by building an apartment block and selling the apartments at a profit. Unfortunately, Alex and Paco don't have the money to proceed with the development.

Alex and Paco come up with a plan to develop the land whereby they will register a company called Bug Out Ltd. Alex, Paco and their friend Greta will be the directors of Bug Out Ltd. They plan to get investors to buy shares in Bug Ltd for $2 million.

With the proceeds of the share issuance, they will have Bug Out Ltd buy the land from them for $1.5 million. With the remaining $500 000 they plan to build the apartment building.

If Alex and Paco proceed with their plan and register Bug Out Ltd, would they be required to comply with the disclosure requirements in Ch 6D of the Corporations Act in connection with the fundraising they propose?

2.Larissa started a clothing business several years ago called Larissa's Leisure Suits. The business is owned by a company called LLS Ltd. The business is successful and Larissa wants to expand. As she needs additional capital, she wants to raise $5 million by issuing shares. One option Larissa is considering is to offer the shares to a number of institutional investors. An alternative is to float the business; that is, to offer the shares to the public and apply for listing on the ASX. Larissa approaches you for advice on the following matters:

What are the implications under Ch 6D of the Corporations Act of the two fundraising options Larissa is considering?

If a decision is made to carry out a float, what type of disclosure document will be required and what type of information must it contain?

Can Larissa advertise the fact she is raising funds?