Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Alex and Brenda are the directors and equal shareholders of AB Web Designs Pty Ltd (ABWD).They want to expand their successful web design business, and

Alex and Brenda are the directors and equal shareholders of AB Web Designs Pty Ltd (ABWD).They want to expand their successful web design business, and they are exploring several ways to achieve their goal.After giving a lot of thought, they conclude that they need to raise funds to buy more spacious premises, powerful computers, outdoor photo-video production equipment, and new editing software licenses.They meet Cash, who is a retired airline captain and is looking for a profitable business in which to invest for a 10 per cent return.After a business meeting between them, Cash comes to you for advice on --

a)the legal advantages and disadvantages if he were to subscribe shares in ABWD rather than lending the money;

b)whether he should subscribe ordinary, preference, fully-paid, partly-paid, cumulative, or non-cumulative shares;

c)if he were to lend them the money and charge them interest instead, what kind of arrangement could he negotiate to maximise the chance of recovering his money in case of ABWD underperforming or defaulting on the loan;

d)the order of priority with respect to other creditors in the event of ABWD's winding up; and

e

0the rights he might enjoy if he subscribes shares or lends the money and, in each case, suffered oppression as a minority shareholder, or tried to avoid a contravention of the Corporations Actthat negatively affects his interests as a creditor.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essential Criminal Law

Authors: Matthew Lippman

3rd Edition

154435598X, 978-1544355986

More Books

Students also viewed these Law questions

Question

How can you listen critically to others public speeches?

Answered: 1 week ago