ASSESSMENT QUESTION: Mary is a nurse at the Perth Public Hospital (PPH). Mary's husband, Wayne considers himself an entrepreneur and is always looking for a business opportunity. Wayne's friend Frank works as a 'Fly-in-fly-out' worker and has found a supplier in Thailand who makes hospital products including face masks and hand sanitiser. Wayne identifies a business opportunity to buy face masks and hand sanitiser from the Thailand supplier that Frank has contacted and sell to hospitals in Perth. Wayne encourages Mary to identify sales opportunities through her hospital contacts. PPH is one of four hospitals in Perth. By the end of 2019 MBS518 2021 Final Assessment 2 Wayne has been able to obtain regular supplies from Thailand and has contracts with three of the four Perth hospitals, including PPH, to supply the face masks and hand sanitiser.

Question 1: Mary, Wayne and Frank decide to set up a partnership. Advise them of what they need to do, and the advantages and disadvantages of this form of business structure. [5 marks]

Question 2: What may be an alternative form of business structure that could be preferred for Mary, Wayne and Frank's business? Justify your recommendation. [5 marks] The business was incorporated on December 2019 as MWF Supplies Pty Ltd. Mary, Wayne and Frank were appointed as directors of the company and had equal shareholdings (33% each). At the commencement of 2020 the world became engulfed in a pandemic, Covid was spreading. MWF Supplies Pty Ltd was able to obtain additional supplies of face masks and hand sanitiser, which the three hospitals required and other organisations, for example retail, were also demanding these items. Sales flourished for MWF Supplies Pty Ltd. Wayne wanted to expand the business and purchase ventilators. Ventilators had become an important hospital product in assisting patients with Covid overseas. Ventilators were expensive and the company needed to obtain additional funds to purchase the Ventilators. Frank's Thailand supplier was able to supply the ventilators, but it was unclear what the demand would be in Perth for ventilators. Mary was concerned about this business venture and did not agree with purchasing the ventilators. Unfortunately at the start of 2020, Mary and Wayne separated and Mary commenced divorce proceedings. Wayne and Frank were concerned that Mary may become difficult to work with and could jeopardise the business, including the contract with PPH and the purchase of the ventilators. They had heard that a local business-person Andrew has MBS518 2021 Final Assessment 3 secured hospital products from China and has entered into an agreement with the Western Australian Government to supply these products. Wayne and Frank are keen to secure contracts for the supply of the ventilators and other hospital products to ensure the success of the company. Wayne's brother Dan has spare money and Wayne and Frank decide to issue shares to Dan (Dan is not appointed as a director of the company). The money could be used to purchase the ventilators, but it also resulted in the shareholders; Mary, Wayne, Frank and Dan each having 25% of the shareholding. Wayne and Frank call a Special General Meeting and together with Dan, pass the following resolutions to modify the constitution: 1. MWF Supplies Pty Ltd will provide any hospital products as deemed suitable by the directors of the company.

2. A director can be removed from office by a majority vote of the other directors. At the next director's meeting Wayne and Frank vote to remove Mary as a director and to confirm the agreement with the Thailand supplier for the purchase of ventilators.

Question 3: Advise MWF Supplies Pty Ltd of the legal issues in this case and if the directors could be in breach of their duties. [15 marks]

Question 4: Advise Mary if she has a legal remedy under the Corporations Act. [15 mark