Question
Chevin is a sole proprietor registering a new company and is about to transfer her business into that company. Several interested investors are willing to
Chevin is a sole proprietor registering a new company and is about to transfer her business into that company. Several interested investors are willing to put money into the company in exchange for shares - what are Chevin's duties as a promoter to those investors? Which one of the following is correct?
a. | Chevin has a duty to disclose any interests she may have to ASIC and hence any profits she makes from the transfer of property to the new company has to be disclosed to the corporate regulator; ASIC may then question the new members to see if there are any issues with the transfer. | |
b. | Chevin has no particular duties to the new investors other than to ensure they are issued shares in exchange for their investment in the new company. | |
c. | Chevin must ensure that she discloses the value of any property she transfers into the company, and any profits she has made in the process. The disclosure must be made to the investors or an appropriate representative of the new shareholders. | |
d. | Chevin must ensure that the company holds a meeting after registration at which point she will ask to be elected as director; she must at that meeting disclose to the members the number of shares she holds. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started