Consider financial records and breaches

Jacob and his wife Rachel are the soledirectorsandshareholdersof Tip Trucks Ltd. Jacob drove the only truck while Rachel worked in the office. The revenue income was paid into its business account at ASB bank. Both Jacob and Rachel had bank card access to the company's bank account. Whenever either Jacob or Rachel needed money - they withdrew it from the company's bank account and/or transferred it to their personal bank accounts.Tip Trucks Ltd continued to pay its trade creditors. Rachel kept the records in the bottom drawer of her desk in her office, and whenever a notice came from the IRD, she also filed that in the bottom drawer of her desk. Tip Trunk Ltd had not paid taxes since its incorporation (6 years).

The IRD put the company intoliquidation, and the Court appointed John as the liquidator. The company owed more than $200,000 to IRD. John could not find any reliable financial records, and when he quizzed Jacob and Rachel, they told John that they had only taken director remuneration.

With reference to the Companies Act [1993] advise Jacob and Rachel what the issues are.

Be sure to include reference to the relevant statute and case law

Be sure to include any breaches and defences.

Include recommendations.