Context: Mary, Allan, Bikram are partners of a successful construction business which have been running for over 10 years. Recently the partners have decided to incorporate their business into a company. They aim to gain a listing on the NZX and issue shares to the public to fund their expansion. However, they are aware that as the directors of a company they have duties to run the business in a way that complies with applicable legal requirements. They have read about the collapse of the Mainzeal Group (Mainzeal), a once leading New Zealand property and construction companies, and are concerned that they do not fully understand directors legal responsibilities. Required: Write a report to the partners addressing the following aspect: a) History and context of the Mainzeal group (10 marks) b) What went wrong with the company's business operations (what led to the group's collapse) (10 marks) c) Discuss the liquidation status of Mainzeal Property and Construction Ltd (cite the relevant legislations): i. You should identify the appointed liquidator/s and summarise their most recent liquidation report. Please check the New Zealand Companies Office website for the liquidator's report (5 marks) ii. Describe what is meant by profession, professional and the role played by professional accounting bodies in regulating the accounting profession. (10 marks) d) Discuss the responsibilities that the directors of Mainzeal failed to comply with under the New Zealand Companies Act 1993? (10 marks) e) What defences did the directors present to the courts to counter the claims made by the plaintiff? (20 marks) f) The lessons learnt from the corporate collapse (i.e. what could have been done to prevent the collapse) (10 marks) g) Comment on how the corporate structure can be misused to evade legal obligations. (10 marks) Context: Mary, Allan, Bikram are partners of a successful construction business which have been running for over 10 years. Recently the partners have decided to incorporate their business into a company. They aim to gain a listing on the NZX and issue shares to the public to fund their expansion. However, they are aware that as the directors of a company they have duties to run the business in a way that complies with applicable legal requirements. They have read about the collapse of the Mainzeal Group (Mainzeal), a once leading New Zealand property and construction companies, and are concerned that they do not fully understand directors legal responsibilities. Required: Write a report to the partners addressing the following aspect: a) History and context of the Mainzeal group (10 marks) b) What went wrong with the company's business operations (what led to the group's collapse) (10 marks) c) Discuss the liquidation status of Mainzeal Property and Construction Ltd (cite the relevant legislations): i. You should identify the appointed liquidator/s and summarise their most recent liquidation report. Please check the New Zealand Companies Office website for the liquidator's report (5 marks) ii. Describe what is meant by profession, professional and the role played by professional accounting bodies in regulating the accounting profession. (10 marks) d) Discuss the responsibilities that the directors of Mainzeal failed to comply with under the New Zealand Companies Act 1993? (10 marks) e) What defences did the directors present to the courts to counter the claims made by the plaintiff? (20 marks) f) The lessons learnt from the corporate collapse (i.e. what could have been done to prevent the collapse) (10 marks) g) Comment on how the corporate structure can be misused to evade legal obligations. (10 marks)
