Cousins Lilly Henty and Samuel Curley desire to launch a business. They have always worked as employees and have never opened much less run any sort of business enterprise in their lives. They want to run a business proposed business by as simply as possible by themselves. In addition, after their business is set up, they do not want the public to easily find out what kind of business they are running. Even though they do not have business experience, they are both proactive people and are committed to make their business a success. In the future, they anticipate that they will want to expand the business and so would need additional capital from outside sources to achieve this. What type or types of business structure would suit them best?

Explain your answer.

Question 2 Kubo Yutaka is an executive director of Intoku Logistics Pty Ltd, an established company founded in Sydney in 1975. The company has 4 members/shareholders (including Yutaka), with each of them owning twenty-five percent of the company shares. According to Intoku's constitution, all loan contract, to be valid, must bear the signature of at least two directors. Yutaka wants to retire in 2021. As he has been with the company since its inception, he believes he is now entitled to a reward for all his years of faithful service. He visits a yacht dealership in Coffs Harbour and orders a boat worth $200,000. Yutaka signs the contract as a director of Intoku Pty Ltd. When the boat is delivered and the dealer sends the invoice to Intoku, the board of directors are livid with anger and refuse to pay for the boat. They also HA3021 Corporations Law Individual Assignment T3 2021 - Part 2 6 want to take legal action against Yutaka. The boat dealer threatens to sue Intoku is the boat is not paid for.


Answer the following questions:

(a) Did Yutaka have authority to sign the contract to buy the boat?

(b) Is Intoku Pty Ltd legally obliged to pay for the boat? (6 marks total [3 marks per question] Maximum 275 words)

Question 3 Mohun Sharma, an enterprising student, just invented what he calls the "butter stick". It looks like a glue stick, only it has butter instead of glue. Mohun believes it will revolutionise the way people have breakfast and that soon, people will say goodbye to knives and hello to his butter stick. The tagline for his invention is: "It's a glue stick! It's a glue stick! No, it's a butter stick!" Mohun is excited to register a company with ASIC to launch and promote his new invention. He wants close family and friends to be part of the company has investors / shareholders. He wants the company to be called Butter Stick Pty Ltd to remind the world about his flagship product.

Mohun believes that by the end of the 2021 financial year, Butter Stick Pty Ltd will have gross assets of around $5 million, with gross revenues of $10 million, employing 19 full-time staff. Mohun's business plan shows that at the end of 5 years, his company's assets would have grown to $15 million with projected revenues of $28 million. In addition, by that time, Mohun believes that his company only needs to have six permanent, full-time employees, with the other 50 staff working only part-time.


Answer the following questions:
a) Explain what type of company Mohun would apply for registration with ASIC

(b) How that company would be categorised at the end of its first financial year,

(c) Whether that company would remain in that same category in five years' time?

 Question 4

Answer the following questions relating to company promoters.

a) Under the law, what are the most important duties of a company promoter?

b) What are the remedies available to a company if a promoter breaches his or her duties?