hello, please ensure you're using AUSTRALIAN LAW only

please avoid plagiarism; however, if using legislation, that's ok as long as you mention what legislation you're using

thank you so much

Question 1(14 points)

Floss Pty Ltd (Floss) produces cinnamon toothpaste for the Australian market. Sam is the company secretary. Mark, George and Sheeree are the three directors. In 2016, Sam lent money to the company and did not take any formal security. It is now January 2019 and Sam wants the moneyback to pay for his son's engagement party which is coming up. At the January 2019 board meeting, Sam locates the company cheque book and writes himself cheque for repayment of loan without consulting anyone.

A week later the company finance manager Joan peruses the company bank statements and notices cheque is presented in favour of Sam.

In the meantime, Mark and Sheree are approached by the receiver of a rival toothpaste business, Shine Pty Ltd (Shine) and they are asked if they would be interested in purchasing certain assets of Shine, including a state-of-the-art toothpaste mixing machine that the receiver has for sale. Mark and Sheree propose to discuss the purchase of Shine's assets at the next board meeting of Floss, however they feel that it's time they were rewarded for years of dedication to Floss so they intend to set up new company for themselves as the only shareholders and directors. Once set up, this new company will buy Shine's assets.

Required:

Advise Mark, Sheree and Sam of any legal problems under the Corporations Act 2001 (Cth) that they may face from recent actions.