I am tasked to write a memorandum to a supervisor based on the below client file extract.

Mr. Lee is a single 50-year-old public servant who wishes to invest his savings of $100,000 by building up a 'blue-chip' share portfolio in relatively safe, well known and respected companies.

Mr. Lee was a keen observer of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in 2019 and has strong views about corporate ethics and the remuneration of directors.

Mr Lee wants to exercise his vote as a shareholder to ensure that company directors are not being overpaid. He is also keen to ensure there is proper corporate governance and the directors are managing the company efficiently and ethically.

Mr Lee is unsure whether he should buy shares in a public company or a proprietary company.He is also unclear about what class of share or shares would best suit his particular investment interests.

Required Questions

1.Should Mr. Lee purchase shares in a public company or a proprietary company? Explain why, using your own words.

10 Marks

2.What class, or classes of shares do you think would be most suitable for our client Mr. Lee? Explain why, using your own words.

10 Marks

Please support your answers to both questions with relevant sections of the Corporations Act 2001 and/or case law.