1. Julian is establishing a company to run the business that he previously ran as a sole trader. As his accountant/financial adviser you have told him that he needs to have a rule book. He tells you that he is the sole director shareholder of the company currently. However in 4 weeks time he tells you he wants to make his mother and a staff member fellow directors.

Required:

Please explain to Julian why his company should have a rule book and the purpose of the rule book.