Peter and Mary-Jane decide to open a caf in Nedlands named "The Daily Brewery". They wish to run their business under a company structure and be the only directors and members of the company. They would like to keep the affairs of the company as private and confidential as possible, however, they would also like room for potential shareholders to join the business later down the track to help raise capital.

Their friend, Jonah, is studying Company Law at university. He suggests setting up a company with the name "The Daily Brewery Ltd" and states that the best way for the company to raise capital is to raise "subscription" monies.

The company has a constitution which states that Norman Ozbourne, a well-known Perth barista, is appointed Master Coffee Maker for life. Several customers have complained to the directors that they have been suffering from light-headedness and various stomach problems. The directors discover that Norman has not been cleaning the coffee machine with the correct product and is instead using bleach. The directors decide to remove Norman as Master Coffee Maker and find a replacement.

Norman writes to the directors demanding his job back as per the company's constitution. The company tells Norman that he has no contract and that it is at their discretion to remove him. Norman buys some shares in the company and writes again stating that he now has a contract and wants his job back. The company refuses.

Peter and Mary-Jane have come to you for advice.

They would like to know if you agree with Jonah's advice and what the best way to set-up the company is. (5 marks)

They would also like to know whether they are obliged to reinstate Norman as Master Coffee Maker. (5 marks)

A good answer will demonstrate the following qualities:

1. Correct identification of the relevant legal issues;
2. Explanation of relevant case law and legislation;
3. Clear application of the principles arising from case law and legislation to the facts;
4. Appropriate use of sentences, headings, paragraphs and grammar; and
5. Correct referencing of your sources.