Problem-based, case study question.

Helios Pty Ltd, a floristry company engaged in genetically modifying floral species, has recently encountered cash-flow problems. It is a small proprietary company with 25 employees and 5 directors. The directors are also employed by the company as the scientists who work on new flower breeds. Up until recently the business has been quite profitable, with several permutations of flower being generated each year resulting in more than enough funds from the sale of the associated intellectual property rights. Whilst the directors do not want to see the company go under, as this will also result in them being out of work, they have noticed that unless they can secure some finance over the next few months they may be unable to pay their fixed costs, including rent on the company's primary research facility and expensive equipment. Henry, considered by all to be the leading director of the company, approaches you for legal advice regarding what the company can do to generate funds. Being a scientist by profession, he does not want to waste his time or expertise on corporate affairs. He has already asked the company's bank for a roll-over facility to be attached to its running account and the bank has declined. The bank has also warned Henry that if the company does in fact run out of funds, he may be personally liable for the company's debts. Henry's first and foremost concern is his own financial well-being and he does not want to have to pay the company's debts out of his own pockets. The company is his pride and joy, having founded the entity more than 10 years ago, and he has no intention of shutting down his research if he can obtain some short-term funds. Advise Henry of his business prospects as well as the associated insolvency risks.

in this question, you are asked to advise a party to pre-empt anything adverse from happening or to prepare him for his role in the company.

So strictly, the IRAC format may not be suitable for you to use.Instead, you may want to use headings to highlight a particular area you want to advise Henry for exampleSeparate Legal Entity.I would remind you that you are required to advise him sostate the lawfor example for separate legal entity outlining where applicablesections of the Corporations Act, 2001, and case lawand alsoapplyto his case and tell him how it would affect him and the company.

It is up to you how you want to put forward your answer for Part A so the above is just a recommendation.Whatever style you use, just remember to state the law and show how it applies to him and his company.That would constitute your advising Henry.

These are the links :

Cavell, Liam. Banking and corporate law: Tougher laws and more resources signal a new era in ASIC enforcement [online].LSJ: Law Society of NSW Journal, No. 55, May 2019: 84-85. Availability:ISSN: 2203-8906.

"Why not litigate?": The Royal Commission, ASIC and the future of the enforcement pyramid.Australian Business Law ReviewVolume: 47 Issue 4 (2019) ISSN: 0310-1053

Legg, Michael and Speirs, Stephen. Litigation: Why not litigate?: Asic enforcement after the banking royal commission [online].LSJ: Law Society of NSW Journal, No. 54, Apr 2019: 70-73. Availability:ISSN: 2203-8906.

Price, John. The regulator: Righting wrongdoers [online].Company Director, Vol. 35, No. 3, Apr 2019: 26. Availability:ISSN: 0816-5521.

ASIC'snew product intervention powers.ASIC is already flexing its muscle

Australian Banking and Finance Law Bulletin Volume: 35 Issue 6 (2019) ISSN: 1447-137X Harry New, Vince Battaglia

Hanrahan, Pamela.Directors' Counsel: Who will watch the watchmen? (online).COMPANY DIRECTOR,Vol. 35, No. 3, April 2019: 28-29

Availability:ISSN: 0816-5521.

https://financialservices.royalcommission.gov.au/Pages/default.aspx