Q1

Explorer Pty Ltd (Explorer) was incorporated in 2002 without a constitution.

Explorer was started by the Archer brothers and John Atherton to help people engage in exploring activities.

Over the years the shares have changed hands, but the purpose and constitution have not altered.

In 2021, there are 3 directors, all shareholders: Patrick Logan, Managing Director; Allan Cunningham, Director of Botany; and Matthew Flinders, Director of Sailing.

There are 35 other shareholders, including William Landsborough (William). William comes to you for advice on amending the constitution of Explorer.

William says proudly that he "has 55% of the member vote in the bag and is confident of perhaps 5% more".

William is unhappy how meetings are run and has a long detailed process he wants to insert into the constitution.

He believes that by putting this procedure in the constitution, then if the directors breach the meeting procedure, then members could use the statutory contract to sue directors.

William also wants to empower the company to be able issue fines on directors if they fail to follow the meeting procedure.

Advise William on the legal consequences that arise in the above facts, limiting yourself to content covered in lectures 1, 2, and 3 of semester, tutorials 1, 2 and 3, and HRS chapters 1 through to 6 inclusive.

QUESTION 2

You have been approached by a director of a company trading as "3L Ltd" for short and "Lime Lafter Ltd" in other places.

The business is currently situated near the UQ campus, on the traditional lands of the Turrbal and Jagera peoples.

3L Ltd employs 40 employees

There are 25 shareholders, 15 of whom work in 3L Ltd. The remaining 25 employees are not shareholders.

There are 3 directors, being Allan, Bessy and Charlotte.

3L Ltd has issue consolidated revenue of about $16 million for the financial year ending 2020.

The 3 directors want to raise money via a share issue rather than debt. They want to raise the money to purchase more shares in a company 3L Ltd has an interest in, now called Appleton Pty Ltd.

3L Ltd owns 10% of the shares in Appleton Pty Ltd. Shareholders in Appleton Pty Ltd have offered to sell 3L Ltd a further 70% of the shares in Appleton Pty Ltd.

Appleton Pty Ltd has 40 employees and consolidated revenue of $20 million. The price shares are being offered is exceptionally good.

The directors of 3L Ltd are concerned there might not be enough interest or money if they just approach existing employees and shareholders. Charlotte chats sometimes to a man at the coffee shop while they are waiting for their take-away coffees. She does not know his name but knows he invests in companies. She suggests he might be worth approaching to explore the opportunity.

The directors of 3L Ltd do not want their above steps to alter their type of company.

Advise the directors of 3L Ltd on the legal consequences that arise in the above facts, limiting yourself to content covered in lectures 1, 2, and 3 of the semester, tutorials 1, 2 and 3, and HRS chapters 1 through to 6 inclusive.

According to COMMERCIAL APPLICATIONS OF COMPANY LAW 2020, please provide relevant laws and detailed answers as much as possible