Q1) Michael and Janet are the directors of All Electronics Here.All Electronics Here is a company.Michael and Janet were responsible for making the decision to expand the business of All Electronics Here into the video games market.They both voted in favour of the expansion.

At the time the decision was made, Michael was aware that All Electronics Here was having difficulty paying its bills.It had received several overdue notices from its suppliers, it was behind on rental payments, and it also had overdue sums owed to the Australian Taxation Office.Janet was not aware of these issues, as Michael had deliberately concealed them from her.After deciding to expand into the video games market, an expensive advertising campaign was launched, and a new warehouse was purchased in Melbourne for $800,000.The expansion into the video games market was a failure.Incurring these costs has now put All Electronics Here into a disastrous financial position, and it is now completely unable to pay its bills on time.

Explain whether Michael and Janet have breached their duties to prevent insolvent trading under the Corporations Act 2001 (Cth).Make sure that you fully explain your answer, and that you refer to relevant sources of law (cases and legislation).

Q2) After the failure of All Electronics Here, Michael and Janet start up a new business together as a partnership.They are both partners in the business.They run an online store selling household appliances to customers around Australia.Their partnership agreement provides that Michael is responsible for purchasing stock from suppliers, and that Janet is responsible for selling stock to customers via the online store.Michael has no authority under the partnership agreement to sell stock to customers, and Janet has no authority under the partnership agreement to purchase stock from suppliers.

While Janet is processing customer orders in the online store, she sees a wholesale advertisement for coffee machines at a very competitive price.The offer is only open for the next hour, and she is unable to contact Michael.She decides to purchase 100 coffee machines, on behalf of the partnership business, on ordinary credit terms.When Michael later finds out about the purchase, he is very upset and tells Janet that she is solely responsible for the debt.

Explain whether Michael is also responsible for the cost of the coffee machines, according to the law of partnerships.Make sure that you fully explain your answer, and that you refer to relevant sources of law (cases and legislation).