Question 1: Joelle, Lee and Lim form a rock band called The Dash. The Dash becomes very successful and in order to better protect their assets, the band members decide to incorporate a company to own all of The Dash's intellectual property. Joelle, Lee and Lim allot themselves 1,000 shares each, and each becomes a director of their new company, The Dash Pty Ltd. The band members remunerate themselves mainly through dividends. They do not bother paying themselves separate directors' fees. The band continues to thrive, and the three band members decide to hire a fourth band member, Sid. Sid insists that as a fellow member of The Dash he should have an equal say in management, so the other band members appoint him as a director and also allocate to him 500 shares. After about 6 months it becomes clear that the three founding members have made a huge mistake in hiring Sid. He is rude and difficult to work with. Joelle, Lee and Lim ask Sid to resign, but he refuses to do so. Under clause 73 of the constitution: 73.(1) The company may by ordinary resolution remove any director before the expiration of his or her period of office, and may by an ordinary resolution appoint another person in place of the removed director. The three founders vote to remove Sid as a director based on the above rule. They then cut The Dash Pty Ltd's dividend and start taking most of their compensation by way of directors' fees. They refuse to replace Sid's income with a regular salary. Sid still will not quit. Finally, Joelle, Lee and Lim incorporate a second company, BAD Pty Ltd, without including Sid. They then inform Sid that The Dash Pty Ltd will be selling its main asset its intellectual property rights to BAD Pty Ltd for $10. BAD Pte Ltd will not be offering shares to Sid; nor will it employ him on salary. As The Dash Pty Ltd will no longer have any valuable assets, it will not be in a position to pay dividends. Accordingly, Sid will have no income. Sid says that he will vote against the sale, but he is outnumbered three to one. At this point, Sid no longer wants to work with the other three band members, but he feels like he should receive some compensation for effectively being fired. Required: 1. Have the directors Joelle, Lee and Lim breached any of their duties as a director of Dash Pty Ltd. 2. Does Sid have any remedies under common law or the Corporations Act?

Question 2: Mei, Wang and Ali are the only shareholders of Futong Pty Ltd. They each own 30 shares in the company. Wang and Ali are the only directors of the company. There was a dispute between the three of them. Wang and Ali want to change the company's constitution to prevent Mei from ever being a director. To do this Wang and Ali come up with a plan to pass a resolution of the directors to allow the company to issue 100 shares to Ding their friend for $100,000. Ding does not like Mei and the company does need extra cash to complete capital works in the company. REQUIRED: 1. Advise Wang and Ali if they have complied with their duties to the company by doing what is proposed. 2. What can Mei do about the proposed action by the Board?

Question 3: Luis is the managing director of Toys Pty Ltd. The company sells toy dolls called 'Cute Kids'. The dolls are not selling well and the company is running low on funds. To remedy the situation, Luis on behalf of the company obtains an unsecured loan of $1 million from Cash Converters Ltd. The interest rate is 9.8% as it is unsecured. Luis thinks that the company will be able to pay the loan back because it is nearing the end of the year and his projections suggest the company will sell lots of dolls around Christmas. Unfortunately, things don't go as expected and Luis doesn't sell as many dolls as he anticipated. It is now January 2024 a slow period for selling dolls. They are not a big seller in Chinese New Year. Luis is aware of s s238 and s 239 of the IRDA and doesn't want to breach them. He hires Sherman & Dandy Accountants and Advisers to prepare a solvency report. The report shows that Toys Pty Ltd has net assets and, based on projections, can pay its debts when they fall due. Based on the report, Luis has the company enter into a contract to purchase $10 million worth of material for doll manufacturing. He did not read the report or ask questions about it but just accepted it. One of the minority shareholders is not happy about the company entering into this $10 million contract. Required: 1. It transpires that Sherman & Dandy's report was incorrect, and Toys Pty Ltd is placed into liquidation. Does Luis have any liability under the Corporations Act? 2. Has Luis breached any of his other duties to the company. 3. Can the minority shareholder take any action against the directors or the company to prevent them entering into the $10 million contract?