Question 1 - Limited Liability

We are all aware of the benefits of limited liability, what are the undesirable consequences of limited liability and legal personality? How might the direct duty of care (emerging in UK law) address these undesirable consequences? Is this a good solution?

Question 2- Plasto and the Corporate Veil

Plasto Pty Ltd was a small manufacturer of plasterboard. Its shareholders and directors were John and Peter. Many of Plasto Pty Ltd's customers complained about he quality of the plasterboard that Plasto manufactured. The plaster has been falling off the walls and in many cases had to be replaced. Some of Plastos's customers threatened to take legal action against Plasto Pty ltd, alleging their plasterboard breached the guarantee of acceptable quality.

John and Peter were fearful that Plasto Pty Ltd would lose the threatened legal actions and that it did not have enough money to pay the damages claims. John and Peter form a new company named Plasto Australia Pty Ltd and transfer all the assets of Plasto Pty Ltd to it. Plasto Pty Ltd was not in liquidation but was left an empty shell with no money, business or other assets.

Advise the customers whether they can make John, Peter and Plasto Australia Pty Ltd liable for the damages caused by Plasto Pty Ltd.

Question 3 - Eco Online

Mali and Jess love thrifting, they often gift their treasures to friends and family who have encouraged them to consider turning their hobby into a business. The pair want to register a company so that they can start an online store to trade their thrifted finds and turn a profit. They decide to bring their friend Lenny on board because he is "smart with money". Lenny agrees to assist and be part of the business, but he admits he knows little about starting a company so he approaches you for advice.

Explain to Lenny the steps needed to register a company and the considerations he should take into account in helping Mali and Jess create their business "Eco Online".