QUESTION 1) Part a)

(a) In April 2018, Tina and Jean who are sisters, incorporated a shoe company (Tean in the City Pty Ltd "TIC Pty Ltd") that specialised in selling ladies footwear. Tina and Jean were the company's only members and each owned 100 $1 shares. Tina and Jean are the company's only directors. Tina is the Head of Sales and Jean is the head designer.

For the past few months, the company has been experiencing financial difficulties. In July 2020, the company's overdraft with Star Bank Ltd reached its limit of $250,000. In return for increasing the overdraft limit to $300,000 - Star Bank Ltd demanded security over all of the company's assets. Tina and Jean held out hope that the company's financial prospects would improve as it was coming to Spring, and their open toe sandals have previously been a success around this time of year. They decided to try and trade their way out of their financial situation by having a huge sale.

In August 2020, TIC Pty Ltd receives a statutory demand from Heming Textiles Pty Ltd for outstanding invoices dating back to May 2020.

PART (a) : Advise the directors on their current legal situation referring to the Corporations Act 2001 (Cth) and the general law. FOLLOW THE HIRAC METHOD OF LEGAL PROBLEM SOLVING.