QUESTION

Mr Saham, Mr Labur and Mr Stok are the directors ofRisiko Pty Ltd, a company engaged in the business of importing cars to be supplied to the local market.Two years ago, uponMr Labur's advice, the company invested a large sum of its capital into a business portfolio that has a high risk.Mr Laburhad not attended the meeting but signed the requisite documentation agreeing to the expansion of the business and the investment.Mr Saham and Mr Stok voted to proceed with the expansion and the investment. All directors did not seek for a professional advice on the said expansion and investment.

To date, the company has never gained any profit but instead has incurred substantial losses when more capital had to be injected into the high risk business portfolio in order to stabilize it. The company views that the business judgment made based on the advice ofMr Labur was not a good decision.

With reference to the Companies Act 2016 and decided cases, advise the duties and liabilities of all the directors involved.

Suggested Answer Template:

1. Issue

State the issue here ...

1. Whether......?
2. Whether ...?

2. Law

Start your law content here ... a definition perhaps ...

Paragraph two... state the theory/ rule/ explanation about the issue...

Paragraph three.. state the section

Paragraph four ... explain case one

Paragraph five .. explain case two

Paragraph ...

3. Application

Apply the above law - rule and support with section and case(s) to the problem. Quote the relevant law/section/case only. You are acting as a lawyer to give advice about the problem in the question...

4. Conclusion

In short, what is your conclusion ....