Question One:

What type ofcompanywould be best suited for the following organizations:?

1. A charity raising funds for cancer research.
2. A major domestic soccer federation.
3. Three friends who wish to start a fashion business.
4. Daryl who wants to start a skydiving business by himself.
5. A group of 75 people who have agreed to pool money and invest in the stock market.
6. A mining company that wants to invest in a speculative gold mining venture with its
7. own funds and funds raised from the public.
8. A start-up telecommunications company that needs $1billion for its infrastructure and
9. intends to raise the funds from the public.

Question Two:

The shareholders of Croc Pty Ltd ('"Croc") are Dundee (10 shares), Mick (10 shares), Gus (10 shares) and Sue (10 shares). The directors are Dundee and Mick. Upon registration, Croc adopted a constitution that replaces all the replaceable rules.

Clause 10 of the constitution provides:

10. The maximum number of directors shall be three (3).

Clause 11 of the constitution provides:

11. Dundee shall be a director at all times and cannot be removed by the shareholders or other directors.

Part A

Sue is dissatisfied with the way Dundee and Mick are running the company. She wants to alter clause 10 of the constitution to say that there can be four directors. Can she do this? If so, how?

Part B

Can she amend the constitution to remove clause 11? If this occurred, could Dundee enforce clause 11 pursuant to section 140 of the Corporations Act?

Part C

Gus is concerned that Sue might sell her shares to a competitor. If the competitor owned the shares, Gus is concerned this may adversely impact Croc's business. Gus proposes altering the constitution to provide that shareholders cannot sell their shares to anyone in competition with the company. Would such an alteration be enforceable?

Question Three:

Tory, James and Alex decide to create a company called Little Creations Pty Ltd (Little Creations). Little Creations will operate a business sellinghaute couturebaby clothing. They decide that they will each hold one ordinary share and Tory and James will be directors. Due to her impeccable tastes in infant fashion, Alex is going to be the "Head Designer".

Tory decided she would attend to the registration of Little Creations. While she was waiting to be served at the ASIC office, she started talking to Mia who was waiting to pay some ASIC charges in connection with a company she owned called Swanky Fabrics Pty Ltd (Swanky). Mia told Tory that Swanky sold fabrics and she had some unique fabric which would be perfect for infants' clothing. Coincidently, Mia has a swatch of the fabric with her, which she gave to Tory. Mia said she only had one roll of the fabric left. Tory grabbed a napkin from her handbag and wrote a contract between Swanky and Little Creations, whereby Little Creations agreed to buy the fabric for $20,000.

Tory then proceeded to register the company with a constitution. Among other things, the constitution said that Alex would be Head Designer for 5 years and she could never be removed from that position during the 5-year period. The constitution also provided that Alex had to get board approval if she was going to enter into any contract in excess of $20,000 in her capacity as Head Designer.

After registering the company, Tory showed Alex the fabric she had purchased from Swanky. Alex, being a temperamental designer, went crazy when she saw the swatch. She said the fabric was completely inappropriate for children's' clothing as it was made of flammable material.

Alex stormed out of the building and drove to her friend Sophia's house. Sophia was also a fabric wholesaler. Alex proceeded to buy a roll of different fabric from Sophia for $25,000.

1. Alex continues to have tantrums if fabrics are not correct, the internet is not working, shipments are late etc. Tory and James want to terminate Alex from her position as Head Designer but Alex says they can't because of the constitution. Can Alex enforce the constitution in this respect?
2. Tory no longer wants the fabric from Swanky. Can Swanky enforce the contract against Little Creations? If not, does Swanky have any recourse against anybody?
3. When James and Tory discover the contract with Sophia, they call her and say Little Creations will not be proceeding with the contract as Alex had no authority to enter into the contract. Can Sophia enforce the contract against Little Creations?