Sisters Emily and Kate (first introduced in the analysis task case study) have had a successful 12 months. They have implemented their new software at Kate's hospital, and it has been adopted throughout the network of hospitals in Australia, New Zealand, Singapore and Hong Kong. They have made sufficient profit to buy out their Uncle Tom through fully franked distributions from their company to each other as shareholders. Kate now has $350,000 in her mortgage offset account. Emily has contributed $110,000 to her superannuation with the view to accessing it to purchase her first home. The business structure they established was a trust with a corporate trustee of which both Emily and Kate are directors. Emily and Kate are the beneficiaries of the trust. Kate has established a trust, and that trust will be the beneficiary from the business trust, and Emily is a sole beneficiary of the business trust. The sisters want to expand and realise that they need to employ more people to do that. They have found an empty former grocery store in a neighbourhood centre shopping strip. There is car parking underneath for staff and other shops and services in the centre that would make coming to the office a one-stop place for new staff. You are a fully qualified financial adviser with 10 years' experience. Kate sends you an email asking if you could provide them with advice. She has cc'd Emily into the message. You reply to Kate and Emily that you would be happy to provide them with advice. You are already aware of some of their financial situation, and you customise your email response in the following way: '

Hi Emily and Kate, I'd be happy to discuss your financial situation and options with you. I will need to gather some more information from you both about your current financial circumstances. Knowing your current corporate structure, would you consider setting up a self-managed superannuation fund (SMSF) and using your existing superannuation balances as a deposit for the new office, then borrowing the balance via the SMSF? In any event, lets arrange a time for a zoom meeting and we will get started.'

Notes: You are required to undertake independent research to answer the following questions. Take care to ensure you answer these questions using your own words. Where applicable, your response should relate to the case study details provided and for parts where you utilise other resources to support your answer, ensure you cite and reference these.

(a) Given the content of the email, what two disclosures should you provide to Emily and Kate at this early stage of the advice process? Refer to the appropriate section(s) of the Corporations Act 2001 (Cth) in your answer. (6 marks)

(b) Explain the purpose of each disclosure. (5 marks) (c) What methods can you use to make those disclosures to Emily and Kate? (1 mark)

C) What methods can you use to make those disclosures to Emily and Kate?