The client and issues:

BW Enterprises Ltd is a small capital sized company incorporated in Melbourne on 3 February 2000. The directors of the company are:

Brian the CEO,

Gurinder the IT director

Voon-Ling the marketing director

Jose is the CFO and finance director

Swee-Lim is the purchasing director

All are executive directors of the company

All the executive directors own their respective shares in the company via their family trusts. Together they own 65% of the shares equally.

Chiew is a non-executive director who was nominated by the Halliwell Ltd which owns 15% of the shares in BW Enterprises Ltd. Halliwell Ltd owns 15% and the public owns the remaining 20%.

The company has been involved in the manufacture, distribution and installation of solar panels and batteries throughout Australia and New Zealand.

It has developed new technology in relation to the production of solar panels but needs more funding to get it into a commercial stage.

The financial results for the year ended 30 June 2021 show that the company has been profitable since 2015. However it has no income tax liability because of the prior year losses. The CFO Jose anticipates that the losses will be used up by 2022 and that the company will have an income tax liability. The interim financial statements as at 30 April 2022 show the following:

Total assets: $37m

Liabilities: $28m

Net shareholder funds: $9m

The net shareholder funds is made up of:

the issued share capital $12m

accumulated losses: ($3m)

Operating revenue $15m

Operating expenses $12.5m

Due to the issues of COVID during the last 2 years and the current conflict in Ukraine, it has placed stress on the company's financial position and the ability to develop the new technology. Many of the software developers and engineers involved were based in the Ukraine and this has slowed down the development of the new technology.

Brian and Voon-Ling have requested a meeting to discuss several issues that have arisen and would like your advice on the matters plus any other recommendations you as experts may have considered.

Issues:

1. A draft resolution has been prepared by Chiew requesting that as there are retained profits of $9m as per the 30 April 2022 financial accounts a dividend should be paid to the shareholders. Halliwell Ltd have indicated quite strongly they are expecting a return on their investment soon or they may dispose of their shareholding in the company or seek a change of the board of directors to have a majority control of the company.

Questions:

1. identify the legal issues
2. explain the relevant law both the legislation and case law
3. apply the law to the facts and come to a conclusion