The three directors of Masks R Us Pty Ltd, successfully negotiate a contract worth $150, 000, on behalf of the company, to supply masks to a large retail chain of stores. Tom and Dic then incorporate a new company, Masks Suppliers Pty Ltd, and cause the new company to perform the supply contact. Harry is unhappy about this development and contacts ASIC.

A) Advise ASIC of its options under the Corporations Act and the legal consequences of those options.

B) Masks R Us Pty Ltd is now trading unprofitably as a result of the actions of Tom and Dic stated above (in question 5). The company now has difficulty in paying its debts and is falling behind in its tax payments to the Australian Taxation Office.

Harry, as a director of Masks R Us Pty Ltd, is concerned about the increasing company debts and the difficulties in the companys cash flow to make timely payments.

You are an accountant. Harry consults you for advice on whether he can be personally liable, in these circumstances, for the companys debts under the Corporations Act.

Advise Harry with reasons for the advice given.

C) Assume a debtor has issued a statutory demand to Mask R Us Pty Ltd for the non-payment of a $10,000 debt.

Explain, with reference to the Corporations Act, the legal options available to the company in responding to the statutory demand and the legal consequences of ignoring the statutory demand?