What is the solution of "TLAW 402 (Assignment Question) December 2013 (AH)" Q1 and Q2 ?
TLAW 402 COMPANY LAW: ASSIGNMENT QUESTION [Session 2, 2014] Total Marks: 30 [answer both questions] Due Date: Thursday 28 August 2014 by 1.00 pm Word Limit: Minimum 1,500 words - Maximum 1,700 words [excludes bibliography] Question 1 [10 Marks] Bob, a sole trader, is the owner of a very successful business called 'Bling Bling' which specialises in custom made jewellery. Bob has insured the business with Luky Charm Ltd against fire, theft and the like in the sum of $5,000,000. Some five years later, Bob decided to conduct the business via a corporate structure. He incorporated a company called 'Bling Bling Pty Ltd' which is validly registered with ASIC. Immediately thereafter, in January 2014, Bob enters into a sale contract with Bling Bling Pty Ltd which purchases the business from him. As consideration for the purchase price, the company issued the following to Bob: a substantial block of shares as fully paid; and debentures for a further substantial sum secured by a charge (security) over all of the company's assets. After incorporation, Bob caused the company to take out workers compensation insurance policy with Safety Ltd. A series of 'bad luck' accidents followed. In February 2014, burglars broke into the premises of 'Bling Bling Pty Ltd' and stole stock valued at $500,000. In March 2014, Bob fell from a ladder in the store while trying to retrieve some stock and injured his back. He has incurred substantial medical costs. As a result of the Global Financial Crisis, business has declined and Bling Bling Pty Ltd is now insolvent and under the care of the liquidator. The liquidator has rejected Bob's claim against Bling Bling Pty Ltd in relation to the enforcement of the charge (security). Safety Ltd, which has underwritten Bling Bling Pty Ltd's worker compensation policy, has rejected Bob's claim for payment of his medical bills. Lucky Charm Ltd has also refused the insurance claim of Bling Bling Pty Ltd to recover the value of the goods stolen. Advise fully, with reference to legal authority, whether Bob can: (a) enforce his charge [security interest] against Bling Bling Pty Ltd; [5 marks] and (b) enforce his claim against Safety Ltd for the payment of his medical bills. [5 marks] AND Question 2 [20 Marks] Chu, a sole trader, has a successful restaurant business in Sydney. He used the profits to buy himself an expensive home in Ashfield, a BMW car and an investment property in Hurstville. Chu wishes to expand his business. His income and his income tax is rising. Chu comes to you advice. Chu wants to know whether he should reconsider the type of business structure he has. Chu has $200,000 dollars for the new business and will need a further $300,000 to open the new yum-cha restaurant in Chatswood. Chu is currently single, but wishes to marry soon and would love to have children. Advise Chu, with reference to the facts above, what type of business structure would best suit his needs. Your answer must offer full reasons for the advice. Your answer must also give full details on the formalities required to implement the advice given. Your answer can be structured in the form of an essay [with the use of headings and sub-headings highly recommend] End of Question. IMPORTANT: 1. Submission Procedure: TOP Office; to be handed to QingQing Ho) 2. Assignment Cover Sheet must be submitted with student signature and with word count 3. Plus Copy of assignment to be lodged at turnitin 4. Late submission will attract penalty (mark deduction of 5 % for each day late) Most Important: Plagiarism is a serious academic offence and can result in failure of this course. Students are expected to submit answers based on individual effort (this is not a group project). Requirements for a pass/good mark: 1. A legal analysis of the question with reference to relevant principles of corporations law (case law) and, where appropriate, relevant statutory provisions of the Corporations Act. 2. Students are expected to reference the relevant chapters in the prescribed textbook and to draw supporting information from there (Hint: read Chapter 5 of the prescribed textbook for the legal issues raised in Question 1; read Chapter 3 of your textbook which deals with the legal issues raised in Question 2). 3. You are strongly advised not to use the internet for resource materials (as it is unnecessary and you run the real risk of drawing on irrelevant information and/or foreign law). The Current Edition of your Prescribed Textbook is more than adequate to answer the questions. 4. Students are expected to footnote references1 and to provide a bibliography.2 5. Marks will be deducted if the answer does not meet the minimum word count - a word count must be indicated on the cover sheet. 6. A good answer will do the following (adopt the following structure) with respect to the question: (a) Identify the material (relevant) facts - and NOT simply repeat the question; (b) Identify the legal issue (or issues); (c) Identify the relevant case law; (d) Apply the legal principles and case law to the given facts; (e) Offer legal reasons (with legal authority) as to whether Lee can enforce the various claims identified in Question 1 (a simply Yes or No answer with personal views is inadequate); (f) Be proof-read to eliminate spelling and grammatical errors; (g) Be referenced, with a bibliography; (h) Meet the minimum word length requirement and (i) Not simply copy/reproduce the textbook (answer must show own understanding) 1 Salomon v Salomon & Co Ltd [1897] AC 22 (hereinafter Salomon's case) discussed in Harris, Hargovan & Adams, Australian Corporate Law (4th ed, LexisNexis, 2013) pp 164-167. 2 Harris, Hargovan & Adams, Australian Corporate Law (4th ed, LexisNexis, 2013)
