When the new luxury furniture store opens, Oscar realises that he...

When the new luxury furniture store opens, Oscar realises that he cannot do everything by himself as he used to do. He is used to managing the store, warehouse and delivery by himself. Oscar appoints Acer, who is an experienced bookkeeper as the warehouse manager. He also appoints Ben as the office manager and recruit Catherine as a secretary for himself. Acer deals with anything related to furniture ordering such as with the suppliers and the freight companies. He is also to handle all the deliveries. Ben, the office manager deals with staff issues, office procedures and administration issues. He also handles tasks such as going to the bank. Ben has given Michael, an office hand the authority to order stationary from Officeworks, where the company has a credit account. Since, the incorporation of the company, Oscar has acted as the managing director. Even though Joe is also a director, he does not engage in day today management of the company. However, he occasionally, checks the finances of the company. Lily is appointed as a non-executive director even though she has no interest in the furniture business. Ben is an old school friend of Oscar. Oscar trusts Ben and asks him to keep an eye on the company finance as well. He also asks Catherine to prepare paperwork to appoint Ban as a director of the company, effective in three months' time. Looking at the finances, Joe realises they need additional finance. He informs this to Oscar. Oscar asks Ben to go to the bank on behalf of the company to get additional funding of no more than 100.000 as he is busy with other business. Ben goes to CNZ bank and sees the bank manager and tells that Oscar asked him to organise additional finance for the company. Oscar has BEO2006- Corporate Regulations Assessment 2- Written Assessment been a customer of the bank for nearly 20 years and is well known by the manager, Jonas. One day when Oscar and Ben go to the bank they meet Jonas and Oscar introduces Ben to Jonas as the person authorised to handle day today banking transactions such as depositing cash and cheques. Therefore, Jonas assumes Ben has authority to negotiate funding for the company, especially when he says Oscar has asked him to organise additional finance. Joan grants a loan of $150,000 and approves an overdraft of $15,000 up to a maximum of $45,000. The constitution of the company states that any loan over $100,000 must be approved by the board of directors. However, there was no formal meeting of the board of directors to approve the loan. Catherine, leases a new car in the company's name from Elite Cars Ltd at the cost of $10,000. When the representative asked for contact details, Catherine showed her company ID that described her as the "company secretary". Catherine however, does not inform this to the company and uses the vehicle for her own purposes and to drive to work each day. When the first account from Elite Cars arrives, the company refuses to pay saying that the company is not liable for the debt. While reviewing the finances of the company, Joe realises that even though the finance statements prepared by Ben shows a profit of $255,000 there is only $55,000 in the bank account. Joe questions Oscar. Oscar however, believes the business is going well. Oscar meets Christopher and you again and asks the following questions: 1. How can the company be responsible for anything if it is artificial and does things through people? He wants to know whether the company is responsible for the goods ordered by Acer or Michael. (10 marks) 2. Oscar is not happy with the loan of $150,000 and the overdraft. He sees this as too much of a burden. He wants to know the company's liability to BEO2006- Corporate Regulations Assessment 2- Written Assessment the agreements between Ben and ANZ bank. He also wants to know who will be liable if the company defaults the loan repayment. (10 marks) 3. He is disappointed by what Catherine has done. He asks you whether the company must pay for the car rental company. (6 marks) 4. Oscar wants to know whether the company will be liable for any damage caused by a driver of the company while delivering furniture. He says he heard from Joe that a restaurant in Melbourne CBD was fined after a customer was burnt after a waiter spilled hot soup over them. (4 marks) You must clearly explain the legal situation in each of the above circumstances. In your report, make sure you refer and apply the relevant statutory provisions and case law in your report.