Reference no: EM132648950 , Length: word count:500

GA506 Business and Company Law - Melbourne Institute of Technology

Learning Outcome 1: Identify and describe business law themes and different business structures.

Learning Outcome 2: Recognise contract law requirement.

Learning Outcome 3: Identify relevant corporate law compliance issues.

Learning Outcome 4: Identify relevant case and statute law and apply that law to given problem scenarios.

Learning Outcome 5: Recognise general legal issues which might impact on commercial transactions.

Learning Outcome 6: Identify the benefits and disadvantages of different business entities and structures.

Learning Outcome 7: Work in groups or individually to produce work that properly integrates business law and/or company law requirements or concerns.

Learning Outcome 8: Compose written work and/or formulate strategies about commercial scenarios that demonstrate a practical knowledge of business and/or company law.

Learning Outcome 9: Effectively communicate business law principles to peers, clients and to legal advisers.

You must use the IRAC method to resolve both the scenarios

You are required to complete the following assessment task:

Imagine that after graduating from MIT with your Master of Accounting degree you start your own office as an accountant. Soon after, two of your friends, Santosh and Brian who also studied at MIT approached you to ask if they could share the spare space in your office to see their own clients. Santosh and Brian both are qualified as Financial Adviser. Santosh and Brian initially paid rent to you but when the lease was renewed, you included them in the new lease for the office premises.

You renamed your office as ‘Friends Financial Services (FFS)' and refurbished it at a total cost of $21,000. You, Santosh and Brian contributing equally. You also decided to pool the income from the whole operation and share the pool in the following way:
Santosh 35%,
Brian 25%
Yourself 40%
You and Santosh attend the office fulltime, but Brian attends the office only on Fridays, during the other weekdays he works from home as he has young family.

Over the first two years FFS did very well but for the past year following a renowned chain branded financial service provider setting up a branch close to your office, your business has declined. FFS has now an outstanding debt of $100,000 in the form of rent owed, outstanding utility bills and loans from a bank. You all are now seriously thinking to close down your business.

However, in the meantime you receive a letter from Jenny a client who expressed her disappointment about a delay in providing your professional services. She has also pointed out that while an advertisement of FFS promises to provide fast services by a team of three accountants, only one is a qualified accountant. Jenny has threatened to take legal action against the FFS.

Jing, another of your clients, shares with you that his elderly parents who migrated from China recently and have little English language skills borrowed money from the Super Money Lenders Pty Ltd without his knowledge. Jing thinks that Super Money Lenders has charged an exceptionally high interest on the loan and some terms are very unfair. Jing wants to know if the loan contract be avoided.

Also, Brian who mainly works from home recently sent an email to a local Electronics shop requesting they supply 3 computers and a printer worth $9,000. Brian has not received any reply yet.

Required:

Part a) What business structure you think has been used for the operation of FFS? Justify your answer with knowledge you acquired from the topic "Business Structure". In the event that the business closes down, if Brian and Santosh are financially unable to contribute to repaying the outstanding debts, how much can the creditor recover from you?

Part b) Which legislative provision you think Jenny may rely on to take an action against FFS for the inaccurate advertisement? What may be the consequences if Jenny's action is successful?

Part c) Explain the most appropriate principle of contract law that Jing's parents may rely on to challenge the validity of the loan contract? You are not expected to refer to any statutory law (legislation) in your answer.

Part d) To avoid incurring further liability, what can you do to cancel the order placed by Brian? Would your answer be different if Brian has already received an email from the Electronics shop but has not retrieved the email yet? Refer to the relevant provisions of the Electronic Transactions Act 1999 in your answer.

Note: Need Only Part b). 

Attachment:- Business and Company Law.rar