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SBM3310 Corporations Law - Asia Pacific International College

Assessment : Case Study

Case Study - Scenario based questions

Assessment Description -This is an individual task, and student must complete the task individually. The case study or scenario-based questions will be given in week 3 a case which is like a real-life case which a company may face. Based on multiple legal issues which the company is facing, students have to answer the case-based questions.

Scenario

George, who is a professional engineer, has been highly keen in owning and running his own business. George has attempted to own and run start-up businesses two times without a success. Once George started his own IT company and he was unable to manage the marketing side of the business, the risk management side and the IT aspect of the business altogether. Another time, George joined his two friends from his university time, and they started a partnership business again on IT field. However, as one of the business partners died of cancer, George and the other business partner struggled to continue to run the business, which they finally decided to sell it.

George is convinced that he lacks the skills to run a business by himself, and he is considering buying shares in a company. George is exploring the opportunity of buying a share from Sahara Dimond Wholesale Company. Sahara Dimond Company was established 30 years ago, and it is a Melbourne based wholesale company that sells Dimond directly to the public. Sahara Dimond Wholesale Company is now selling its share to the public.

George would like to have a full understanding of how a company functions and the legal consequences of owning a share. You are required to advise George on the following legal matters.

Scenario -Based Questions

Question 1. George asks you to explain to him what is meant by the term's ‘member' and ‘shareholder', and the different ways in which a person may become a member. He also asks you to explain who may be eligible to become a member, and how many members a company is permitted to have. Finally, George asks: how does a person cease to be a member of a company?

Question 2. After purchasing his shares, George asks you to explain to him what the register of members is, what information is in that register, and whether all companies must keep one. George is quite fascinated by the existence of a register and asks you whether he can inspect the one his details are recorded on and, if so, where can he find it. George confides in you that if he can get access to the personal details of all his company's members, he could then sell that information to commercial call centres and socio-economic survey research companies. Also, George cannot understand why the court has sole power to correct any errors made on entries into the members register. Advise George.

Question 3. After receiving a notice of an annual general meeting of his company, George asks you to explain to him the difference between a general meeting and a board meeting, and what role these two types of meeting have in relation to the corporate governance of his company. George is also puzzled by the term ‘quorum ‘and what it must be for a general meeting and a board meeting. George wishes to become a leader and wants to know about how a person can become the chair of a general meeting or board meeting, and what their role actually is in relation to those meetings. George cannot grasp the difference between voting on a show of hands and voting on a poll. Lastly, George cannot grasp the concept of a ‘proxy', how that person can be appointed and their voting rights at a general meeting. Advise George.

Question 4. After attending his company's annual general meeting, George visits you once again to find out how the business that was transacted at that meeting got recorded, what that record should show, and how George could access that record to see whether it was ‘correct'. George had observed that the notice he had received advising him of his company's annual general meeting had stated that it would commence ‘at 1 pm'. Yet, on the day, the annual general meeting had not commenced until 1.10 pm because the chair had been delayed in traffic while trying to reach the meeting's venue. George surmised that this delay in starting the meeting could constitute a procedural irregularity that could only be rectified by his company conducting the whole annual general meeting again. Advise George.

Question 5. George is well convinced that owning shares is the best way for him to own a business, and he is happy with his decision of buying shares at Sahara Dimond Company. Furthermore, so far, George is happy as to how the business is being run at Sahara. However, he is worried if in case the directors of the company will act against the best interest of the business. Advise George as to how the Directors of the companies are required to act as per the law and any potential solutions the law has if directors fail to act in the best interest of the company.

Attachment:- Corporations Law.rar