Reference no: EM132774614
HI6027 Business and Corporate Law - Holmes Institute
Case Studies of Business Law and Business Structures
Purpose
The purpose of the Group Assignment is to provide students with an opportunity to work in a collaborative environment in solving two case problems by citing the relevant legal rules and cases and applying these to the facts of the case.
In this Group Assignments, students are required to:
- Understand the basic principles of Contract Law and the Law of Tort and apply them in business circumstances. (ULO 2)
- Analyse the legal environment in which business structures operate and evaluate their use in a commercial context. (ULO 3)
- Apply correct legal methodology, specifically to apply the IRAC (Issues, Rules
Argument, Conclusion) framework to solve legal problems
The Group Assignment aims to provide students with an opportunity to work in a collaborative environment in solving two case problems by citing the relevant legal rules and cases and applying these to the facts of the case.
Students are to form groups, with a minimum of 2 and a maximum of 4 students per group. The assignment consists of a 2,000-word written report.
Instructions: Please read and re-read carefully to avoid mistakes.
Group Report
1. This group assignment consists of 2 parts. Part A is a question on Contract Law, and Part B is a question involving Business Structures. Both questions must be answered. Each question is worth 20 marks.
2. The total word limit for the group report is 2,000 words (+/- 10% allowed) with each part having a maximum word count of 1,000 words. Word count limits are strictly enforced. A deduction of two
(2) marks will be imposed for every 50 words over the word count for either part of the report. Anything over the word count will not be read by your lecturer.
3. The total word count for the report as well as each part must be clearly written on the cover sheet of the assignment. A paper will not be marked if the word counts are not written on the cover sheet.
Assignment Questions
Part A: Contracts Law Question
• Read the Contracts Law question below.
• In 1,000 words (+/- 10% is allowed), answer your chosen question using the IRAC method.
• Your answer must be supported by relevant principles of Australian law and cases decided by Australian courts (preferably the High Court) and/or scholarly articles. A minimum of 3 genuine and relevant references are required for this part of the report.
• The full citations for all sources cited in your answer must be listed in a Reference list at the end of the Part A question.
• In addition, any online sources cited in your answer and listed in your Reference List must include a valid hyperlink that allows access to the full text of the source.
Wilona was married to Wilbur for 40 years. She was devastated when he passed away. She had been very reliant on him and left all their business matters to him. She had always been a religious person and turned to her faith for solace.
She was visited by her local priest, Father Devout. She talked about her situation with him and concluded that she should sell her matrimonial home and move into a small unit. Father Devout was himself looking for a new home after the church had informed him that it would be selling the bungalow adjacent to the church building in which he currently lived as a cost- cutting exercise. He mentioned this fact in passing and Wilona insisted that she sell her house to him. When he asked how much she would want for the property, she said she had no idea of its worth. However, she had heard a neighbour say that a house in the street had sold for about $200,000, but, because she knew that her house would go to someone deserving, she would sell it to him for $100,000. This was in fact half its true value. She wouldn't take no for an answer and Father Devout knew her to be someone who would obstinately insist on something once her mind was made up.
Wilona needed a bridging loan to purchase her unit. She does not trust banks and instead approached Sly, a fellow parishioner. Sly was a wealthy businessman, who told her he would give her the necessary funds if she signed a receipt for it so he ‘would have something to show the taxman'. In fact, the "receipt" was a basically-worded loan document, which provided that she was liable for interest at twice the rate that she could have obtained from a bank. Wilona signed the document without reading it because she thought Sly, as a fellow churchgoer, was "a good man".
Wilona's son and daughter have just flown in from their respective homes overseas and discovered what Wilona has been doing. They seek your advice on whether she can undo what she has done.
Advise Wilona's children, discussing all available grounds for relief under Australian contract law.
Part B: Business Structures question
• Read the questions below on Business Structures.
• In 1,000 words (+/- 10% is allowed), answer the chosen given question.
• A minimum of 3 genuine and relevant Australian legal references are required for this part of the report. Examples of relevant references for this question include the Corporations Act 2001 (Cth); the Australian and Securities and Investment Commission's (ASIC) website (www.asic.gov.au), the website of the Australian Business Register's (ABR) website (www.abr.gov.au).
• The full citations for all sources cited in your answer must be listed in a Reference list at the end of the Part B question.
• In addition, any online sources cited in your answer and listed in your Reference List must include a valid hyperlink that allows access to the full text of the source.
Congratulations! You have secured a graduate position with a large firm of corporate advisers. Jessica, a partner in the practice, asks you to attend an 8 am meeting on Monday with herself and Julian Harris, a longstanding client of the firm. You will be required to take notes and prepare answers to Julian's queries.
Julian Harris is married to Samantha Patel. They have one child, Pauline, who attends a local private school. Julian is very entrepreneurial and has been running a second-hand and vintage clothing business in Dandenong, Victoria, by himself as a sole trader for the past five years under the business name of Retrofit. A lot of Julian's customers are other businesses, both local and overseas. Turnover was $285 000 in the first year and has now grown to over
$3 million per annum.
The business operates from rented premises, but Julian would prefer to buy a building. Currently, Retrofit employs eight staff. Julian has plans to expand the business further. He also wants to diversify into food and catering in the near to medium term.
Julian's mother, Bev, is a retired accountant and he regularly asks her for advice. Bev suggested recently that Julian should structure his business as a company. Julian is unsure about this. He makes an appointment to see Jessica.
Prior to the meeting, you review Julian's file and note that he and Samantha have the following assets.
• A family home in Hawthorn with a market value of $1.25 million. There is a mortgage on the property of $561,000. The house is owned by Samantha. The house was previously owned by Julian and Samantha, but when Julian started up his business, it was decided to transfer the house solely to Samantha for asset protection reasons.
• A share portfolio. Julian and Samantha jointly own 1000 Telstra shares, which cost them $3.30 per share, and 500 Commonwealth Bank shares, which they bought when they first married. The Commonwealth Bank shares cost them $10.90 per share. The Telstra shares are currently worth $3.09 per share and the Commonwealth Bank shares are worth $61.00 per share. The shares are intended as an investment for
Pauline - they will be given to her when she turns 21. Julian and Samantha also jointly own a portfolio of blue chip Australian shares currently valued at $145,957.
• Two motor vehicles. Samantha owns a BMW Series 7 worth $135 000. Julian owns a VW Transporter Van worth $18,000, which he uses for the business.
• Office furniture and equipment. During the course of the year, Julian bought computers, desks, other office furniture and shelving for the business which cost him approximately $23 000. Their current value in the financial accounts is $8650.
• Superannuation. Julian has $190,568 in superannuation and Samantha has $136,000 in superannuation.
In addition, Samantha works as a sales and marketing manager in the city for a financial services company. She is on a total salary package of $155,000.
At the meeting, Julian hands over last financial year's business results and his draft budget of sales and expenses for the coming financial year. The budget for the new year shows expected sales of $3,764,000 and a net profit of $637,979.
Issues to be considered
During the meeting, Julian has a number of questions relating to important issues surrounding the future of his business. The issues arising include the following.
• What options does Julian have to structure the Retrofit business?
• Julian still wants to run the business - he wants to be in control. How would other business structures differ from just Julian as a sole trader?
• Is Bev correct to suggest that Julian should set up a company to run the business? Why? What are the advantages and disadvantages of the different types of business structures?
Attachment:- Business and Corporate Law.rar