Reference no: EM133352919
Ricky, Miriam and Ashwan have known each other for ten years, having met at University. They plan to go into business together. Hence, they are planning to set up Wild Wilderness Pty Ltd, a wilderness camping and expedition business.
However, they have just seen an online ad that there is a well-known national camping chain, Outback Starry Nights Ltd (OSN) which has gone into liquidation. The Liquidator of OSN has advertised a range of tents and camping gear for sale. The retail price would usually be $74,000.00, but it can be purchased for just $16,000.00 if they act fast. They will need to make this purchase before they register the company. Miriam has just inherited sufficient cash.
Ricky's cousin, Ella is an experienced entrepreneur. She wants to be involved as a mentor to the business.
When the company Wild Wilderness Pty Ltd is formed, Ricky, Miriam and Ashwan want to ensure that they have equal shareholdings, and that they keep it that way 'in perpetuity, if possible.' As such, they also want to control who becomes into the business as a new shareholder. They will each be directors.
They have come to Delaney Williams for legal advice on the following issues:
1. How can Ricky, Miriam and Ashwan ensure they have equal shares in the company, and that they keep it that way?
2. How can Ricky, Miriam and Ashwan best control who becomes a shareholder of Wild Wilderness Pty Ltd?
3. What are the relevant issues and risks for Miriam and the three would-be entrepreneurs of entering into the contract with OSN (in Liquidation)?
4. What are the relevant legal issues and risks if Ella is involved in the business, and takes a 'hands-on' approach?