Problem
You are approached by three clients, Misha, Tanya and Irving, who are partners in an IT business that produces software for appliances and for machinery used in factories. They sell software, both on its own and also ready-loaded onto hardware appliances, so their sales include both software and hardware. The business has become successful, so they have been considering whether they should incorporate, but they don't know much about it.
• Part I: You need to explain to the clients the benefits of incorporation, and compare it to their risk exposure while operating as a partnership. You particularly need to address their potential liability to third parties, and the effect of the corporate shield. You should refer to appropriate cases to illustrate your advice. Since the clients are only concerned with their external liabilities, you SHOULD NOT address issues of rights and duties amongst themselves.
• Part II: On hearing your advice, the clients decide to go ahead with incorporation. You need to explain to them how to incorporate and what are the roles of directors and shareholders. DO NOT explain the duties of directors here, since it is explained in the next part.
• Part III: Now you should explain the general law and statutory duties of directors. You should refer to some cases to illustrate the duties. It is NOT REQUIRED to consider insolvent trading here.