Law of Business Association Assignment
Assignment Question - Must attempt BOTH Questions.
Question 1 - Pat and Helen want to start a business selling company law textbooks. Their business plan shows they will require $150,000 to buy stock and set up a shop but they can only personally put up $100,000. They are thinking of borrowing an additional $50,000 from the bank to start the business. Pat had previously been held responsible for costs incurred by her when acting as a trustee for her family trust when the trust became unable to meet expenses. She has convinced Helen that they should consider the possibilities of conducting their business using either a partnership or a company.
Required:
(i) Advise Pat and Helen about the attributes of the two alternatives.
(ii) Discuss the difference between the liability of a partner for costs incurred by the partnership and by a director for costs incurred on behalf of the company?
Question 2 - Bernard is a scallop fisherman in the coastal waters of NSW. There is limited stock in these waters and as such there is protective legislation to ensure regeneration. The Scallop Fishing and Marketing Act provides for a quota system. Under the quota system, a person must apply for a quota which will permit him or her to catch 60 tonnes of Scallop in a calendar year. The Scallop Marketing Authority will purchase any scallops up to the quota limit for each person.
The Act provides that it is an offence to sell Scallops to catch more than the quota limit. Each offence carries a fine of up to $100,000.
Bernard wishes to make more money from his business. He would like to catch more than 60 tonnes of Scallop this year. His son tells him that if he registers a company he could double his catch or even more. Is he correct?