QUESTION
Robert and Vanessa are ecologists interested in the field of mushrooms. They have recently discovered a new species of mushroom called the "Amanita" which is deep red in colour with white flecks. This mushroom has been classified as neither a plant, nor an animal, but contains unique fungal properties that can be used for women's facial creams to halt the aging process. They want to develop a business venture where they can farm the "Amanita" and market the anti-aging substance to the cosmetic industry. They have considered various forms of organisation through which to conduct their business, including a partnership, a trust or a company.
They have completed a marketing study and have discovered that the cosmetic industry would be highly interested in "Amanita" for women's cosmetics. Together they have $200,000 which they can invest in the business. However, they will require a further $1.3 million to purchase equipment and set up the business. The bank will only lend them $300,000, so they need to consider funding opportunities and the risks associated with each form of business organisation they could use to conduct their business. They would also like to keep their affairs private and confidential and remain in charge of the business venture as much as possible.
If Robert and Vanessa decide to register a proprietary company limited by shares, they would like the company to have a constitution that contains only the following rules:
(i) The company business is to always remain the extraction and sale of the unique fungal properties from "Amanita";
(ii) Bill will be appointed as the company's accountant and will remain the company's accountant until he decides to resign;
(iii) The company's constitution can only be amended if every member agrees; and
(iv) Any contracts over $25,000 require the approval and signature of either Robert or Vanessa.
REQUIRED:
With reference to the Corporations Act 2001 (Cth) and case law, you are required to answer the following questions:
1. Taking into consideration the differences between partnerships, trusts and companies (including different types of companies), advise Robert and Vanessa as to the form of business organisation that you would recommend they should use to conduct this business. Only discuss the main differences that will assist in making your recommendation.
2. If a proprietary company has been registered, discuss separately each of the constitutional rules (i) to (iii) above, indicating whether you consider them to be valid and any likely impact or future consequences that may arise from any of these rules being breached.
NOTE: Discuss each rule in the constitution separately. It is not necessary to use the 4 step process for this part.)
3. Robert and Vanessa have registered a proprietary company and Bill has been appointed as the accountant for the company. Bill has purchased a new $30,000 accounting package without complying with the above constitutional rule (iv). Discuss whether Robert and Vanessa are bound to accept and pay for the software package. In answering this question, discuss how companies are bound in contracts, including the implications of various types of authority given to agents.
GUIDELINES FOR TEST-
When writing your answers for Test 2, you cannot copy word for word from another source. You can paraphrase or summarise ideas or data obtained from another source, so long as you reference the source of your information using the AGLC footnote referencing style. More information can be found on this style from blackboard or the Curtin library web site: www.library.curtin.edu.au.
Please note that plagiarism occurs when work of another person is presented as one's own, without appropriate acknowledgement or referencing. Plagiarism is a serious offence. This unit is ascribed to Turnitin, an electronic plagiarism detection service. Students should be aware that their work will be required to be submitted to this service to check for unacknowledged use of others' work. Please read Test 2 submission process carefully to determine how to submit your test through Turnitin.
The research for legal principles and cases can be restricted to that referred in the prescribed text book, lectures and case studies. You will not be awarded marks for referring to cases or legislation outside these sources.
You should not exceed the word limit stated in the questions. The marks for each part should give an indication of the words that should be allocated for that part. Marks will be deducted for exceeding the word limit.
Attachment:- Sample.rar