bfa726 - workshop 13 2015

TASMANIAN SCHOOL OF BUSINESS AND ECONOMICS

BFA726 Corporate Law and Regulation

Week 13 – Workshop 13

Corporate Law Problem Solving Revision and Exam Comment

2

BFA726 – Corporate Law & Regulation

1. Corporate law problem solving

2. Simone’s availability3. Exam structure4. Exam topics5. Exam and study tips6. Your legislation

CRICOS Provider Code: 00586B

BFA726 Lecture 13 2015

BFA726 Lecture 13 2015 3

1. Legal Problem Solving – What should you do?

You need to:• Identify understand the

facts• identify the parties• identify the legal

issues• Identify the relevant:-

– Common law rules;– Sections in the

Corporations Act – The supporting

case law

• understand how the common law rules, legislation or case law or law provides support/ clarification and then apply it to the facts you have

• provide advice in a conclusion

• offer some suggestion of chance of success and likely remedy


1. BFA726 Problem Solving – Question 1

• Facts: Fern, Feb and Mary are friends. All have worked in the superannuation industry for over 35 years. They are considering setting up a company but are confused about the different ways a company can enter into a contract and where wondering if all three of them will have to sign every contract or what is the most normal way for companies to enter into contracts with outsiders.

• Required: Fern, Feb and Mary have approached you provide brief advice on the two different ways a company may enter into a written contract. Where you can refer to legislation and case law to illustrate.

• Illustrate your answer by reference to relevant legal principles, cases and, where appropriate, statutory provisions of the Corporations Act 2001 (Cth).


1. BFA726 - Question 1

• Answer:• …………………………………………………………………………………………………

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1. BFA726 Problem Solving – Question 2

• Facts: John is a non-executive director of BBB Ltd and holds 15% of the shares in the company. 80% of shares are owned by Graham. Graham is also the managing director. Recently at a board meeting Graham and John had a disagreement and Graham informs John that he is no longer welcome to attend any board meetings and that he is currently writing a resolution for consideration at the next board meeting that the company buy back all of John’s shares at $5 per share. John paid $15 per share for his shares 12 months ago.

• Required: Prepare a report to assist John on:-– What are the statutory remedies he has as a minority member?– What are the general law remedies he has as a minority

member?– What advantages do statutory remedies have over the general

law remedies for minority members?Where you can refer to legislation and case law to illustrate.


1. BFA726 – Question 2• Answer:• ………………………………………………………………………………………

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1. BFA726 – Question 3

• Spec Pty Ltd (Spec) is a property development company. It owns parcels of rural and semi-rural land in Victoria. Bill owns 80% of the shares in Spec and controls the composition of its board. Last year the company made a small trading loss, but it owns a large area of land with a frontage to the Gold Coast which is valued in the company's balance sheet at $10 million but which is expected to be worth at least $25 million when it is developed as a golf course resort.

• Bill needs cash for another project in which he is involved. He wants the board to revalue the land at $25 million and then to distribute the $15 million “excess” to the shareholders in the form of a dividend.

• Advise the directors of Spec:

a) Whether they can comply with Bill's wishes without breaching the Corporations Act 2001 (Cth);

b) What guidelines should they follow in making their decision?• Illustrate your answer by reference to relevant legal principles, cases and,

where appropriate, statutory provisions of the Corporations Act 2001 (Cth).


1. BFA726 Question 3• Answer:• ……………………………………………………………………………………

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• Facts: John and James wish to set up a company to run a new retail business in Hobart. John is a qualified lawyer and has a Masters in Professional Accounting. James has no formal qualifications but has worked in the retail industry for 20 years

• So that both fully understand the duties of directors imposed by both the Corporations Act and by the common law (including of course the fiduciary duties of directors) please provide a short report on the directors duties and how appropriate disclosure and the business judgment rule does provide some protection to directors, but in some circumstances.

• Illustrate your answer by reference to relevant legal principles, cases and, where appropriate, statutory provisions of the Corporations Act 2001 (Cth).


1. BFA726 Question 4

• Answer:• …………………………………………………………………………………………

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1. BFA726 - Question 5 • You are a registered insolvency practitioner and have been asked to prepare a brief report on :-

– What is meant by the term ‘risk of insolvent trading’?– What are options that may be available for a company facing

financial difficulty?– Should a director of a company take funds from a company bank

account for arrears of salary or sell a company asset to a friend, 3 months before a company is placed into liquation (following an application to a court by an unsecured creditor) – what are those two types of transactions called and what can the liquidator do?

– In a winding up what priority do creditors get paid in and what sections in the Corporations Act (2001) and principles guide liquidators in this regard?

– What can a liquidator do to force company employees and directors to assist him/her in determining the company’s true financial position ?

• Advice sought: Assist by preparing a report answering these questions.• Illustrate your answer by reference to relevant legal principles, cases and, where appropriate,

statutory provisions of the Corporations Act 2001 (Cth).



• Answer:• ……………………………………………………………………………………

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2. Simone’s availability

• The Exam for BFA726 is on 24 October• Simone is available in her office in Room 325 on

the following days next week in her office without appointment: – 19th October – 10.30am to Noon – 20th October – 10am to Noon– 21st October – 10am to Noon– 22nd October – 10am to Noon

• Simone IS NOT AVAILABLE on 23rd October• Also you can contact Simone on email and she

will respond within 24 hours.


3. Exam Structure

• There are two parts to the exam, you must attempt both parts.

• Part A – this is worth 48 marks– Part A contains SEVEN (7) questions– Each question is worth SIXTEEN marks (16) marks– You must answer any THREE (3) questions– All questions carry equal marks

• Part B – this is worth 52 marks– Part B contains FOUR (4) questions– Each question is worth TWENTY SIX marks (26) marks– You must answer any TWO (2) questions


3. Exam Structure - Timing

• The Exam will be marked out of 100 marks• You have three hours – 180 minutes• So for each mark you can spend 1.8 minutes• Each Part A is worth 16 marks• Each Part B is worth 26 marks • So this means roughly:

– You have 29 minutes for each Part A (you must answer three questions – each question is worth 16 marks, = 87 minutes

– You have 46 minutes for each Part B (you must answer two questions – each question is worth 26 marks, so 46 x 2 = 93 minutes


4. Exam Topics – Weeks CoveredWeek Topic Chapter in Text

2 RegistrationConsequences of RegistrationInternal Rules

Chapters 3,4 & 5

3 Management of Companies· Corporate Liability: Contract, Tort and Crime

Chapters 6 & 7

4 Promoters and Pre-Registration Contracts & Membership Chapter 8 & 9

5 MeetingsMembers Rights and Remedies

Chapters 10 & 14

6 & 7 Duties of Directors - Duty of Care, Skill and Negligence, Duty of Good Faith and Proper Purpose, Conflict of Interest & Disclosure

Chapters 11, 12, 13 & 16

9 Dividends Chapters 19

10 Fundraising and Financial Services and Markets Chapters 21 and 22

11 External Administration Chapter 24

5. Exam and study tips

• You need to be able to demonstrate an understanding and be able to apply the law to the specific question that has been set

• Marks will not be given for just writing out large parts out of the Corporations Act, you have that there to assist you know what the law is and use it to answer the questions

• Do not forgot that case law is also part of corporate law

18 BFA726 Lecture 13 2015


• Old exams have been placed on MYLO• Print them out and practice answering the questions

for the topics that you have decided to focus on• Also the workshop questions are good to practice as

well• Do this under exam conditions, in the time you will

have and see how you go, make sure if you are answering a problem solving question you spent at least 40 % of your time applying the law

• Remember you have some cases referred to in the grey text material in your legislation, this may be useful to you.

19 BFA726 Lecture 13 2015


• When preparing for the examination, a recommended study method is to revise the Topics one at a time.

• Use your lecture notes, text book and the prescribed text to assist you. Then test yourself with the tutorial questions or past exam papers relating to that Lecture’s Topic.

• In testing yourself, place yourself under examination conditions. Start your time (a stopwatch is ideal), then prepare an outline/plan of your answer, and then answer the question in the time you could allocate to the question in the examination.


5. Tips on Answering questions Relevant Cases and Statutory

Provisions

• In citing cases for the purposes of the examination, it is sufficient to give the names of the main two (2) parties. It is NOT NECESSARY in the examination to include the year of the case

• As you cannot easily handwrite italics in your handwritten examination answer, you should instead underline the names of parties to cases and statutes, e.g.: Donoghue v. Harbottle ; Corporations Act , ss. 180 and 1324, etc.

• Do not use white out, correction fluid this takes too long !


6. Your legislation

• You can take your copy of the Corporations Act into the exam

• Get to know how to use it• Where are the definitions?• Where are the main sections for each of the

topics you are studying?• What is the relevance of the material in

grey?• Are there any cases in the grey material?• How will you effectively use tabs?



Corporate Law Problem Solving

• We now have time for you to work in groups to answer any of the five questions provided

• I am happy to stay and help groups work on these questions


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bfa726 - workshop 13 2015

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