INSTRUCTIONS:
This examination carries 50% of the total assessment for this unit; Attempt any FIVE (5) questions from a choice of six (6) questions; All questions are of equal value; Unless otherwise stated assume any company in fact situations in this examination uses the replaceable rules as its constitution; and Importantly give full reasons for your conclusions and support your answers with appropriate legal authority.
2
Question 1.
Giving examples from both a Partnership Act (from a state or territory jurisdiction) and the
Corporations Act 2001 (Cth), explain what is meant at law by apparent or ostensible
authority.
Question 2.
Samuel was a promoter of a company called Edmanuals Pty Ltd. Six months before the
company was registered Samuel signed a contract on behalf of Edmanuals Pty Ltd for
$10,000.00 per month for 6 months for the hire of a 2010 CLS500 Mercedes Benz motor
vehicle from Samuel’s Cars Pty Ltd. Samuel is the sole director and sole shareholder of
Samuel’s Cars Pty Ltd. Edmanuals Pty Ltd does not want to honour the contract. Advise
Edmanuals Pty Ltd.
Question 3. “The law recognises a corporation as a distinct legal entity, having a separate existence and a
corporate personality of its own, quite apart from the members who comprise it.” Discuss
this statement with reference to the main legal consequences both at common law and under
the Corporations Act 2001 (Cth).
Question 4
Maree is an experienced accountant and audits the financial report of IOD Ltd. During the
audit she suspects that a contravention of the Corporations Act 2001 (Cth) has occurred.
What contractual duties does Maree owe IOD Ltd under the common law? What is Maree
required to do if she suspects a contravention of the Corporations Act?
Question 5
Identify and discuss four significant statutory duties that require directors and officers to act
with care, diligence and/or in good faith. In your answer explain the consequences for a
breach of directors’ duties under the Corporations Act. In your answer explain whether the
impact of these statutory duties would be different on directors and/or officers of a small Pty
Ltd, large Pty Ltd or a public company? Why or why not?
Question 6.
Why is Gambotto v WCP (1995) 13 ACLC 342 an important decision?
