Assessment 2 Information

Subject Code: ACC204

Subject Name: Corporations Law
Assessment Title: Written Individual
Assessment Type: Two problem-based questions
Word Limit Approximately 500 words each
Weighting: 30%
Total Marks: 30
Due Date: Monday of Week 10 at 15:55pm AEST via Turnitin

Assessment Description
.

• 1000 word (+/- 10%) assessment.

• Two problem-based questions, approximately 500 words each answer. The questions will cover
topics from weeks 4-8.

• This assessment is worth 30% of the course overall marks. See attached Rubric for guidance.

• Due via Turn-it-in, in week 10, Monday 21 May 2018 at 15.55pm AEST.

• You are to use IRAC in analysing and structuring your answer.

• You MUST cite relevant law in your assessment.

• You must adhere to KBS plagiarism rules. Please refer to these rules on the KBS website.

• Your use of proper grammar, spelling, punctuation and expression WILL be taken into
consideration. If you need assistance please see student services at your local campus.

What is NOT required?

• A bibliography or referencing list is not required.

• A contents page is not required.

COMMONWEALTH OF AUSTRALIA Copyright Regulations 1969

This material has been reproduced and communicated to you by or on behalf of Kaplan Business School pursuant to Part VB of the Copyright Act 1968 (‘Act’). The material
in this communication may be subject to copyright under the Act. Any further reproduction or communication of this material by you may be the subject of copyright protection
under the Act. Kaplan Business School is a part of Kaplan Inc., a leading global provider of educational services. Kaplan Business School Pty Ltd ABN 86 098 181 947 is a
registered higher education provider CRICOS Provider Code 02426B.

Assessment Information
Question One

You are a senior analyst working for the Australian Securities and Investments Commission (ASIC).
Part of your role involves investigating possible breaches of directors’ duties, and you have been
made aware of ME Enterprises Pty Ltd.

Liam and Peta are the shareholders and directors of ME Enterprises Pty Ltd.

Peta is actively involved in the day-to-day running of the company. She spends most of her time
marketing and growing the business. She relies on the company’s employees to pay creditors on time.
Liam is a non-executive director. Every quarter Liam and Peta meet to review the financial position of
the company. A simple balance sheet is prepared by an employee but Liam and Peter generally don’t
ask any questions about the contents of the balance sheet.

In May 2017, Peta started receiving angry calls from her suppliers claiming they had not been paid.
She instructed her staff to prioritise paying the suppliers that were critical to the business, and delay
paying those that were not. In June 2017, ME Enterprises Pty Ltd received a notice from the Australian
Taxation Office demanding payment of unpaid company taxes. However, Liam and Peta did not pay
the outstanding taxes and made no changes to company expenditure. ME Enterprises Pty Ltd
continued to operate until the end of June 2017. The balance sheet prepared for the end of June 2017
showed that current liabilities exceeded current assets.

You discover that Liam was unaware of these events occurring in May and June 2017 because he had
been diagnosed with cancer and was undergoing treatment at the time.

REQUIRED:

a) With reference to relevant provisions of the Corporations Act, and relevant case law, advise your
manager about whether there are grounds for ASIC to bring civil or criminal action against Liam
and Peta. Do not consider action under section 180 of the Corporations Act.

(10 marks)

b) If ASIC’s prosecutions team decides to pursue action against Liam and Peta, what penalties could
ASIC seek from the court?
(5 marks)

COMMONWEALTH OF AUSTRALIA Copyright Regulations 1969

This material has been reproduced and communicated to you by or on behalf of Kaplan Business School pursuant to Part VB of the Copyright Act 1968 (‘Act’). The material
in this communication may be subject to copyright under the Act. Any further reproduction or communication of this material by you may be the subject of copyright protection
under the Act. Kaplan Business School is a part of Kaplan Inc., a leading global provider of educational services. Kaplan Business School Pty Ltd ABN 86 098 181 947 is a
registered higher education provider CRICOS Provider Code 02426B.

Assessment Information
Question Two

Alexandra, James and Simone are the directors and shareholders of a data storage solutions
company called CloudTech Pty Ltd (CloudTech).

Alexandra wants the business to take a new direction – innovation in the music industry. Gnosis
Records recently put out a new project to public tender, dealing with music files for a new streaming
service. In a meeting of the directors in February 2018, James and Simone resolved that CloudTech
should not submit a bid because streaming music was a new industry neither of them knew anything
about and they were already having trouble serving their existing clients.

Later in February 2018, Alexandra decided to incorporate another company, Banger Pty Ltd (Banger).
Alexandra is the sole director and shareholder. Banger submitted a bid to Gnosis Records, which was
ultimately successful in securing a $5 million contract over 5 years. The estimated profit over the life of
the contract is $1.8 million.

In April 2018, Alexandra realised that she could offer CloudTech’s clients a better service with the
innovative solutions developed at Banger. One night, after the other directors and staff had gone
home, she downloaded CloudTech’s complete client list. The next day she resigned as a director of
CloudTech.

Alexandra used the client list to contact CloudTech’s clients, but none of them agreed to engage
Banger. James and Simone have found out about Alexandra’s attempts to lure CloudTech’s clients
and about Banger’s $5 million contract with Gnosis Records. James and Simone are extremely
unhappy with Alexandra.

REQUIRED:

Advise CloudTech as to whether it can take any action against Alexandra in relation to:

a) the contract between Gnosis Records and Banger.

(7.5 marks)

b) Alexandra’s use of CloudTech’s client list.

(7.5 marks)

COMMONWEALTH OF AUSTRALIA Copyright Regulations 1969

This material has been reproduced and communicated to you by or on behalf of Kaplan Business School pursuant to Part VB of the Copyright Act 1968 (‘Act’). The material
in this communication may be subject to copyright under the Act. Any further reproduction or communication of this material by you may be the subject of copyright protection
under the Act. Kaplan Business School is a part of Kaplan Inc., a leading global provider of educational services. Kaplan Business School Pty Ltd ABN 86 098 181 947 is a
registered higher education provider CRICOS Provider Code 02426B.

Assessment Information
Assessment Marking Rubric

Learning Outcomes Level 1 Level 2 Level 3 Level 4 Level 5

(Fail) (Pass) (Credit) (Distinction) (High Distinction)
1. Develop an understanding of Inadequate or Demonstrates Demonstrates Demonstrates a Demonstrates a
the relationship between the insufficient sufficient accurate well-developed sophisticated
law, corporations and legal understanding. but limited and clear understanding of under-standing of
regulation in commerce. Superficial and understanding. understanding the topic. Identifies the topic. Provides
2. Explore various legislative general. Does Does not include in adequate detail. key issues and a logical and
provisions and relevant case not identify adequate detail. Identifies key rules, explains the comprehensive
law in relation to the broad relevant issues Demonstrates issues and applies application to the view of the issues
areas of Corporation Law. and apply identification of the rules in the context raised by the
3. Explain the roles and properly in the issues, and basic context. persuasively. question.
responsibilities of the directors context. application of the
and officers of the corporate rules in the
structure, the extent of their context.
accountability to various
stakeholders and the ethical
framework under which they
operate.

COMMONWEALTH OF AUSTRALIA Copyright Regulations 1969

This material has been reproduced and communicated to you by or on behalf of Kaplan Business School pursuant to Part VB of the Copyright Act 1968 (‘Act’). The material in this communication may be subject to copyright under the Act. Any further
reproduction or communication of this material by you may be the subject of copyright protection under the Act. Kaplan Business School is a part of Kaplan Inc., a leading global provider of educational services. Kaplan Business School Pty Ltd ABN 86
098 181 947 is a registered higher education provider CRICOS Provider Code 02426B.