CORPORATE STRUCTURES IN PRACTICE
Semester 1, 2018
- Due Date: Friday, 11 May 2018, by 4:00pm
- Word Limit: 2,000 words (10% margin)
- Total marks possible: 30 marks (30% of total assessment)
- Mode of submission: Turnitin via Canvas (electronic)
- Front page: Front Page Insert: (located on Canvas)
- Style of submission: Report style (headings, sub-headings, bullet-points)
- Submission presentation: Font size: 11 point / Line spacing: 1.5
- Citation (sections to be cited in the text of the assignment, not in footnotes):
• Cases: full case citation (e.g. Salomon v Salomon & Co Ltd  AC 22) first after which an abbreviation may be used (e.g. Salomon’s case) – in footnotes
• Sections: section number and any subsection in bold (e.g. s 198D(1)(a))
• Footnotes and bibliography are required – referencing in accordance with the Australian Guide to Legal Citation (AGLC) – refer to link provided below
EXECUTIVE REPORT MUST BE SUBMITTED BY 4:00PM ON FRIDAY, 11 MAY 2018
ASSIGNMENT INBOX IS LOCATED ON CANVAS UNDER ASSIGNMENTS IN ASSESSMENT 2: EXECUTIVE REPORT
PENALTIES APPLY FOR FAILURE TO COMPLY WITH INSTRUCTIONS AND RULES
- Assignment rules:
• The due date and time for submission of the assignment will be strictly applied. The assignment must be electronically submitted via Turnitin on Canvas by 4:00pm on Friday, 11 May 2018. Refer to Section 2 below for information about electronic submission. Leave plenty of time to submit – it is most unwise to commence submitting at 5 minutes before the due time – and it is most unprofessional, not to mention costly, to be late! Indeed, there is no rule against submitting early.
• Assignments that are submitted late, without an extension or special consideration, will incur a penalty of a 10% deduction of the total mark from the mark awarded for each day, or part thereof, that the assignment is submitted after the due date and time (i.e. a deduction of 3 marks from the mark awarded for each day, or part thereof, that the assignment is late). In the interests of fairness and equity for all students, no assignment can be accepted after the closing date of Friday, 18 May 2018.
• The word limit = 2,000 words with a 10% margin, that is, the maximum word limit = 2,200 words, and will be strictly enforced. Students who exceed the maximum word limit will incur a penalty of a 10% deduction of the total mark from the mark awarded for each 10%, or part thereof, in excess of the limit (i.e. a deduction of 3 marks from the mark awarded for every 200 words, or part thereof, in excess of the maximum word limit). The word limit / maximum word limit includes all material in the body of the assignment – it does not include the bibliography and footnotes. The 10% margin (i.e. up to 200 words beyond the word limit) is available only to avoid any necessity to compress or reduce the submission to fit within 2,000 words provided that the excess is no more than 200 words.
• Appropriateness of assignment substance and presentation, including expression, citation, layout, style, proof reading, referencing, and compliance with the rules and instructions are taken into account when awarding marks. Any deficiencies in these respects may result in a deduction of marks and referral to the Director of Academic Appeals for investigation.
• The Assignment is to be completed as a Group of 3 students (unless otherwise approved by the Unit Co-ordinator) all of whom must be enrolled in any Stream provided that all students in the group have the same Lecturer. All students must be in groups – any student not in a group must notify their Lecturer immediately (otherwise, a mark of 0 (zero) will be recorded for this assessment).
• Each member of the group is taken to agree to be bound by the single mark awarded for the submission and is responsible for:
• the timely submission of the assignment,
• the assignment substance and presentation (i.e. overall content),
• any plagiarism or other academic offence affecting the submission, and
• ensuring the fair contribution of effort by each member of the group
• Ensure that you retain a secure copy of your submitted assignment.
• Any applications for special consideration must be made to Student Services (not to the Unit Co-ordinator) – refer to the Unit of Study Outline for details.
- Electronic Submission – Turnitin
• The Assignment Inbox for Turnitin is located under Assignments in Assessment 2: Executive Report on Canvas.
• Be certain to follow these instructions to ensure that your assignment is correctly submitted by the due date (penalties apply for late submission).
• The assignment must be submitted to Turnitin with a file name comprised of the submitter’s details as follows:
• SID (submitting student): ######### (the student listed as # 1 on the Front Page Insert)
• The Unit of Study Code: CLAW6002
• Assessment Name: Assignment
• Semester: 2018 S1
For example – if an SID is 123456789, then the file name will be (no spaces):
• The “Front Page Insert”, located under Assignments in Assessment 2: Executive Report on Canvas, is to be inserted on the front page of the submission in accordance with the Front Page Insert instructions (no cover-sheets are to be used) – any failure to properly complete the Front Page Insert will result in the submitter being required to submit a properly completed Front Page Insert before the assignment will be marked (this may cause the release of the result for the submission to be delayed). Ensure that your assignment commences on the page immediately after the Front Page Insert – which may open with a title page if you wish (feel free to be creative).
• In accordance with the Anonymous Marking Policy, student names must not appear anywhere on the submission.
• The Turnitin submission process involves 2 steps that must be completed by the submitting student:
- Uploading the submission, and
- Confirming the submission
• Upon a successful submission to Turnitin, the submitting student will receive a notification confirming that the submission has been successful.
• If you do not receive that notification, then your submission has not been successful.
• In the unlikely event that your submission has not been successful (Turnitin is more than capable of processing the submissions), the status of your assignment will appear to the Unit Co-ordinator as “no submission” and late penalties will apply that can result in your mark being reduced to 0.
• Therefore, if your submission has not been successful, email the Unit Co-ordinator immediately attaching a copy of the assignment and promptly contact ICT for assistance in submitting the assignment (your Turnitin submission log will be examined in the resolution process) – the only submission that can be marked is one that has been submitted via Turnitin.
- Content, Style and Layout
• Your assignment must be printed in 11 point size font and with 1.5 line spacing and a sufficient right-hand margin (no more than 3cm) for marker’s comments (no margin = no comments).
• As the submission is an Executive Report, you are encouraged to use headings, sub-headings and bullet points or numbered points where appropriate – this will enhance the structure of your assignment thereby making it clearer to read and comprehend – beneficial both for markers and for clients (as well as for colleagues).
• Responses must be labelled as per question numbers and must appear in that same order.
• While the assignment is not set as a research assessment, secondary sources in addition to the Textbook and the annotations in the Legislation may be used (and, if used, then must be cited in footnotes and listed in the bibliography).
• Footnotes are to be used for referencing cases and other resources throughout the assignment – failure to do so may result in a loss of marks.
• A bibliography must be included at the end of your assignment – failure to do so may result in a loss of marks.
• All referencing is to be in accordance with the Australian Guide to Legal Citation (AGLC) for which the Quick Guide will be sufficient:
• AGLC – Quick Guide: http://www.law.unimelb.edu.au/mulr/submissions/quick-aglc
• It is suggested that you mention the relevance of the Corporations Act 2001 (Cth) in a brief introduction (executive summary) to the Executive Report and attach to that mention of the Act a footnote to the following effect:
Unless otherwise stated, all legislative provisions cited in this Report are sections of the Corporations Act 2001 (Cth).
Thereafter, you need only cite sections by stating the relevant section number and sub-section (e.g. s 198D(1)(a)) in the text of the submission – do not attach a footnote to any section cited (unless the section is from an Act other than the Corporations Act 2001 (Cth) or you wish to add a comment about the section).
COMPLIANCE WITH RELEVANT UNIVERSITY POLICIES, INSTRUCTIONS AND RULES, AND THE UNIT OF STUDY OUTLINE IS MANDATORY AND WILL BE STRICTLY ENFORCED.
Executive Report – Scenario
It was a bright and sunny autumn morning at Petals Nursery, nestled next door to the tranquil Ku-ring-gai National Park just north of Sydney. A steady rain had fallen throughout the night and the sun was beginning to take a faint autumn chill off the refreshed and glistening plant life that adorned the terraced landscape.
Having admired the stupendous blooms of a myriad of camellia trees displayed at Petals entrance, Joe set off for his daily rounds of the estate. “Yes”, he smiled to himself, “soon all this land will be ours.”. What he actually meant was that Petals Nursery Pty Ltd currently is in negotiations with the landlord to purchase the land upon which the nursery stands and has done so for the last 10 years under a now expiring lease. Joe, as a director and the majority shareholder, manages Petals on a daily basis. Petals uses the replaceable rules and does not use a company seal.
No sooner had Joe commenced his tour of the property when Betty, Joe’s wife and a director of Petals, called out to him saying that an urgent email had just been received – an email that was about to change everything!
Grabbing the email off the front desk, Joe stared in disbelief as the future he was so joyously contemplating not moments ago began to crumble before his eyes. The email read:
We thank Petals Nursery Pty Ltd for being such a good tenant over the past 10 years and for your proposal to purchase the land currently under the expiring lease for $5,000,000. Unexpectedly, another prospective purchaser has emerged with a proposal higher than that proposed by Petals.
As the landlord is a company, we, as its directors, must act in its best interests and so are bound favourably to consider the higher price that now has been proposed.
If Petals wishes to increase its proposed price, then please advise us of that price within 28 days of the date of this email.
Board of Directors
Northern Land Holdings Ltd
Joe was determined that Petals was going to be the next owner of the land if it was the last thing he ever did. So, Joe immediately called an EGM of the company. Given the urgency of the meeting, and as all 42 members of the company agreed to the shortening of the notice period, the EGM was held 5 days later.
Joe called the meeting to order and was elected chair by the members, all of whom were in attendance. “We, as members of Petals, face a crisis!”, he exclaimed, and he proceeded to apprise them of the company’s challenge regarding the purchase of the land. Not surprisingly, everyone was surprised – shocked even – and, after looking at each other for answers that were not there, all eyes turned to Joe.
“As I see it,” Joe began, “we must choose 1 of 2 options: either to let the land go to another purchaser, who may or may not grant Petals a lease over the land, or to engage in corporate fundraising to raise sufficient equity finance to offer a higher price for the land that, hopefully, will beat the offer made by the competing prospective purchaser.”.
The members voted unanimously for the option to raise equity finance (debt finance was not an option as the directors wished to avoid the company being too highly geared). Accordingly, a board meeting was called for the following day and the directors resolved that Petals would issue a total of 200,000 ordinary shares at $10 each. Just in case the issue was not fully subscribed by the existing members, Joe organised a placement of Petals shares with Warren, a wealthy business acquaintance who always was interested in a good investment.
Ultimately, the equity finance was raised, with the help of the placement of shares with Warren, and Petals proudly submitted a further offer for the purchase of the land which was accepted by the vendor landlord. Joe’s dream for Petals would come true.
Now that the purchase of the land was settled, the board of Petals resolved to engage in a program of expansion using the money that remained from the fundraising after the purchase of the land. This expansion involved the construction of 10 new greenhouses and a large storage facility for garden supplies and vehicles as well as a fleet of 8 new tip-trucks from Tip Top Trucks Pty Ltd for the delivery of products to customers, both commercial and retail. Joe took responsibility for the construction project and Larry, the company secretary, undertook to acquire the tip-trucks for the company. Also, now that Petals ownes the land that is its principal place of business, the board instructed Larry to change the company’s registered office address from Petals’ accountants to the nursery’s location. This Larry did, thinking that s 142(2) of the Corporations Act required that the notice of change of address of the registered office must be lodged with ASIC not later than 28 business days after the date on which the change occurs. Accordingly, to be within time, Larry lodged the notice in the prescribed form 26 business days after that date.
The new contractor selected to construct the greenhouses and the storage facility, Power Plant Constructions Ltd, sent its sales manager, Rick, to meet with Joe on site to commence negotiations for the construction contract. Joe explained to Rick that, as he has many tasks to complete in the daily management of Petals, Bob, the general manager of Petals, will negotiate and sign the contract. However, part way through the negotiations, Bob was required to attend the World Nursery Expo in Provence, France, leading a delegation including 4 of Petals’ employees starting next week for 1 month. So, Bob advised Rick that Samantha, one of Petals’ project managers, would take over from him in relation to the contract. The task of arranging the registration for the Expo as well as the travel and accommodation bookings was handled by Larry through Petals’ travel agent, Wayward Travel Pty Ltd.
Checking that he could still see the forest through the trees, Joe observed a shiny black limousine gracefully drawing up to Petals’ entrance. After coming to a gentle halt, the chauffeur leapt out and raced around to the rear passenger door which he opened with all the bearing of a presidential guard. “Mr Mayor!”, cried Joe, “To what do I owe this honour?”. The Mayor of the local township of Loveland had called personally to advise Joe that Petals has been successful in its tender to provide plants and garden supplies for all the public parks in and around the township. Congratulating Joe, the Mayor advised that the Operations Department of Loveland Council would contact Joe in due course regarding the details of all the items to be supplied by Petals under the contract.
The Operations Department soon provided the order list and instructions to Joe. Those instructions included, among other things, a requirement for sun-tolerant plants to be installed in all the new open garden beds and for shade-tolerant plants under all the large trees in the parks. Joe directed the work under this contract to commence straight away.
Over the next few months, however, the plants failed to thrive, and it was discovered that Petals’ employees wrongly had installed the shade-tolerant plants in the sun and the sun-tolerant plants in the shade. To make matters worse, a new apprentice gardener on the Council’s gardening team accidentally added poison instead of fertiliser into the parks’ watering systems which resulted in all the plants being destroyed. Loveland Council promptly sued Petals for its loss.
Issues and Questions
In a recent meeting of the Board of Directors of Petals, a resolution is passed that your group of business consultants has been delegated power under s 198D(1)(d) to prepare an Executive Report for the Board detailing your findings as to whether or not Petals Pty Ltd has any legal liability in relation to:
- the share placement with Warren [5 marks]
- the contract with Power Plant Constructions Ltd [5 marks]
- the contract with Tip Top Trucks Pty Ltd [5 marks]
- the contract with Wayward Travel Pty Ltd [5 marks]
- the claim by Loveland Council [5 marks]
- the lodgement with ASIC of the notice of change of registered office address [5 marks]
END OF ASSIGNMENT SCENARIO AND QUESTIONS