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Book/movie review
22/08/2022
Question One: 10% 500 words Answers must be supported by case and statute references.
Jack, Jill and Max are the owners of a very successful business selling trucks. They have been in business for
only 12 months and have not organised a formal business structure. The business is growing rapidly and they
want to update their business structure to a more appropriate structure. They seek the advice from you (a
corporate adviser). You advise that they have a number of options all of which have advantages and
disadvantages.
What would be your recommendations to them and why?
What factors would influence your advice? Be sure to discuss the legal liability of the participants in the
business.
Question two: 15% 1000 words Answers must be supported by case and statute references.
Marty is the only director of Child Toys Supreme Pty Ltd (Child Toys) whichmakes and sells cheap children’s
toys in Australia. The company has a salesperson, Betty. Betty has promised retailer customers that the toys
have no harmful plastic chemicals in the toys and this is not true. The retailer customers lose sales when the
truth comes out about the toys chemical elements. A child is seriously injured because of the harmful
chemicals in the toys.
For the past five years Charles has been the Operations Manager for the company. Due to his senior position
Charles knows the identity and requirements of the companys major clients.
In March this year Charles decides to retire. As part of his employment contract with the company Charles has
agreed not to compete against the company for two years.
In June this year Charles and his wife, May, decide to start a business selling childrens toys in competition
with Child Toys Pty. Ltd. May forms a company to run this new business, Better Toys Pty. Ltd. May is the sole
director and May and Charles are the sole shareholders in the new company. May and Charles approach
customers of Child Toys Pty. Ltd offering to sell toys.
What types of corporate liability can Child Toys Pty Ltd be exposed to because of Bettys actions?
How can Child Toys Pty Ltd take possible legal action against Charles because of his actions?
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