Question 1 Situation 1. She arranges with the company from the company account into a personal bank account held by her in her own name. She uses the funds to finalise some outstanding personal debts.Situation 2. As a director, she receives information that the company is in a serious financial position. She arranges to transfer a larger amount of the assets of the company over a new proprietary company that she formed with the intention of caring on the same business.Situation 3. Contrary to a resolution of the Board and notwithstanding established business practice that limits the credit to $20,000 she allows a trade debtor (who has a history of bad debts) to exceed its credit limits by $25,000. The debtor fails to pay the outstanding amount of $45,000. Can she rely on the business judgment rule in this situation? Required: Has she breached any duties under the Corporation Act in the three (3) situations listed above?
Question 1
Situation 1. She arranges with the company from the company account into a personal bank account held by her in her own name. She uses the funds to finalise some outstanding personal debts.
Situation 2. As a director, she receives information that the company is in a serious financial position. She arranges to transfer a larger amount of the assets of the company over a new proprietary company that she formed with the intention of caring on the same business.
Situation 3. Contrary to a resolution of the Board and notwithstanding established business practice that limits the credit to $20,000 she allows a trade debtor (who has a history of
Required: Has she breached any duties under the Corporation Act in the three (3) situations listed above?
Step by step
Solved in 2 steps
