LAW

1

Southern Cross University

SAMPLE EXAMINATION

UNIT: LAW00004 COMPANY LAW

TIME ALLOWED: Two (2) hours + 10 minutes reading time.

PERMITTED MATERIALS: Open Book Exam All Text Books including any written

materials permitted, Silent Non Programmable Calculator Permitted, Unmarked Calculator

Instruction Booklet Permitted, Electronic Dictionaries & Electronic Devices such as

computers, mobile phones etc are NOT PERMITTED Unmarked, Unhighlighted, Untabbed

Foreign Language Dictionary (Book Form Only) Permitted.

SPECIAL 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.

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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?

………….End of Sample Exam…………..