From humble beginnings, James expanded his backyard business in Melbourne to produce and sell mobile water fountains for AFL and Rugby Union football teams in 2014. Due to the success of his product and the fact that he was dealing with very wealthy football clubs, he was advised to form a family company so as to maintain his credibility. To comply with a previous requirement in the Corporations Act (whereby a company requires two directors), he insisted that his wife Megan (a school teacher) become a director. James was not renowned for his accounting skills, and he overlooked the group tax liabilities for the company over the following two years. The case ended up in court, with the Australian Taxation Office claiming that both James and Megan are jointly liable.
Required
a. Do you think James and/or Megan should be liable for overlooking the tax liabilities for the company? Why/why not?
b. What responsibilities do you think James and Megan have as directors of the company?