Answer the following questions with reference to relevant case laws and sections of the Corporations Act 2010 QUESTION

1 10 MARKS

David and Demi are shareholders of the Youth Accountability Group Pty Ltd (known as YAG). The company buys shares in Australian companies in order to pressure the company to act properly according to community standards. YAG has focused on companies which produce and market tobacco products, particularly Tobacco Products Ltd. Tobacco Products Ltd has been accused of marketing its products to underage smokers, which has resulted in substantial fines for the company. YAG believes that the directors knew of the illegal activities, or at least should have known. The company is refusing to take any action against the directors. David and Demi intend to go to the forthcoming general meeting. They seek your advice on the following:

1. What are the legal rules that govern their right to question the Board on the above matter? 2 marks

2. Can they put a resolution to the meeting condemning the inaction by? the Board? 2 marks

3. Advise whether the directors have breached any of their required directors duties and if so whether they can rely on any defense? 2 marks

4. What other actions might the group be able to undertake in order to have the company and the directors brought to account? 2 marks

5. Can David and Demi bring an action against the managing director if you believe he is in breach of his duty?

2 marks QUESTION 2 10 MARKS

Tina runs a single director proprietary company called Fashion X Pty Ltd.

Select any 5 of the following 6 questions:

1. Discuss the rules that Fashion X must operate under and the powers of James under the Corporations Act. 2 marks

2. Is it possible for this company to make a contract at common law and under the Corporations Act? 2 marks

3. Tina is considering bringing her sister into the company as a shareholder. Explain what difference that will make to the company. 2 marks

4. Tina wants to raise more capital to increase the size of the company and expand its business. What options does Tina have in seeking to raise more funds? 2 marks

5. Explain the implications of Fashion X becoming a public company. 2 marks

6. Does the concept of a company being described as an artificial legal person apply to this scenario? Provide an example of a case where this concept has this concept has been applied? 2 marks