Marco is a wine merchant and has until now operated as a sole trader. He is...

 

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Marco is a wine merchant and has until now operated as a sole trader. He is interested in buying his own vineyard in France. However, he has heard that this is a risky business and is very concerned to protect his family from business failure as much as possible. To this end, he decided to form a company. He is the only director and shareholder and the wine business was transferred at full market value (£250,000). Marco taking 10,000 ordinary shares at £1 each, and agreeing to leave the balance outstanding by way of loan, secured by way of fixed and floating charge over the company's premises and stock in the UK. Marco has told all his suppliers that the company is solvent and so they have been happy to continue doing business with him, notwithstanding the change of business medium. In the event that things go wrong in France and that the company fails (1) Advise Marco as to any personal liability he may have to his suppliers (20 marks) (2) Does your advice differ if you learn that Marco knew that the venture in France was likely to fail but he was prepared to take the risk to see if it might work, thinking that he was well protected in any event by the security arrangements he had in place? (20 marks) Total = 40 mark Marco is a wine merchant and has until now operated as a sole trader. He is interested in buying his own vineyard in France. However, he has heard that this is a risky business and is very concerned to protect his family from business failure as much as possible. To this end, he decided to form a company. He is the only director and shareholder and the wine business was transferred at full market value (£250,000). Marco taking 10,000 ordinary shares at £1 each, and agreeing to leave the balance outstanding by way of loan, secured by way of fixed and floating charge over the company's premises and stock in the UK. Marco has told all his suppliers that the company is solvent and so they have been happy to continue doing business with him, notwithstanding the change of business medium. In the event that things go wrong in France and that the company fails (1) Advise Marco as to any personal liability he may have to his suppliers (20 marks) (2) Does your advice differ if you learn that Marco knew that the venture in France was likely to fail but he was prepared to take the risk to see if it might work, thinking that he was well protected in any event by the security arrangements he had in place? (20 marks) Total = 40 mark

Answer rating: 100% (QA)

ANSWERS 1 Frank needs approximately 225000 more life insurance coverage However the reduction in hou... View the full answer