Mohun Sharma, an enterprising student, just invented what he calls the “butter stick”. It looks like a glue stick, only it has butter instead of glue. Mohun believes it will revolutionize the way people have breakfast and that soon, people will say goodbye to knives and hello to his butter stick. The tagline for his invention is: “It’s a glue stick! It’s a glue stick! No, it’s a butter stick!”

Mohun is excited to register a company with ASIC to launch and promote his new invention. He wants close family and friends to be part of the company has investors/shareholders. He wants the company to be called Butter Stick Pty Ltd to remind the world about his flagship product.

Mohun believes that by the end of the 2021 financial year, Butter Stick Pty Ltd will have gross assets of around $5 million, with gross revenues of $10 million, employing 19 full-time staff. Mohun’s business plan shows that at the end of 5 years, his company’s assets would have grown to $15 million with projected revenues of $28 million. In addition, by that time, Mohun believes that his company only needs to have six permanent, full-time employees, with the other 50 staff working only part-time.

Answer the following questions:

(a) Explain what type of company Mohun would apply for registration with ASIC

(b) How that company would be categorized at the end of its first financial year, and 

(c) Whether that company would remain in that same category in five years’ time? 

Answer the following questions relating to company promoters. 

a) Under the law, what are the most important duties of a company promoter? 

b) What are the remedies available to a company if a promoter breaches his or her duties? 

Answer rating: 100% (QA)

a Butter Stick Pty Ltd is a Chemical company Manufacturers use a number of different adhesives depending on if they are making sealants bonding adhesi... View the full answer