WENTWORTH INSTITUTE OF HIGHER EDUCATION 

FINAL TAKE HOME EXAMINATION 

MP211 APPLIED COMPANY LAW 

SEMESTER 2, 2020 

Examination duration: 24 hours

Total marks available:  40

Exam conditions:

1. This is a TAKE HOME examination. 
2. You will have 24 hours to complete the examination.
3. All answers are to be typed as an MS Word document (not PDF).
4. Your full name and student number MUST be included on each page of your submitted answers.
5. Ensure that for each question, you write the question number followed by the answer, for example, Question 1, the answer is such and such, Question 4, the answer is such and such etc.

Submitting your completed answers: 

1. This examination will open on Friday 16 October 2020 at 4pm.
2. The examination will close on Saturday 17 October 2020 at 4pm.
3. Completed answers must be uploaded to the Examination Dropbox in this subject’s Moodle site BY NO LATER THAN THE END OF THE TIME ALLOWED FOR THE EXAMINATION. 
4. Please note that you should try to upload at least 30 minutes before the scheduled examination cut-off time. 

Instructions to students:

1. Answer ANY FOUR (4) questions. 
2. Each answer should be approximately 200 to 300 words. 
3. Each question is worth 10 marks (40 marks in total).  

QUESTIONS

Question 1

Fred is a director on the board of XYZ Pty Ltd.

Bibek has approached Fred to tell him that he (Bibek) wants to invest in XYZ Pty Ltd and will give Fred a 5% commission if the investment is approved by XYZ Pty Ltd. Fred and Bibek decide not to tell the other directors of XYZ Pty Ltd about the proposed commission.

If Fred accepts Bibek’s offer will he have transgressed any corporate governance guidelines? Explain.

Question 2

ABC Pty Limited runs a bookshop in Sydney. Nisha is a director of ABC Pty Ltd. Nisha has met with a book publisher and plans to buy 100 copies of a new book at a very cheap price. Nisha then proposes to sell these books to ABC Pty Ltd and make a 100 per cent profit for herself.

Will Nisha’s plan breach any of the duties she owes as a director of ABC Pty Ltd? Explain.

Question 3

Who are the various groups of people who may call a general meeting of a company? In your answer, please refer to relevant legislation.

Question 4

The internal rules of a company govern the relationships between the company (as a separate legal entity) and its two main constituents; its members and directors. In Australian law, what are the names of the different types of internal rules of a company? What are the pros (benefits) and cons (detriments) of each type of internal rules?

Question 5

If a company adopts a Constitution, can the Constitution be modified? If yes, how is this done? In your answer, please refer to relevant legislation.

Question 6

What is meant by the term ‘Replaceable Rules’? Give three (3) examples of a Replaceable Rule. Can the Replaceable Rules ever be updated? In your answer, please refer to relevant legislation.

Question 7

Which companies must have a Constitution? In your answer, please refer to relevant legislation. Explain the legal effect of a Constitution (or the Replaceable Rules) on the relationship between the company, its directors and its members.

Question 8

Provide three (3) examples of real-life situations where a director of a company might have a conflict of interest.

Question 9

Explain the meaning of the terms ‘dividend,’ ‘interim dividend,’ ‘final dividend,’ ‘bonus shares’ and ‘dividend reinvestment plans.’ How are dividends paid?

Question 10

Explain the various mechanisms available to a company when it finds itself in financial difficulty.

Question 11

Explain what is meant by the following terms: ‘takeover’, ‘bidder’, ‘friendly takeover’, ‘hostile takeover’, ‘target’ and ‘scheme of arrangement’.

Question 12

If a company with share capital issues shares, the company must keep a record of all the shares issued. This record is sometimes called ‘the register’ or the ‘share register’. What information must be kept on this share register?

Question 13

Explain four (4) advantages for a public company in listing on the Australian Securities Exchange (ASX).

Question 14

What is a Deed of Company Arrangement and what is its effect?

Question 15

Explains what happens when a company goes into receivership.

Question 16

Explain what is meant by the following terms: ‘takeover’, ‘bidder’, ‘friendly takeover’, ‘hostile takeover’, ‘target’ and ‘scheme of arrangement’.

Question 17

Chapter 6 of the Corporations Act 2001 (Cth) deals with takeovers. By reference to relevant legislation, explain the purposes of Chapter 6. Explain the role of the Takeovers Panel.

END OF EXAMINATION