business and corporations law

business and corporations law
Which one of the following is the most correct in relation to the indoor management rule: It is:
Select one:
a. A common law rule.
b. A rule that arose from the judgment of the court in Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656.
c. A principle that can be relied upon by the company and outsiders
d. Since 30th June 2013 no longer relevant in relation to the assumptions in s 129 Corporations Act.

Which one of the following is false:
Select one:
a. All companies must have a registered office
b. Where a company has retained the replaceable rules the payment of a dividend is up to the shareholders. They will decide in a general meeting the amount and time of payment of any dividend.
c. ASIC may register a company without that company having to have “Limited” in its name.
d. Remuneration of directors is governed by the replaceable rules.
Which one of the following is false:
Select one:
a. The Criminal Code Act 1995 sets out that vicarious liability no longer applies to companies unless the court finds both a fault and a physical element.
b. The replaceable rules contain a provision whereby directors must, if they are issuing shares in a proprietary company, offer those shares to the existing holders of shares in that class.
c. A disclosure document for the purposes of the fundraising provisions in the Corporations Act that contains a forward-looking statement will be held to be misleading in the 2 following situations: (a) if the person making it knows the statement to be incorrect, and (b) if the person making the statement does not have reasonable grounds for making the statement
d. Shares can be bought, sold and cancelled.
Choose one of the following to complete the sentence correctly: The Corporations Act 2001 (Cth) was enacted by the Commonwealth government:

Select one:
a. To ensure that the ASIC Act did not proceed.
b. Pursuant to the power in s 51(xxxvii) of the Constitution.
c. After the High Court authorized the Commonwealth government to do so pursuant to the decision in New South Wales v Commonwealth (1990) 8 ACLC 120.
d. As a co-operative scheme with the States governments.
In Lee v Lee’s Air Farming Ltd [1961] AC 12, Mr Lee owned a business as a sole trader. He formed a company to conduct the business. He was governing director and workers compensation insurance was taken out naming Mr Lee as an employee. He was killed while engaged in company business. His wife made a claim on the workers compensation insurance.

Which one of the following is true:
Select one:
a. The Privy Council decided that because Mr Lee was the governing director of Lee’s Air Farming his wife was unable to claim workers compensation.
b. The insurance company only paid out on the insurance policy when it was proven that Mr Lee originally owned the business now being run by the company.
c. The court in the matter rejected the principle from Salomon v Salomon [1897] AC 22 because Mr Lee had not attempted to create any nominee shareholders as had occurred in Salomon v Salomon when Mr Salomon made his wife and children shareholders in Salomon & Company.
d. The Privy Council hearing the matter held that Mr Lee could negotiate a contract of service between himself and the company.
Which one of the following is false:
Select one:
a. All companies are required to lodge a copy of their constitution with ASIC.
b. Even though s 124 Corporations Act sets out that the company is an “individual” which makes it unnecessary for it to have objects in its constitution some companies are still required to set out their objects.
c. Courts interpret company constitutions in a similar way to commercial contracts.
d. Shareholders can take proceedings for a breach of the contract created in s 140 Corporations Act if a company does not comply with provisions in its constitution that apply to shareholders.
Turquand Pty Ltd (Turquand) (a large construction company) has a constitution limiting the right of the directors in relation to entering contracts for the company where security over company assets is required. Any loan of more than $100,000 where security is required must be put to the general meeting of shareholders for approval. In breach of the company constitution, Stan, a director, borrows $500,000 from the Bank of British Columbia without referring to the general meeting of shareholders. He uses the common seal and very carefully without the Bank being aware, forges the signature of Arthur (who is one of the other directors) on the security documentation. The Bank takes a security interest over the company’s heavy equipment. The Bank seeks to enforce its rights. Having regard to the facts in this question, which one of the following is false:
Select one:
a. The fact that Turquand’s constitution was not complied with will make no difference to the Bank’s reliance on the assumptions in s 129 provided the Bank did not know or suspect the irregularity.
b. The forgery of the signature of Arthur does not stop the Bank relying on the assumptions
c. In this question Turquand has a common seal. Pursuant to s 127 the affixing of a common seal can be witnessed by 2 directors.
d. To succeed the Bank will need to show that s 128(4) applies.

Which one of the following is true:
Select one:
a. Although pursuant to s 127 Corporations Act all companies do not have to execute documents using a common seal all companies must still have a common seal.
b. Controlling the composition of the board or holding over 50% of the issued share capital are not the only grounds upon which a company can be classified as a subsidiary in the Corporations Act.
c. Limited liability means different things in public and proprietary companies. In proprietary companies it means shareholders have no liability.
d. Executive directors are consultant part-time directors
In which one of the following cases did the court lift the corporate veil:
Select one:
a. Salomon v Salomon & Co Ltd (1887) AC 22 concerning a boot manufacturer.
b. Gilford Motor Co Ltd v Horne [1933] CH 935 concerning a managing director.
c. Tracy v Mandalay Pty Ltd (1953) 88 CLR 215 concerning investors losses.
d. Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1976) 50 ALJR 203.
In Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 the House of Lords held that the contract should be rescinded. Which one of the following is the main reason for the Court’s decision:
Select one:
a. that the directors were nominated by a syndicate.
b. that the board that was set up was independent of the promoters.
c. the decision in Kelner v Baxter (1866) LR 2 CP 174.
d. the promoter’s non-disclosure.
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