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Student Name: ………………………………………………

(Block letters)

Student Number: ……………………………………………

HI5027 Company Law

Assessment 2

Assessment Value: 20%

Due: Week 10 in Class

Assignment Topic:

One of the main ways in which the ‘veil of incorporation’ can be lifted is when directors breach their duties. This essay question is set around the duty to prevent insolvent trading. You will need to have read the chapter in your prescribed text that deals with this duty and have then researched more widely by looking at other textbooks, the relevant CCH online library, articles from the internet and journal articles. You must answer both parts of this topic. Please make sure you have REFERENCED in the body of your work ACCURATELY,. Remember, referencing shows you have researched and thought about what material will be relevant to assist you in answering the questions.

Read the following scenario and answer BOTH parts (questions) at the end.

OHS Solutions Pty. Ltd. is a company formed by three friends (Des, Satish and Emma) who bring different skills and abilities to the business. Emma is an accounting graduate, Des has expertise in occupational health and safety (OHS) and Satish has an IT degree. They decided to start up a business which would provide a portal through which the public and businesses could access (for free) information on all aspects of OHS. OHS Solutions would finance its business, and make profits, by charging businesses to advertise via their website.

The directors of OHS Solutions are:

Managing Director – Des

Finance Director – Emma (non executive)

Director – Satish (executive – employed also to run the technological side of the business)

Director – Ying (non executive) – a friend of Des’ and director of Support Pty. Ltd. (Support Pty. Ltd. has gone guarantor for a $50,000 loan from the Business Bank Ltd. to OHS Solutions)

The Shareholders of OHS Solutions (holding equal amounts of ordinary shares) are Des, Emma, Satish and Support Pty. Ltd.

As at January 2007 OHS Solutions had been operating for six months. It had some initial IT problems which prevented some of the advertisers’ material from being accessed. In order to try to help overcome these technical problems Satish engaged Trouble Shooters Pty. Ltd.

At the February Board meeting, Satish reported that two businesses who had paid to advertise on the website were dissatisfied with what was happening and were threatening to sue for breach of contract. Emma was unable to table any financial information as the employee who had been doing the accounts had been sick and when Emma looked at the records she found that they seemed to be in a bit of a mess. She did find a large account from Trouble Shooters that was over due. Des reported that he was disturbed by this news. He had been told by Satish that the IT problems had been fixed since Trouble Shooters had been engaged, and he had just signed a $10,000 advertising contract with Promotions Plus Pty. Ltd. to advertise the website and signed up to go to a trade show to be held in conjunction with a forthcoming OHS conference. He said this was needed because a number of high profile advertisers were threatening to discontinue their association with OHS Solutions unless the portal became better known.

Ying just listens in disbelief at the March Board meeting. It seemed to her that OHS Solutions is being poorly managed and is failing to make the most of a potentially profitable business opportunity. This could present an opportunity for Support Pty. Ltd. to make an offer to buy OHS Solutions at a good price. On the other hand Support Pty. Ltd. is exposed as a guarantor.

Assume she consults you, an accountant, for your preliminary view about the predicament of OHS Solutions and what she should do. Assume also that the first thing that comes to your mind is whether Ying herself may be vulnerable as a director of OHS Solutions for failing to prevent OHS Solutions from trading when it is insolvent.

YOUR TASK

Part A - (approx 800-1,000 words) 10 marks

Write a brief explanation about why the directors’ duty to prevent insolvent trading exists and the circumstances and consequences of the ‘veil of incorporation’ being lifted for insolvent trading. (Do not just repeat the words of the relevant sections in the Corporations Act).

And

Part B (approx 1,500-1,700 words) 10 marks

From what you know of OHS Solutions’ predicament, DISCUSS whether any of the directors may be about to breach or have already breached the duty to prevent insolvent trading. (In order to do this you will need to compare what is happening in OHS Solutions case with other precedent cases and refer to the relevant sections in the Corporations Act.) What will you advise Ying?

(Note: you do not have full information, so state briefly in the essay what information you need and make reasonable assumptions that will allow you to give your advice. ONLY DISCUSS INSOLVENT TRADING – THAT IS THE QUESTION AND YOU DON’T HAVE ENOUGH WORDS TO GO INTO OTHER AREAS)

PLEASE NOTE THE FOLLOWING INSTRUCTIONS:

References must be cited in Harvard referencing style (eg Smith 1992) .The assignment must include a bibliography (list of references used in the assignment). The Internet may be used for authoritative reference material provided the source, author, date of access, and site address is clearly shown in footnote format.

In addition to sources from the Internet, at least three hard-copy sources must also be used. These can be either books or articles or both. Materials from any common law jurisdiction may be used.

Memo

To: Northwind Traders

From: Student Name

CC: Instructor

Date: 1/13/2013

Re: Revenue Assessment

Thank you for the opportunity to assess your sales data in order to provide recommendations for increasing your sales. The analysis and recommendations below are based on the data you provided, which covers a period from May 2004 through June 2006. The analysis below is based on this data alone. Therefore, our recommendations should be tempered by your knowledge of business realities and your market. Please let us know if we can answer any questions concerning the analysis or the recommendations provided.

ANALYSIS 1 [Provide a Title for this section – For example, Salesperson Performance Analysis]

Analysis

[Summarize the findings from your analysis. Provide a chart, graph,or table to illustrate your analysis. The analysis should explain the area you analyzed and point out what you discovered. For example, if you were analyzing sales performance, you might wish to point out the percentage earned by the highest and lowest salespersons.]

Graphic

[Copy a graphic representation that graphically depicts the analysis in your spreadsheet – a chart, pivot table, or other summary of the data.]

Recommendation

[Provide a recommendation to the company. Based on your analysis, what might they do to improve sales? For example, based on salesperson performance, the company might set a baseline for sales performance and require that all salespersons stay within that baseline in order to keep your job. This might motivate better performance.]

ANALYSIS 2 [Provide a Title]

Analysis

Graphic

Recommendation

ANALYSIS 3 [Provide a Title]

Analysis

Graphic

Recommendation

SELF ASSESSMENT

From completing the Excel project, I learned … [Explain what you learned through completing the Excel project.]

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Course Project: Excel Project

Objectives | Guidelines | Grading Rubrics

The general instructions for this project can be found in the Week 6 Lecture material.  The Week 6 Lecture describes the assignment and provides an overview of the project as a whole.  There are no step-by-steps for the course project. The following are grading criteria for this project.

Organize the Data

· Data imported from SalesData.csv text file located in Course Project Materials in DocSharing. 

· Professional formatting follows the formatting guidelines we studied during the first week of class.

· Documentation sheet added to provide author, purpose, and date and provide information about each of the sheets you will create as you analyze the data.

· At least one calculated field added and copied to all cells in the worksheet.

Analyze the Data

Analyze the data in at least three different ways.  Each form of Data Analysis should be provided on a separate, appropriately labeled worksheet.  It is expected that each sheet will be professionally formatted and clearly documented with titles, comments, and explanation.  Remove any extra sheets so your workbook is as compact as possible when you turn it in. Go back and review your labs for assistance in completing the different types of analysis. The following are some examples of analysis you might wish to do:

· Sort by discount level. Have discounts increased sales volumes? Is there any discount level that appears to be more effective than others?

· Graph sales over time to see trends. Are there any peaks and lows in sales? Is there any time of year in which sales are highest? Lowest?

· Pivot the data to see total sales by quarter, country, category, and salesperson. Are there any highs? Are there any lows that need to be addressed?

· Subtotal the data. How are quarterly sales totals?  Sales totals by salesperson? By Country?

· Challenge Option:  Perform What-If Analysis. What if prices were raised by a certain percentage with a slight decline in sales? What combination of price increases and decline in sales makes most sense?

Present your Conclusions in a  Report

Use the integration techniques we worked on in the course to develop a report (Word document) that includes data and graphs copied and pasted from your spreadsheet. You will turn in both your Recommendation Report and your spreadsheet.   (There is an Excel Project Template in DocSharing, Course Project Materials, to help you formulate your report.  The yellow-lined information provides an explanation of what should be included in each section of the report.) Your report will focus one paragraph on each of the Data Analysis sheets in your workbook.  Explain the type of analysis you completed, the conclusions you drew, and a recommendation based on the analysis.  (45 points) You should include a final paragraph that explains three things you learned about using Excel for data analysis.  (15 points)