sample essay of BTX5090

this is a group assignment, and i can't remember the marks, but not high...anyways, thanks the other group member. this is the brief paper of the presentation

1.Company Background


We are solicitors of Arthur law firm which provides quality legal advice to the not for profit sector. Australian Love Life seeks our advice about the rules of incorporation for not for profit organisations in China and Thailand as they intend to set up headquarters in these countries. Australian Love Life is an Australian relief organisation provides emergency relief in response to disaster such as earthquake, typhoon and bushfire or anyother disater event. Their aim is always there for people in need, providing relief in times of crisis and care for the most vulnerable in Australia and worldwide. Australian Love Life owned a for profit subsidiary in Thailand. Currently, Australian Love Life has 20 members and has no money but would like to raise money through fundraising event such as marathon.

sample essay of BTX5090

the middle break is coming, but later than before. i still have an assignment due on today, but i haven't finished it yet.
melbourne royal show will be end at 28th september i think. but i think every's are the same...
few US TV shows come out now. TWO AND HALF MEN SEASON 8 or 9, THE BIG BANG THEORY SEASON 4. but no more 24. what a pity.
i cannot believe i watched the whole two seasons of 90210. this one is just like GOSSIP GIRL+DESPERATE HOUSEWIFE. i do not like GOSSIP GIRL...
anyway

last week, i know my BTX5090's result, a little disappointed. the teacher hands out the answers to each questions, but for the copyrights reason, i can not post it here. i post my assignment here. question 1, i got 24.5, question 5, i got 29.5

labor win, finally

after 17 days uncertain, labor finally win the election 2010 of Australia. the final score is 76: 74. too close...

well, some people said labor is not good, especially for international students. frankly, i don't know.

i heard that Julia had some plans about the internet, well, maybe i would like that plan. but so far, i don't know the details of plan.

tonight, i have a presentation, only 5-10mins presentation worths 30 marks, well, i got 22, i think it is reasonable for me. next week, i need to submit the report of the presentation. but only worth 5 marks. well...

so far, i still have not got my results of BTX5090, wish me luck, please

this semester~~

three weeks have passed after first day of this semester, i really hope this is my last semester.

just two units in this semester-MGX5440 and MGX5870.

some days ago, i handed in my take home exam of BTX5090. i think it is very similar to the last year's. but after i emailed it to the teacher, i still not get the reply from her. i hope she did receive it.

about MGX5870, i just finished the first assignment of it. it taught using a software, i can not recall the name, but i think it called Vesium or something similar. some friends told me MGX5870 is an easy unit. well i don't know, because i just learn a little about it.

the teacher of MGX5440 is the same teacher of MGX9230-Jeffrey, he is a good teacher. but i can not search the details of him. but i did find a lot details of the other teachers on MONASH website.LOL. MGX5440 is about public sector financial management, and so far, it is talking about the budget. two assessments in this unit, first one is due on week 6 and 1000 words, the second one is 2000 words, and last one is a group presentation included a report.

Winter school~~

Yesterday, the agent came here to do the routine inspection, I really do not like it, but it can not be avoided. I am preparing the presentation for the BTX 5090, it is a group presentation, I do not think it is hard.
Here, I post another assignment, the corporate law, I learned it in 2008 Semester, I don't think it is a great example, but not too bad. Please do not use it for any commercial purpose.

CASE-Bell Re-Insurers Ltd (example of essay of Corporation law)
There are some economic problems in Bell-Insurers Ltd. Some directors try to solve these problems, and give financial assistance to acquire its own share. This essay is to judge the legality of the share capital transaction and whether these directors breach any common law and statute law. To answer these questions, the theory of the financial assistance and the duties of directors need to be applied, and the related stature law are Corporations Act 2001 S180- S183, S260A-S260E, also the case ASIC v Adler [2002] NSWSC 171 is exceeding similar with this one.

As S256A and Trevor v Whiteworth (1887) 12 App Cas 409 state, to protect the rights of creditors, a company is generally prohibited from reducing its issued share capital and the limited liability companies have to maintain issued share capital. The Corporations Act deals with the following transactions: share capital reductions, share buy-backs, self-acquisition and control of shares: and financial assistance. In the Bell Re-Insurers Ltd case, it uses financial assistance to reduce issued share capital.

Before 1998, a company indirectly reduce its capital if it financially assists a person to acquire shares in the company is illegal, because that is considered as offending the spirit of the rule in Trevor v Whiteworth. But according to 1998 amendments, as S260 expresses that a company must satisfy three conditions, and then it may financially assisting a person to acquire shares (or units of shares) in the company or its holding company. Firstly, giving the assistance does not materially prejudice the interests of the company, its share-holders or company's ability to pay its creditors. (S260 (1) (a))Secondly, the assistance is approved by shareholders. Thirdly, the assistance is exempted under S260C.

In this instance, Bell Re-Insurers Ltd is a company which specialising in the re-insurance industry. But recently, because of wild storms on the North Sea in Europe, a number of oil rigs were damaged and the potential for large claims being made on the reserves of Bell Re-Insurers Ltd meant the share price would probably fall. Under this situation, Charles who is the managing director of Bell Re-Insurers Ltd arranged for a $20M unsecured loan to be given to Blue Jen Pty Ltd, which then channelled $20M to Blue Enterprise Ltd. Both companies used a portion of the funds to buy shares in Bell Re-Insurers Ltd. After that the share price of Bell Re-Insurers Ltd was stabilised. This transaction can consider as a financial assistance. But this transaction hasn't satisfied any condition which can allow financial assistant happened.

Firstly, when financial assistance happened legally, the transaction must not materially prejudice to the interests of the company, its shareholders or the company's ability to pay its creditors. To make the judgement, we should measure whether the company or shareholders are suffered materially prejudice.
To answer this question, it is useful to analyse the case of ASIC v Adlder [2002] NSWSC 171. In this case, Alder is a director of Adler Corporation Ltd. HIH Casualty & General Insurance (HIHC) is a subsidiary of HIH Insurance Ltd (HIH). And Adler Corporation Ltd is a substantial shareholder of HIH. HIH provided an unsecured $10M loan to Pacific Eagle Equity Pty Ltd (PEE), which controlled by Alder. After loan PEE became trustee of AEUT. Also AEUT is controlled by Adler Corporation Ltd. HIHC's $10M loan to PEE was then applied to HIHC's subscription for $10M worth of AEUT. PEE used $4M to buy HIH shares on stock market. Later, PEE sold HIH share at $2M loss. PEE's purchase of HIH shares was designed to give stock market impression what Alder was supporting HIH's falling share price by personally buying its shares. The NSW Supreme Court held that substance of transaction is HIHC gave PEE financial assistance to acquire shares in HIH and HIHC has been suffered materially prejudiced by the fact that initially exchange $10M cash for either unsecured loan to PEE, and from the equitable rights it obtained against PEE which were of less value than the cash handed over. According to Santow J both HIHC and HIH suffered in HIH suffered material prejudice as the result of the financial assistance and therefore S260A was contravened.

Compare the two cases, the companies (HIH & Bell- Insurers) both financially assisting other company to acquire their shares. But there is a little difference. In the ASIC v Adler case, the share price of the HIH is decrease when PEE sold HIH's shares. But in the Bell-Insurers Ltd case, the share price of Bell Re-Insurers is stabilized. In another word, HIH gets $2M loss, but Bell not. But can we say that Bell Re-insurers Ltd doesn't suffer materially prejudice? No, because when the Bell loan $20M to Blue, and Blue uses this money to buy Bell's share, nobody know what will happen after that, it means that the company may lose capital from the action. And another problem is the unsecured loan. Unsecured loan is a loan where no collateral or security is given or charged to the lender. Unsecured loan is viewed as higher risk than secured loan and interest rates are generally higher to reflect this. That means Bell need to undertake more risk. If the Blue Enterprise Ltd doesn't want to pay back the loan or the Blue Ltd winds up, Bell Re-Insurers Ltd would suffer a huge loss because of unsecured loan. To sum up, the Bell is suffered potential materially prejudiced. So the share capital transaction is illegal and doesn't satisfy the S260A.

Secondly, financial assistance should be approved by shareholders, and according to SS260B (1), shareholder approval for financial assistance by a company must be given by: (a) a special resolution passed at a general meting of the company, with no votes being cast in favour of the resolution by the person acquiring the shares (or units of shares) or by their associates: or (b) a resolution agreed to, at a general meeting, by all ordinary shareholders. And S260B (4), company must to hold a meeting to decide whether to financially assisting. Go back to the case, first of all, Rod only approached Charles, and without consulting the Board or the shareholders of Bell Re-Insurers Ltd. Even though Rod informs this transaction to the Board, and they have the meeting to talk about the plan, we believe that the Board won't agree with this transaction. Because provide the unsecured loan is not a good choice for the company. And to stabilise the price of share, the company can choose a safe way to do that, but not financial assistance. Rod steers clear of Board to do this transaction, the purpose of this is dubitable. And the duty of Rod will be discuss at the duty of directors.

Thirdly, this assistance can't meet any clause of the S260C. To sum up, this transaction is illegal, because it breaches SS260A-C, and according to the S260D, if a company provides financial assistance in contravention of section 260S: (a) the contravention does not affect the validity of the financial assistance or of any contract or transaction connected with it: and (b) the company is not guilty of an offence. And the director will take charge of the action.

Another issue of this case is about the duty of directors and officers. Fiduciary duty is a very important concept in this part, which is an obligation to act in the best interest of another party. For instance, a corporation's board member has a fiduciary duty to the shareholders, a trustee has a fiduciary duty to the trust's beneficiaries, and an attorney has a fiduciary duty to a client. And in the company, the fiduciary duty is about act in good faith in the best interests of the company, exercise their powers for proper purpose, retain their discretionary powers, and avoid undisclosed conflicts of interest. And as Corporation Act states, the SS180-183 is related to these part. There are three people in this case, Rod, Charles and Linda.

Rod is a non-executive director of Bell and a majority shareholder of Blue Enterprises. As a non-executive, he should monitor the activities of the management team headed by the CEO and bring an independent view and judgment and after an outside or broad perspective to the board's deliberations. Charles is the managing director of Bell Re-Insurers who is put in charge of managing the company's daily business and deposable for the senior executives employed to manage the company. Rod and Charles are in the different positions, but when they manage the company, their fiduciary duties are the same. They need to consider the interests of the company firstly, but not his own interest. But in this case, when Rod decide to financially assist to Blue, he didn't priority consider the benefit of Bell-Insurers Ltd, but the bull Enterprise. And this transaction will increase Rod's wealth. Although this transaction can't increase Charles' wealth, but when he let this act happen, he didn't think over what will happen after that, and whether this will lose company's profit. So, both of them breach the S181-Duty to act in good faith. Also according to the analysis above, they breach the S182 and S183. S182 states that a director, secretary, other officer or employee of a corporation must not improperly use their position to gain an advantage for themselves or someone else, or cause detriment to the corporation. The S183 says a person who obtains information because they are, or have been, a director or other officer of employee of a corporation must not improperly use the information to gain an advantage for themselves or someone else, or cause detriment to the corporation. They both know the situation of the company, but they don't use information and their position to make a good decision for the company. Especially Rod, he uses his position to make the interest for himself.

Another person in this case is Linda, another director who is Charles ex-wife. She didn't participate in the transactions, but she is aware of these transactions. Linda knows what Rod and Charles will do before the transaction happens, she has the opportunity to stop it. But she didn't, and as a director of a company, she braches the S180-Care and diligence, it means a director of a corporation must exercise their powers and discharge their duties whit the degree of care and diligence that reasonable person would exercise if they were a director of a corporation's situation.

Rod and Charles maybe claim they were doing this for the benefit of the company, which means they want to make the price of the company stables. But in the ASIC v Adler case, which is similar to this case, the court held that Alder breached the S182 when he arranged a port of $10M loan to buy HIH shares. Rod and Charles do the same thing as Alder, and their behavior may increase their own wealth. When they do this kind of thing, they don't priority consider the profit of company, but their own benefit. They improperly use their position as directors of Bell Re-Insurers Ltd and misuse the company's fund. These directors would be personally liable for civil penalty under 1317E (a).

In final conclusion, Rod and Charles give financial assistance to Blue Enterprises Ltd. This transaction breaches the S260A-D. Rod and Charles as the directors of Bell Re-Insurers Ltd, both of them breach SS181-183, because of misuse their position and company's fund. Another direct of Bell Re-Insurers Ltd Linda, she breach the S180 (1), because she doesn't discharge her duty of care. The three directors will suffer civil penalties under s 1317E. They can be punished according to 1317G (1).

REFERENCE

Asic v Adler and 4 Ors [2002] NSWSC 171, (Santow J)

LexisNexis, Australian Corporations Legislation, 2008 edition, 2008

Lipton, P & Herzberg, A, Understanding Company Law, 14th edition, 2008

Trevor v Whiteworth (1887) 12 App Cas 409

Bibliography

moneynet, Glossssary, http://www.moneynet.co.uk/glossary/glossary-r-z.shtml%20at%2027%20April%202008

wikipedia, Secured loan, http://en.wikipedia.org/wiki/Secured_loan, at 25 April 2008

new regulation, new financial year

in the last blog, i said i would update the blog sooner or later, and I think I should call it later, as it has been several days since I update my blog last time.


anyway, it rains a lot recently, and very cold now. It stays about 10 C, but very wet. so feel very cold.

about 30th June, there is no new iphone- iphone 4 appeared on the Australian Market, but on the three website, there states that the new iphone will be comming soon...but no exactly date. and 30th June is the last day of the Financial Year 2009, It should be a lot of shop on sale on that day, but I do not know why, there were not so many shops on sales on that day, maybe it is because of the weather, I do not know. I bought a suit on that day, my first suit...

the winter school began. BTX 5090. It is about the not-for profit organisation. just have classes for 6 days. and there is a presentation, worth 20 marks, and a take home exam, 80 marks. and the take home exam is on August, I think. this is a law unit, so all about the regulations and laws. An interesting thing, in the lecturer, the teacher said IKEA is a not-for-profit company. But i do not know why, the teacher explain it, but i really can not understany.

and the support rate of Julia, the new P.M is decreased...She does not like the immigration, I think. but the fact is that she is an immigration herself...She said Kevin Rudd's BIG AUSTRALIA is not good for Australia.

Oh, I start a new TV show- called Chuck. In Chinese, it translates to "Super market Spy". It talks about the man who name Chuck, has some special ability, or I can call it that he has an CIA database on his brain. This TV shows like the mix of 24, CSI and Friends. It is a little fun but not that fan, it is about the crime, but less violence and blood. There is a beauty in that show, called Sarah. I think there are a lot of TV plays involved a actress named Sarah, such as Prison Break, Joey. Sarah in Chuck's really name is Yvonne, she is from Australia~~~but I don't like her teeth, of course, no one is perfect. Also, there is another actress whose really name is Sarah in this play, ELLI, the sister of Chunk. there are three seasons of this play, I do not know when I can finish it.

I just finish another TV play- Joey, the Joey from Friends, but...I do not think this TV play is fun as Friends. but the actors and actress in the play are good-looking, especially Sarah.

another thing is about the immigration regulation, it changes again, I mean accounting. In a short word, you do not need to get an IELTS 7.0, you still can get a PR, but you need to conduct Profession Year.

the following is copy from the CPA Australia website:

The Skilled Migration Internship Program: Accounting (SMIPA) is a professional year program approved by the Department of Immigration and Citizenship (DIAC), available to overseas students who have an Australian accounting degree qualification as a result of at least two years' study in Australia.



SMIPA involves:



a minimum of 44 weeks' training, including a 12-week internship placement with a relevant host company

professional development and practical hands-on learning with an emphasis on workplace preparation: culture, ethics and expectations

recognition as a pathway for 485 graduate visa holders seeking permanent residency under general skilled migration

Successful completion of SMIPA may attract additional points under the general skilled migration points test.



SMIPA was developed by CPA Australia, the Institute of Chartered Accountants of Australia and the National Institute of Accountants, and is delivered by registered providers who have been approved by all three professional accounting bodies.



SMIPA aims to achieve learning outcomes that would enhance the ability of a graduate to:



work within Australian legislative requirements applicable to workplaces and operations

work safely and participate in occupational safety, health and environment processes

work effectively within the organisation's requirements, including those for equal employment opportunity and diversity

communicate effectively in the workplace

participate in a team

provide effective client service

apply occupation-specific knowledge and skills to professional work situations

implement strategies to manage their personal career development

Who is eligible?

SMIPA is available to all overseas students who have obtained an Australian accounting degree qualification as a result of at least two years' study in Australia and hold a 485 Graduate visa.



Graduates of Australian accounting degree programs will continue to have the option to complete the Skilled Migration Internship Program: Accounting (SMIPA) and gain an assessment that can be used to apply for general skilled migration (GSM). The professional accounting bodies wish to reassure graduates of Australian accounting degree programs that you still have an opportunity to increase their English language proficiency or to complete this recognised professional year program.



From 1 July, 2010, graduates of Australian accounting degree programs who receive an assessment showing that you have:



a formal qualification assessed as being at least comparable to an Australian Bachelor degree

completion of at least 9 out of the 12 core knowledge areas at tertiary level

IELTS Academic or General Test Report Form (TRF) to show you have a band score of at least six (6) on each of the four (4) components – speaking, reading, listening and writing

will be able to use your assessment to apply for a 485 visa. You will be able to use the 485 visa period to either gain an IELTS Academic band score of at least seven (7) or to complete the Skilled Migration Internship Program: Accounting(SMIPA).



CPA Australia will update assessments when we receive documentation showing that you have achieved:



IELTS Academic Test Report Form (TRF) Number to show you have a band score of at least seven (7) on each of the four (4) components – speaking, reading, listening and writing, or

completed the Skilled Migration Internship Program: Accounting (SMIPA)

We have been advised by DIAC that you will be able to use this updated assessment to apply for general skilled migration (GSM).



Approved SMIPA providers

Contact the following approved SMIPA providers directly:



Accountants Resource Centre: Melbourne

AMI Education: Melbourne

Australian Institute of Practical Accounting (AIPA): Melbourne

Brisbane North Institute of TAFE: Brisbane

Education Centre of Australia: Sydney

Flinders University: Adelaide

Holmesglen Institute of TAFE: Melbourne

Navitas Workforce Solutions: Sydney, Melbourne, Brisbane, Adelaide, Perth

Oten TAFE: Sydney

Performance English: Sydney and Melbourne

Professional Pathways Australia: Melbourne and Sydney

Queensland International Business Academy (QIBA): Gold Coast, Brisbane, Sydney

Swinburne University of Technology: Melbourne

The University of Queensland, Institute of Continuing & TESOL Education (ICTE-UQ): Brisbane

TOP Education Group: Rockhampton, Brisbane, Gold Coast, Sydney, Melbourne, Adelaide



Please note: The Australian Gateway Institute - Express Accounting is not an approved provider of the SMIPA program.