BSL305 :In order to obtain the funds necessary to expand its business, Capital Ltd will undertake a $12M capital raising: Company Law Assignment, MU, Malaysia

QUESTION ONE

In order to obtain the funds necessary to expand its business, Capital Ltd will undertake a $12M capital raising. Advise the directors of Capital Ltd over the following matters.

(a) Can the funds be raised without a prospectus? If so, what other types of disclosure documents are available?
(b) If a prospectus is prepared, what must the directors disclose to investors about the investment?
(c) If the company issues a prospectus and the directors then become aware that there is a false and misleading statement in it, what can they do to remedy this?
(d) Does the Corporations Act provide any defenses for directors where funds are raised under a prospectus that contains a misleading statement? If so, what are they?

QUESTION TWO

Goodtimes Ltd has had a very successful trading period. The directors decide that the profits should be used to offer to purchase back some of their shares held by the members. The directors wish to undertake two transactions:

1. Buyback 12% of the ordinary shares held by a shareholder named Jasmine and
2. offer all shareholders the opportunity to sell 8% of their ordinary shares to the company
   (a) Name the type of buy-back relevant to each of the above.
   (b) Describe the obligations that the directors have, and the procedures that must be followed under the Corporations Act, to allow the directors to buy back the shares from Jasmine.
   (c) Describe the obligations that the directors have, and the procedures that must be followed under the Corporations Act, to allow the directors to buy back the shares from the remaining ordinary shareholders.

QUESTION THREE

Discuss any 2 of the following

(a) “Members can sue directors therefore there is no need for statutory derivative action” Discuss whether this statement is true or false and why.
(b) Legal significance of share register v share certificate
(c) Procedure for the appointment of directors
(d) Casting votes and resolutions
(e) Notices of meetings

Answer

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