NMIT – MELBOURNE
POLYTECHNIC
BACC204 – INTRODUCTION TO COMPANY LAW 101
PRESTON CAMPUS
ASSESSMENT TASK NO 2
SEMESTER 1 – ISSUED
TUTORIAL 31ST MARCH 2014
ADVICE: This is the
second of four assessments for this unit in 1st semester 2014.
DUE: Must be handed
in at Tutorial in Week 8
WORDS: Eight Hundred
Words (800) not including footnotes and references. Assessments up to 1000 words will be accepted.
VALUE: 20% of total
marks for the unit.
FORMAT: Style your answer
as a Memorandum of Advice.
TOPIC: Answer each
of the concerns (1) thru (4) raised at the conclusion of the following
case. Be sure to explain the reasons for
your answers:
_________________________________________________________________________________
Wilma and Mary are partners in “Wilmary
Books,” a highly successful second-hand bookshop business in the inner western
suburbs of Melbourne. Wilmary Books
leases its premises from a real estate called Sly & Sharp P/L. Meridith is the sole proprietor of
“Meridith’s Books” a second-hand book shop in the neighbouring shopping
centre. Wilmary Books is approximately twice the size
in turnover (sales) than Meridith’s Books.
When they met at a trade function a month
or so ago, all three proprietorsagreed that they should consider merging or
amalgamating their businesses as this would give them far greater market presence
and economies of scale than they had in their present competitive stature.
Wilma and Mary have decided to get
independent advice on the merger proposal and they have retained you to advice
them. Meredith is free to obtain her own
advice and you are not concerned with what, if any, advice Maridith is getting
or from whom.
In any event, all three proprietors are
agreed that the key concerns re the merger proposal are as follows:
1)
What sort of business structure
they should use as the basis of the merged business, and why?
2)
How can Meridith retain an
interest in the merged business: Note
that Meridith’s business, while it has great potential, is barely profitable,
due to Meridith’s lack of knowledge of the second-hand book market. Nonetheless Meridith is insistent on having
some role in the merged business, and will not allow the merger to go ahead
until that aspect is resolved. Both
Wilma and Mary do NOT want Meridith to have any managerial role in the merged
business but would consider a non-managerial involvement.
3)
What is the underlying problem
associated with the lease on the premises of Wilmary Books and how would you
resolve it as part of your merger proposal?
4)
The assets of Meridith’s Books
includes $20,000 worth of antique books which were provided by their owner to
Meridith and have since been included in the stock of books at Meridith’s Books. The owner of the antique books believes he still owns the books and
that they were delivered to Meridith’s Books ‘on approval’ for sale on a
commission basis. Meredith believes she
bought them outright.
Advise Wilma and Mary in respect of each of
the above concerns.
Ooo000ooo
