Corporation Question

Topics: Money, Stock, Lalo Schifrin Pages: 1 (272 words) Published: March 19, 2013
Anita, Abang, Kukus , Pu Che Tau, and Ranjit were good friends and students of Monash University. Upon obtaining their degree they decided to establish their own textile company known as Juta Jati Pty Ltd. Kukus and Ranjit decided not to be involved in the management of the company as they trusted Anita , Abang and Pu Che Tau who were appointed directors of the company. The company was doing very well and all the directors received salaries and bonuses. Both Kukus and Ranjit also received the payments. Unfortunately in 2007 the global textile industry declined and Juta Jati experienced losses. In order to sustain the company the directors Anita and Abang decided at a director’s meeting to borrow a sum of $500,000.00 from Cheap Bank when Pu Che Tau was overseas. Juta Jati spent the money purchasing cheap textiles from Myanmar. Unbeknown to the shareholders and directors the company belonged to Pu Che Tau . He had formed the company without the knowledge of the shareholders of Juta Jati. Pu Che Tau made a handsome profit from the transaction. Despite serious effort by the management Juta Jati’s textile business deteriorated and they could not pay the bank their monthly payments. Liquidator was appointed and the company is being wound up. The liquidator seeks your advice:

1. Are the shareholders Kukus and Ranjit pay for the debts of Juta Jati Pty Ltd.

2. Are the 3 directors Pu Che Tau , Anita and Abang liable for the $500,000.00 loan.

3. Is Pu Che Tau liable for the supply of the textiles while still being the director and shareholder of the company.
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