Law is all about designing appropriate norms, beliefs, policies, rules and regulations in order to prevent entire society from exploitative activities. Basically, their main objective is to create a nation free from any risk and problems which may harm the life of common people. Corporate act 2001 is focussing on various organizational issues and problems. It helps an association during various complicated situations and provides numerous of ideas or strategies to overcome distinct major issues. Therefore, assignment is going to highlight the useful acts of accounting, underwriters’ norms, rights and duties of shareholders in case of any loss. Along with this, trying to design an effective strategy for resolving this major legal problem that is faced by Austin Retail (Wellard, 2014). Hence, entire report is based on case study of Austin Retail in which their assumptions get failed due to which they are encountering a major loss.
1. Various issues that arise on these facts and advise the investors of their rights against Austin Retail Ltd
According to given case study it has been identified that number of members are involved in this case due to which liabilities are also shared in between them. But at the same time manager of a company get failed in their assumptions due to which they are going through a major problem or high level of loss. In fact various parties are involved in this agreement due to which several number of sections of corporations acts are applied in this situations in order to resolve it in corrective manner.
There are rules and guidelines made under chapter 60 of Corporation Act 2001 There are some guidelines and the regulations are made in respect of presenting and disclosing documents to stakeholders. RG 254 offering securities a disclosure documents contains the rules related to disclosure documents and material misstatement. RG 254 is a guide issued under chapter 6D related to material statement representation and disclosure document. It helps to managers and Advisors to understand and interpret of Administration proposal aspects under chapter 6D (Newburn, 2012). As per our case study of Austin retail Limited which has issued a prospective seeking to raise 12 million via issue 12 million $1 shares, relates with the chapter 6D under corporation act 2001. There are some essential aspects are defined as follows in terms of presenting financial information and details to stake holders of organisation.
Disclosure of accounting policies accounting rules and regulations are essential aspects of any listed or unlisted organisation. For an organisation to disclose all the relevant information and aspects related to issues share capital, paid up capital and debentures. Disclosure Document is a document which provides information and details related to share capital debentures issued capital securities and funding. For any public and government organisation it is required to issue disclosure document to the stakeholders who contains the details of types of shares and debentures loans securities which are held at the organisation for a specific period. There is a general rule followed by Organisation in respect of producing disclosure document to stake holders (Gorris, Hamermesh and Strine, 2011). Basically, there are 4 types of disclosure documents required to produce by public or government Organisation in Australia, which are defined as follows:
a profile statement is a document which defines the overview and mission of organisation in terms of future and sustainability. There are types of information such as current position of market; portfolio and history are defined in this statement.
An offer information statement:
Information statement is a document which contains Lord disclosure requirement in terms of presenting personal statements and information in front of stakeholders. This information statement is used by the organisation for fundraising up to 10 million in aggregate period which contains earlier fundraising under an offer information statement.
A two-part simple corporate bonds prospectus:
there are some amendments are made in respect of corporation amendments act 2014. These are the rules and regulations made subject to disclosure regime to offer simple corporate bonds. Which remain associated with two-part simple corporate bonds. A base prospectus contains the information related to life of three years and an offer specific document contains the details related to each offer (Kaczorowska, 2015).
it is considered as a most common document which is used by organisation to define the rows values Vision and Mission of business. It contains Material information related to securities bonds and prescribes financial market position of organisation. Prospectus does not contain the overall information related to market share, price and values of organisation. It simply provides an overview of business that on which behalf the organisation will work in near future.
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2. Advise Austin Retail Ltd and any other parties under the Corporations Act 2001
According to the mentioned case study, it has been found that as per the issued prospectus that seeks to increase $12 million by issues $1 shares. It has been lodged the as per the decided in accordance with ASIC. The major point to be taken into consideration is related with estimation made on forward book of orders that are based on poorly researched consultant’s norms. As per Austin retails commercial sales managers is not entirely responsible all the matter that are being seen in the mentioned case (Ciepley, 2013). It is just seems to be the case law of incorrect judgement made by during the period of time in respect to investors of the company. According to the section 588G of corporation act is has been said that imposes liability on any individual or owners of a company that allows an organisation to incur a debt at the period of time. In case the Austin has made shares mistakes for upcoming prediction at the time of debts was incurred their present reasonable grounds for suspecting that it was actual no their mistakes at all. The owner will be liable if at the time the liability become as important aspects in respect to their norms, then they must be aware of existence of reasonable ground to suspect insolvency or reasonable individual in a similar manner. One of the main problems as Austin faces is being determine when company has issued prospect in which all detail information related with shares and forward books agreement was made are needed to be analyse in proper manner to all investors of that particular company.