i have attached two word file one is just a question and the other one is the hint provided be the lecturer ...how to do the assignment? and we are using CORPORATION LAWS IN PRINCIPLE 8TH EDITION TONY...

Part 1
Since Ying is seeking advice of an accountant regarding the whole issue, the following points are
explained in conversion with the sections of “The Corporation Act 2001”.
“Sections 119, 124—125, 601AA—601AD of “The Corporation Act 2001””
“As far as the law is concerned, a company has a separate legal existence that is distinct from
that of its owners, managers, operators, employees and agents. A company has its own property,
its own rights and its own obligations. A company’s money and other assets belong to the
company and must be used for the company’s purposes.
A company has the powers of an individual, including the powers to:
• own and dispose of property and other assets
• enter into contracts
• sue and be sued.
Once a company is registered, its separate legal status, property, rights and liabilities
continue until ASIC (Australian Securities and Investments Commission) deregisters the
company.” (The corporation Act, 2001)
As per The Corporation Act 2001, companies are separate legal entities i.e. they will be solely
liable and responsible for the acts. Company‟s legal status will be different from that of
shareholders. Corporates can ca
y their own assets in their own name. They can sue others and
will be sued personally for the misdeeds. OHS has their own seal, in legal terms common seal
which is considered as official signature and used to sign the documents.
Lifting of corporate veil means is a decision in which the duties and rights of corporates will be
treated as the duties and rights of the person who is at the default side. Usually corporates are
distinct legal entities which are personally or solely responsible for the debts it incurs and will be
the sole beneficiary of the credit. Lifting of corporate veil makes the person solely or entirely
esponsible who is behind the misdeed. The person who did prohibited or illegal or unlawful acts
on behalf of the corporate will be accountable for the losses company is suffering or is going to
suffer due to that.
Insolvent trading
“CORPORATIONS ACT 2001 - SECT 588G
Director's duty to prevent insolvent trading by company
(1) This section applies if:
(a) a person is a director of a company at the time when the company incurs a
debt; and
(b) the company is insolvent at that time, or becomes insolvent by incu
ing that
debt, or by incu
ing at that time debts including that debt; and
(c) at that time, there are reasonable grounds for suspecting that the company is
insolvent, or would so become insolvent, as the case may be; and
(d) that time is at or after the commencement of this Act.
(2) By failing to prevent the Company from incu
ing the debt, the person contravenes this
section if:
(a) the person is aware at that time that there are such grounds for so suspecting;
or
(b) a reasonable person in a like position in a company in the company's
circumstances would be so aware.
(3) A person commits an offence if:
(a) a company incurs a debt at a particular time; and
(aa) at that time, a person is a director of the company; and
(b) the company is insolvent at that time, or becomes insolvent by incu
ing that
debt, or by incu
ing at that time debts including that debt; and
(c) the person suspected at the time when the company incu
ed the debt that the
company was insolvent or would become insolvent as a result of incu
ing that debt or other
debts (as in paragraph (1)(b)); and
(d) the person's failure to prevent the company incu
ing the debt was dishonest.
(3A) For the purposes of an offence based on subsection (3), absolute liability applies to
paragraph (3)(a).
(3B) For the purposes of an offence based on subsection (3), strict liability applies to
paragraphs (3)(aa) and (b).( The Corporation Act, 2001)”
According to Section 588G of The Corporation Act, 2001, if the company is at present insolvent
or there are probabilities of becoming bankrupt if entered into any deal and directors allow the
company to experience a debt, than the director who is behind all the acts will be accountable to
pay off that particular liability. Director will be liable if at the time of entering into the
transaction reasonable grounds were there to suspect insolvency.
Directors are representatives of company and...