shang and libo propose to create an insurance company australasia insurance glory pt 502056

LAWS301  Corporate  Law   2013  S3     INDIVIDUAL  ASSIGNMENT  (20%)     Nimit,   Deepa,   Shang   and   Libo   propose   to   create   an   insurance   company,   Australasia   Insurance   Glory   Pty   Ltd   (Glory).   For   this   purpose,   Nimit   and   Deepa   were   in   charge   of   registering  the  company  with  ASIC,  while  Libo  was  asked  to  find  suitable  premises  for  the   business.   Shang   is   not   involved   in   the   creation   of   the   company.   However,   there   is   an   understanding  that  Shang  will  receive  $6,000  from  the  creation  of  the  company.   Before  the  registration  of  the  company  is  completed,  Libo  entered  into  a  contract  to  lease   the  premises  from  Landlord  Ltd  for  $4,000  a  month.  The  contract  was  signed  by  Libo,  on   behalf  of  Australasia  Insurance  Glory  Pty  Ltd.  Two  weeks  later,  the  company  is  formed  and   the  board  of  directors  of  the  company  consists  of  Nathan  (as  managing  director),  Nimit  (as   non-­-executive   director),   Max   (as   chairman)   and   Mitra   (as   non-­-executive   director).   Libo   presents  the  contract  to  the  board.  However,  the  board  does  not  wish  to  be  bound  by  the   contract  because  the  company  can  lease  the  same  premises  for  $1,500  a  month.   Further,  the  board  of  directors  discovered  that  Shang  and  Deepa  made  a  profit  of  $50,000   each  from  the  creation  of  the  company.  This  amount  was  not  declared  to  the  board  of   directors.  The …