Question

For each of the following developments, explain whether the shareholders and/or directors would be personally liable to the landlord, NAB Bank, Janice or Acme Computers Pty Ltd.

1) CCS Pty Ltd enters into a lease for new premises where the business is to be headquartered. (Maximum answer 200 words)

2) CCS Pty Ltd borrows $100 000 from NAB Bank on an unsecured basis. Mira personally guarantees the repayment of the loan. (Maximum answer 200 words)

3) CCS Pty Ltd purchases a block of land from Janice for $500 000 to build a new warehouse. CCS Pty Ltd grants Janice a mortgage over the land equal to the $500 000 purchase price. (Maximum answer 200 words)

4) CCS Pty Ltd purchases several computers from Acme Computers Pty Ltd. One third of the purchase price is paid on delivery and the balance is payable in equal monthly instalments. (Maximum answer 200 words)

Answer 1

1) The shareholders of CCS pty ltd. are liable to the landlord for the premises that is taken on rent for office head quarters, because the directors on behalf of shareholders took the premises for rent and are not personally liable for this lease.

2) The shareholders of CCS pty Ltd. are liable for the loan taken from NAB bank ,as the company took the loan $100,000 directly from the bank. But in case of failure of payment of loan by the company ,then Mira ( assumed as director of CCS pty ltd. ) will be personally liable to pay this loan as she has given gurantee for loan taken by the conpany.

3) The shareholders of CCS pty Ltd are liable to Janice for the mortgage given by CCS pty Ltd, if the company is not able to repay the loan through the company's funds. If the payments are not paid by the company regularly, then the shareholders have to pay the amount $500,000 or else Janice can take back the possession of the land that is taken as under mortgage.

4) The shareholders of CCS pty Ltd are liable for the installments of balance payment to be paid to Acme computers pty ltd.