Business Law

Question One

Issues:

• Greg submits an application for registration to become a registered trustee to expand business – this was rejected due to several requirements failure to be met. These included:

o Greg was convicted over fraud & dishonesty 2 years ago;

o Greg only has experience in Superannuation trust management;

o No experience in Insolvency or bankruptcy matters – can not show a high level knowledge of fiduciary duties of a trustee and the Bankruptcy legislation;

• During the interview, he would have to show a high level of judgment – this could have been undermined, due to his conviction of fraud.

Law:

Regulation 8.02(1) of the Bankruptcy Regulations 1996, states that a trustee must:

a. Hold a completion of the academic requirements of a degree, diploma or similar Australian university or college, with a similar qualification who has completed:

• A course in the study in accounting of not less than 3 years duration;

• A course in the study of commercial law of not less than 2 years duration;

b. Engagement in relevant employment on a full-time basis for a total of not les than 2 years in the preceding 5 years;

c. The ability to perform satisfactorily the duties of a registered trustee.

Section 155A(4A) (Australian Bankruptcy Act 1966, p310) states that the committee can reject the application if it feels that the applicant does not have enough experience and knowledge to perform satisfactorily the trustee duties.

However, section 155A(3) (Australian Bankruptcy Act 1966, p308) does allow the committee the discretion to approve an application even if the applicant does not hold the relevant qualifications, experience or knowledge.

Section 155A(4) (Australian Bankruptcy Act 1966, p309) gives a mandatory direction, that if the applicant has had the following, then it should not be registered:

• The applicant will not take out insurance against liabilities;

• Has been convicted, within 10 years before making the application of an...