question archive QUESTION ONE In order to obtain the funds necessary to expand its business, Capital Ltd will undertake a $12M capital raising

QUESTION ONE In order to obtain the funds necessary to expand its business, Capital Ltd will undertake a $12M capital raising

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QUESTION ONE

In order to obtain the funds necessary to expand its business, Capital Ltd will undertake a $12M capital raising. Advise the directors of Capital Ltd overthe following matters.

(a) Can the funds be raised without a prospectus? If so, what other types of disclosure documents are available (2.5 marks).

(b) If a prospectus is prepared, what must the directors disclose to investors about the investment? (2.5 marks}.

(c) If the company issues a prospectus and the directors then become aware that there is a false and misleading statement in it, what can they do to remedy this? (2.5 marks).

(d) Does the Corporations Act provide any defences for directors where funds are raised under a prospectus that contains a misleading statement? If so, what are they? (2.5 marks).

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