Assignment

This is a Company law question

Light Enterprises Pty Ltd (Light), which was set up as the vehicle to run a business to manufacture and distribute pharmaceutical products, was registered with Mary and Michael as its directors. Mary and Michael, and their two sons, Nick and Brad, each own one share in the company. After the company was formed, the following occurred:

• - Light entered into a lease for new premises for the business;

• Light borrowed $100,000 from Commerce Bank to fund expansion of the business. Mary and Michael personally guaranteed repayment of the loan; and

• Light purchased a large piece of machinery that was needed for the manufacturing process from Heavy Constructions Pty Ltd (Heavy). At this time, because the

• company was starting to experience financial difficulties, it was not able to pay the full purchase price on delivery. Instead, one third of the purchase price was paid on

• delivery and the balance payable in equal monthly instalments.

• Assume that twelve months after these transactions were entered into, Light was unable to make the required payments.

• Advise whether the directors and/or the shareholders of Light would be personally liable to the landlord, Commerce Bank or Heavy.