Question 1: A Ltd, a large public company, proposes two significant transactions in the near future. First, A Ltd proposes offering for sale its major 40% shareholding in B Ltd, another public company that carries on business as a grocery and smallgoods business. The shares in B Ltd are not quoted on the Exchange. Two nominees of A Ltd sit on the B Ltd board and in practice A Ltd is able to determine the outcome of decisions about B Ltd's financial and operating policies.

The directors of A Ltd have recently decided to seek expressions of interest in this proposed sale of the company's 40% shareholding in B Ltd. They have decided to take this step because they are aware that B Ltd will shortly sell off its profitable grocery business and that B Ltd has been suffering declining fortunes for some time.

A Ltd then advertises in a national newspaper that it seeks offers from those interested in acquiring its 40% shareholding. This advertisement states simply that A Ltd has decided to pursue other investment strategies. Green, a non-executive director of A Ltd who was present at the earlier board meeting, is concerned for the full discharge of his responsibilities under the Corporations Act 2001.

Advise A Ltd as to its legal obligations under the Corporations Act 2001. Advise Green and the other directors of A Ltd as to their legal obligations and potential liabilities.

Question 2: In a second transaction, A Ltd issues four new debenture notes for subscription over the next six months. There has been no disclosure to investors with respect to these issues. Instead, Green negotiates with four individual investors who each agree to accept the debenture notes. Each note obliges A Ltd to repay a principal amount of $100,000 together with interest. The four individual investors are all well known to A Ltd and have expressed an interest in investing in the A Ltd debentures for the longer term.

One of the investors, Mary, is a stockbroker. She says that she will be able to interest many of her clients in the A Ltd debenture note within a month. At her request, the offer of the debenture note to Mary is amended so as to enable the offer to be accepted " by Mary, or by one of her selected clients".

Advise A Ltd as to its legal obligations under the Corporations Act 2001.