solution

DianDian Pty Ltd is the owner of the famouschain of restaurants,’DianDian’.Willis andandXialiare the directors ofDianDian Pty Ltd.Willis is also the CEO of the company and oversees the company’s day-to-day operations. InMarch2021, the company accountantsissued a report indicatingthat the business was running at a loss for the last six months.Willis read the report, butXiali was unwell at the time, so he decided to not tell her about it.Thingsgotworse as days passed, andDianDian Pty Ltd could not pay forits stockor salaries ofits employees.Willisdecides that he must act, so he applies fora loan to buyin handmadedumplings to add to the menuto improve business.DianDian Pty Ltd borrows$10,000 fromEastpac Bank to purchasehandmadedumplings.WhenXiali returns to work, she checks the accounts and recent reports and realises that DianDian is in serious financial trouble. Without Willis’s knowledge,Xiali immediately obtains the expertise of a financial advisor to prepare a restructuring plan.Shortly after, the company went into liquidation due toowing large sums of money to its creditors.

**AdviseWillisandXialiof their liability to DianDian Pty Ltdand any defences under theCorporations Act 2001 (Cth).Do not discuss S.180-184.Please usestatutory provisions to support your answer.***

**PLEASE ANSWER IN IRAC FORMAT DOWN BELOW***

ISSUE:

RULE IN THE CASE:

APPLICATION OF THE RULE:

CONCLUSION: