Produce insightful and critical legal arguments around the complex legal issues of the business based scenario. There must be evidence of wide and relevant research and critical application.

Order Description
Scenario 1.
As business continued to grow, Claire and Malcolm were advised by their friend, Bertha, a solicitor, that they really should be looking at reducing the potential financial risks to themselves. She invited them to attend a meeting with her where she discussed the various types of business structures they could consider.
Task 1
Using appropriate case law and legislation critically discuss the type/s of business structures that Malcolm and Claire should consider and advise them as to the best structure to meet their needs. [40 marks]

Scenario 2
Malcolm and Claire finally decided that they would like to form a Limited Company (Pifco Ltd) and were duly incorporated as such three months ago. Malcolm and Claire became directors of the new company and Claire’s 18 year old nephew, Phillip, who had no business experience at all, was also offered a position on the board because of his relationship to Claire.
The following problems have arisen:
Shortly after the company was established Malcolm was approached by a business acquaintance, the Managing Director of a Loan Company ,which lent money at high rates of interest to companies on the verge of insolvency. His friend suggested that Pifco should invest £ 40.000 in his company for a 15% shareholding. Malcolm was convinced that whilst the loans the company made were often risky, the high interest rates that could be charged more than compensated for this.
Malcolm discussed the proposal at the next board meeting of Pifco. He told the board that whilst it was an attractive opportunity, he did not feel Pifco had the capital available at the present time and felt it was a different line of busy to what Pifco did and was generally too risky. Claire and Phillip agreed.
Malcolm however decided to invest his own money in the business. He has not informed anyone of this.
Claire entered into a lucrative contract with a large car manufacturing company and her fellow directors were delighted when they learnt of this. However, Claire had been paid a significant commission by the car manufacturing company for securing the deal which she did not mention to anyone else.
Phillip has been given the responsibility for Pifco’s marketing strategy and he has taken a number of decisions without consulting the other two Directors. It has recently come to light that his decisions were wrong and as a consequence, Pifco has lost quite a lot of potential profit. When Phillip was questioned by the Directors, he argued that he rarely attended board meetings and so it was this lack of information that led to his erroneous decisions.
Task
With reference to appropriate case law and legislation, critically discuss any liability the Directors may incur with regard to a breach of their legal duties to Pifco Ltd