Question

Under the Corporate Act 2001, which customer would be considered to be a 'wholesale client'?

a) An individual investing in shares
b) Hats and Scarves Pty Ltd, a retailer, which employs 25 staff
c) A small business with less than 10 employees
d) A start-up tech company

Answer 1

b) Hats and Scarves Pty Ltd, a retailer, which employs 25 staff

In context of the Corporations Act 2001, Hats and Scarves Pty Ltd, could be a wholesale client if certain financial criteria are met. Individuals, small businesses, and start-ups are generally retail clients, except under specific conditions.

Step-by-step explanation:

Under the Corporations Act 2001, a wholesale client is distinguished from a retail client based on several criteria such as the size of the entity, the amount of money involved in the transaction, and whether the client has a professional financial advisor. In the options provided, Hats and Scarves Pty Ltd, a retailer employing 25 staff, might be considered a wholesale client if they meet certain conditions such as having a certificate from a qualified accountant stating they have a prescribed net asset or income level. Individual investors, small businesses with fewer than 10 employees, and start-up tech companies would typically be classified as retail clients unless they satisfy the requirements that allow them to be treated as wholesale clients.