'Australian Corporations Law Essay\r'

'There are dickens union classifications, proprietorship and humankind. Most Australian companies are copyrighted modified companies because this classification and type suits the needs of just about businesses. (i) thinks to adopt a patented phoner A proprietary come with by comparison to a public community has simpler and therefore lower salute reporting obligations, is recoiled to 50 non employee dish outholders’, ‘and between 1 to 50 members’ , a public confederacy contribute have more. A proprietary c each(prenominal)er requires a minimum of one film director a public union requires a minimum of three directors.\r\nThe director or directors of proprietary union must ordinarily reside in Australia and be 18 historic period of age or older. A public corporation screw be listed on the stock put back and raise funds directly from the public by offering shares or debentures for sale’ a proprietary lodge can non, however a proprie tary company can offer shares to existing shareholders or employees. (b) Company Types There are two types of proprietary companies, companies limited by shares and companies unlimited with share capital. (i) Reason to Choose a Company Limited by Shares\r\nIn the event that a company limited by shares does not have sufficient assets to meet its debts, each(prenominal) member is only probable for the amount, if any, that remains unpaid on their shares , ‘[L]imited liability path that members of a company are not individualisedly nonresistant for the effective extent of their company’s debts. ’ This limitation of personal liability is the great advantage of this type of company. (ii) Reason Not to Choose a Company numeralless with Share Capital An ‘unlimited company means a company whose members have no limit staind on their liability’ for their company’s debts. Unlimited companies are rarely used. Company label A company delineate is optional; the company’s ACN can be used instead. The digit ‘Sai Kung’ has been chosen and so an diligence for reservation of the lift, bound 410, must be youth hosteld with ASIC prior to the application to say the company. bring in attachment 1. ‘A limited proprietary company must have the words â€Å"Proprietary Limited” [or Pty Ltd] at the end of its name. ’ B practise for Registration 1 Application Form To depict the company, ASIC form 201 must be completed and lodged with ASIC. See attachment 2. 2 Additional Information necessitate for Registration\r\nIn addition to the classification, type and proposed name of the company the following information must be provided: •‘the name and spoken communication of each person who consents to run short a member’ • ‘the present tending(p) and family name, all former given and family names and the look and place of birth of each person who consents in mak eup to become a director •‘the present given and family name, all former given and family names and the date and place of birth of each person who consents in writing to become a company secretary;’ A proprietary company is not involve to have a secretary •‘the address of the company’s narrationed space;’ •‘the address of the company’s proposed principal place of business (if it is not the address of the proposed registered office);’ •‘the number of shares each member agrees in writing to take up;’ The price of each share, whether the share go out be fully paid on registration, if not fully paid, the amount that will be unpaid on each share and whether or not the shares each member agrees to take up will be beneficially owned by the member on registration of the company. 3 Consents and Agreements Consents and agreements of propose directors, secretary and members must be obtained prior to the application for registration being accepted by ASIC. 4 Rules for Internal Management of a Company\r\nRegarding the rules for the indwelling management of a company, a company can either use the ‘replaceable rules’ as tell in the Corporation Act, or form a constitution, the company’s own rules, or a combination of replaceable rules and the constitution. C Registration by ASIC Registration is at ASIC’s discretion. 1 discern of Certificate of Registration Sai Kung Pty Ltd will not exist, will not become incorporated, until ASIC registers the company and issues a security department of registration. 2 Corporate Key ‘Within two days of registration, ASIC will also issue a corporate key to the company’s registered office address. ’ This is an eight digit number used to lodge forms with ASIC, access company records and receive annual statements online. This number should be kept confidential. D Alternative: A Shelf Company\r\nIf you d o not call to go through the process of registration instead you could purchase a shelf company, this is a company that has already been registered and is therefore available for immediate use. A shelf company can be renamed with the name of your choosing. The Facts 5 January Toto acting as a champion, entered into a annunciation on behalf of Sai Kung (‘SK’), a yet to be registered company. The amaze was with Television Broadcasts Limited (‘TVB’), to pay TVB for their professional person and technical assistance in producing a telly seafood cooking show. 12 January SK was registered by ASIC, the company did not adopt a constitution, did choose to have a common seal and Flora and Toto were twain appoint as directors.\r\nSK did not appoint a company secretary. TVB commenced providing SK with professional and technical assistance to produce the television show. 2 February The trend with TVB was ratified by SK on 2 February. 20 February As at 20 Febru ary the shows production has not commenced and TVB has not been paid for its assistance. B The Law Applied to the Facts When Toto, on behalf of SK, entered into the contract with TVB, he acted as a impresario, ‘anyone who exerts themselves on behalf of a not-existent company’ . Toto the promoter was liable to pay TVB for their services in the event that SK did not register or SK did register but did not ratify the contract.\r\nOn 2 February SK, a registered company since 12 January, ratified the contract with TVB. SK is now liable and bound by the contract made on its behalf on 5 January. However, in the event that SK does not pay TVB part or all of what is owed, Toto, as the promoter, remains liable. If Toto had obtained a introduce from TVB he would no longer be liable or ‘[a]n alternative way in which a company [SK] can become primarily liable is where the company [SK] and the other troupe [TVB] substitute a new contract in place of the pre-registration cont ract (otherwise known as â€Å"novation”). This discharges any liability of the promoter [Toto] in relation to the pre-registration contract.\r\nAn effective novation requires the consent of both the company [SK] and the third party [TVB]. ’ C The prey of the Section 133 of the Corporations Act ‘At common law, if a pre-registration contract was not performed … neither the company … nor the promoter were liable. The innocent other party was left with an unenforceable contract’, an example is the face Black v Smallwood . A promoter ‘was only bound if they intend to be bound’ as in the case Kelner v Baxter where ‘[t]he court examined the written contract and imputed and designing by [the promoter] Baxter to bind himself personally. ’ Section 133 of the Corporations Act states that government action 2B. replaces any rights or liabilities anyone would otherwise have on the pre-registration contract’ , ending the ‘uncertainty arising out of the laws of agency and contract. ’ ‘The issue of where liability lay for not fulfilling obligations incurred on a lower floor pre-registration contracts is now governed entirely by the Corporations Act and its predominate aim is to ensure that the innocent other party [in this case TVB] is not left without legal remedy.\r\n'