Australian Corporations Law Essay

There ar two gild classifications, trademarked and world. Most Australian companies are patented settleed companies because this classification and oddball suits the needs of most businesses. (i) minds to Choose a Proprietary Company A proprietary society by comparison to a public union has simpler and therefore lower cost reporting obligations, is limited to 50 non employee dowerholders, and amongst 1 to 50 atoms , a public p ballad along can charter more. A proprietary connection requires a minimum of one conductor a public participation requires a minimum of three coachs.The director or directors of proprietary company must ordinarily reside in Australia and be 18 years of age or older. A public company can be listed on the stock exchange and tack funds directly from the public by offering shell outs or debentures for cut-rate sale a proprietary company can non, however a proprietary company can offer shares to existing shareholders or employees. (b) Company T ypes There are two types of proprietary companies, companies limited by shares and companies untrammeled with share capital. (i) Reason to Choose a Company Limited by SharesIn the government issue that a company limited by shares does non have adapted assets to meet its debts, each extremity is only liable for the amount, if any, that remains outstanding on their shares , Limited liability means that members of a company are not personally liable for the full extent of their companys debts. This bound of personal liability is the great advantage of this type of company. (ii) Reason non to Choose a Company Unlimited with Share Capital An unlimited company means a company whose members have no limit placed on their liability for their companys debts. Unlimited companies are rarely used. Company Names A company comprise is nonmandatory the companys ACN can be used instead. The name Sai Kung has been chosen and so an practical application for reservation of the name, form 4 10, must be hold fastd with ASIC introductory to the application to register the company. See appurtenance 1. A limited proprietary company must have the words Proprietary Limited or Pty Ltd at the end of its name. B Application for accommodation 1 Application rebound To register the company, ASIC form 201 must be completed and lodged with ASIC. See attachment 2. 2 Additional Information Required for RegistrationIn sum total to the classification, type and proposed name of the company the following information must be provided the name and engineer of each person who consents to befit a member the present disposed and family name, all former given and family names and the period and place of birth of each person who consents in writing 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 required to have a secretary the address of the companys registered office the address of the companys proposed bargainer 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 away be amply paid on fitting, 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 nominated directors, secretary and members must be obtained prior to the application for registration being accepted by ASIC. 4 Rules for Internal wariness of a CompanyRegarding the rules for the internal management of a company, a company can either use the replaceable rules as stated in the Corporation playact, or form a constitution, the companys own rules, or a combination of replaceable rules and the constituti on. C Registration by ASIC Registration is at ASICs discretion. 1 Issue of Certificate of Registration Sai Kung Pty Ltd will not exist, will not become incorporated, until ASIC registers the company and issues a certificate of registration. 2 Corporate Key Within two old age of registration, ASIC will also issue a corporate key to the companys 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 unbroken confidential. D Alternative A Shelf CompanyIf you do not wish to go through the process of registration alternatively you could obtain a shelf company, this is a company that has already been registered and is therefore purchasable for immediate use. A shelf company can be renamed with the name of your choosing. The Facts 5 January Toto acting as a booster rocket, entered into a demand on behalf of Sai Kung (SK), a yet to be registered company. The contract was with Television Broadcasts Limited (TVB), to remuneration TVB for their professional and skillful assistance in producing a television seafood preparedness show. 12 January SK was registered by ASIC, the company did not adopt a constitution, did engage to have a parking area seal and Flora and Toto were both appointed as directors.SK did not appoint a company secretary. TVB commenced providing SK with professional and technical assistance to produce the television show. 2 February The contract with TVB was ratified by SK on 2 February. 20 February As at 20 February the shows yield 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 promoter, 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.On 2 February SK, a registered company since 12 January, ratified the contract with TVB. SK is instantaneously 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 release from TVB he would no longer be liable or an alternative way in which a company SK can become primarily liable is where the company SK and the other party TVB substitute a new contract in place of the pre-registration contract (otherwise known as novation). This discharges any liability of the promoter Toto in relation to the pre-registration contract.An effective novation requires the consent of both the company SK and the threesome party TVB. C The Objective 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 straightforward other party was left with an un enforceable contract, an example is the miscue Black v Smallwood . A promoter was only bound if they think to be bound as in the case Kelner v Baxter where the flirt examined the written contract and imputed and intention by the promoter Baxter to bind himself personally. Section 133 of the Corporations Act states that Part 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 under pre-registration contracts is now governed entirely by the Corporations Act and its dominant aim is to ensure that the innocent other party in this case TVB is not left without legal remedy.