Answers. The three main advantages for David by incorpo
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Answers1.The three main advantages for David by incorporating Dave’s Boating Pty Ltd. are:a)It will simplify and clarify the management and ownership of the money and variousassets of the company along with the bank accounts held in the name of the company.Also, it is easier for the associations to enter into contracts1.b)If in case smaller companies apply for small business loans, then the company requires toprove that it is actually a business. Therefore, lenders and investors will seek thecompany’s business registration as well as other application requirements beforeapproving for a loan.c)The firms that are incorporated find it easier to attract capital investments because theinvestors become confident they would not be legally obliged to contribute more funds ifin case the company gets into financial problem.2.According to the Section 112 and 113 of Corporation Act, 20012, David needs to classify andtype of the company that is required. The proprietary companies that can be registered underthis act are – limited by shared and unlimited with share capital. So, his company’s name isoptional and followed by Pty Ltd. Now, for registration and lodgment, David needs to comply with the Section 117 ofCorporations Act, 2001. As per the provisions, he has to follow these guidelines:(1)To register a company, a person is required to lodge an application with AustralianSecurities and Investments Commission (ASIC)3.(2)The application needs to state –a)Type of company to be registeredb)Company’s proposed namec)Names and addresses of all the membersd)Family names, date and place of birth of members who consent to become director.e)Family names, date and place of birth of members who consent to become companysecretary.f)The address of company’s proposed registered office.g)Details of issued shares.The company’s internal management is governed by the provisions of Section 134, 135 and 136that talk about constitution and replaceable rules. According to these provisions, the companyconstitution is contract between company and each member, company and each director andsecretary, member and each other member. The replaceable rules, on the other hand, as per theCorporations Act, are basic set of rules that are used for managing the company. If thecompanies do not form constitution, its management can use the replaceable rules.1 Register Company? - Some Pros And Cons Of Registering A Company In Australia incorporator.com.au <https://www.incorporator.com.au/pros-cons-company.asp>.2 Corporations Act 2001 Legislation.gov.au <https://www.legislation.gov.au/Details/C2013C00003>.3 Jonathan Farrer and Ian Ramsay, "Director Share Ownership And Corporate Performance - Evidence From Australia" (1998) 6 Corporate Governance.
3.Facts Issue Is David liable if Dave’s Boating Pty Ltd could fulfill the order to Perth Sea Rescue? RuleIn January 2016, David entered into a contract with Perth Sea Rescue to supply it with 5 boatsfor $100,000 as he was in the business of manufacturing boats. The contract was signed on thepart of David as “agent of Dave’s Boating Pty Ltd”. However, his company was registered inJuly 2016.The applicable laws in this case is Partnership and Pre-registration contracts4. According to Section 131 of Corporation Act 20015, which talks about the contracts withoutregistration, the provisions are:(1)If anyone enters into a contract on behalf of a company before it is registered, then thecompany becomes bound by the contract and can make profit, if the company isregistered and ratifies the contract within agreeable time or reasonable time after thecontract was signed.(2)The person will be liable to pay damages to the party to pre-registration contract if thecompany so registered does not ratify the contract, if – time is agreed by both parties orwithin reasonable time after contract was signed. (3)If proceeding are brought in the Court regarding not ratifying the pre-registration ofcontract, then as per the order, the company has to do any of the following:a)Pay all the damagesb)Transfer the property received by the companyc)Pay an amount to a party to the contract(4)If in case the company fails to perform even after the ratification of pre-registrationcontract, then it will have to pay all or part of the damages.ApplicationIn the present case, David had a pre-registration contract with Perth Sea Rescue. So, he is boundwith a valid contract with Perth Sea Rescue. He is responsible to perform his duties as per thecontract. Now, after the registration of his company, Dave’s Boating Pty Ltd, it was required thatthe company had to ratify the pre-registration contract. So, if he and his company fails to do allof that, he will be liable to pay the damages to Perth Sea Rescue as per the Section (3), (4) ofCorporation Act, 2001.Conclusion4 "Statutes. Interpretation. Exclusiveness Of Statutory Remedy" (1919) 33 Harvard Law Review.5 CORPORATIONS ACT 2001 Austlii.edu.au <http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/>.
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