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(Solution) Assignment on Company Law

   

Added on  2021-06-15

6 Pages1159 Words26 Views
Running head: COMPANY LAWCompany LawName of the StudentName of the UniversityAuthor note
(Solution) Assignment on Company Law_1
1COMPANY LAWQuestion a:Issue:The issue of this case is whether a company can be established by Martha and controlled. Rule:The legislation of the Corporations Act 2001, lays down the principle of separate legal entity.This relates to a situation where the members of a company or an undertaking are differentiatedfrom the company itself. The case of Salomon v A Salomon and Co Ltd [1897] AC 22 furtherdiscusses the concept of separate legal entity. A company is known as an artificial person andhence it has the power to sue and be sued. The issue of the mentioned case dealt with a scenariowhere the a sole proprietorship business was formed by him and thereafter a companyconstituting of other members. However, the company failed and was liquidated and he was heldliable. In such a situation, corporate veil will be applied since the company is an artificial personand separated from its directors, members and shareholders. In this matter Salmon was theprincipal and was therefore held liable for the debt personally. Thus, the liquidator had overlooked the matter of separate legal personality of Salomon Ltd from the debts of the company. Acompany is formed based on the provisions of the legislation mentioned above. As per the act, acompany cannot be created or formed without the name clause, memorandum of association andarticle of association. Therefore, the directors will not be held liable in these circumstances whenthe company is liable. The directors and shareholders have their separate obligations and rightsand the company has separate. There are different types of companies that can be formed. Soleproprietorship is a common type of company that
(Solution) Assignment on Company Law_2
2COMPANY LAWApplication:The scenario and facts of the case discusses the situation wife of Gus had formed a company ofsole proprietorship by making Gus the only employee. Martha, his wife was the only director ofthe company. By following the relevant provisions of the above mentioned act, the company wasformed and it was treated to be distinctive from the members engaged with the company.However, if the company is held liable, then the director and employee that is Martha and Guswill not be responsible for the losses incurred by the company. If Martha wants to create a newcompany then she must follow the registration process as per the Corporations Act, 2001. Forfulfilling the registration, Martha must include the object clause, capital clause, name clause,memorandum of association and articles of association. Therefore, Martha being the soleproprietor should determine as to how her company will work and who she wants to hire asemployees. Conclusion:Lastly, it can be concluded stating that Martha can form a company and control it being the soletrader. Question bIssue:In this scenario, the issue is whether the original contract is breached by Gus and if the argumentof Acme will have an effect on the contract.
(Solution) Assignment on Company Law_3

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