Business and Corporation Law: Case Analysis and Company Formation

This article discusses the key issues in a case involving Hunter Bus line and the formation of a company named Anzac Coffee. It covers the relevant legislations, regulations, and laws applicable in these cases. The first case involves the applicability of the Trade practice amendment (Australian Consumer Law) Act (No 1) 2010 and Section 60 of the Australian consumer law. The second case involves the formation of a company named Anzac Coffee and the relevant regulations and laws applicable to it.

Business and Corporation law
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Contents
Question 1..................................................................................................................................2
Question 2..................................................................................................................................3
Reference List............................................................................................................................5
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Question 1
The key issue in this case is the fact that Jenny who has faced an accident while travelling
with the Hunter bus line wants to sue the company. The nature of accident is that she has
removed her seatbelt to collect a book and in the very moment the bus braked causing her to
fall and get injured. Jenny wanted damages for her injury but Hunter Bus line stated that she
has signed a contract while purchasing the ticket which stated that Hunter Bus line is not
liable for any kind of injury caused to a passenger who is not wearing a seat belt.
The key legislations that are applicable in this case involve Trade practice amendment
(Australian Consumer Law) Act (No 1) 2010. This amendment was in effect from 14 April
2010. This act made amendments to the acts like Trade Practice act 1974, Australian
Securities and Investment commission act 2001 and corporation act 2001. The ‘unfair’
contract term will also come in effect from 1 July 2010 as par the amendment (Business
2018). Another key aspect that is going to be impacted in this case involves the exclusion
clauses, section 60 of the consumer law.
The unfair contract terms can be used by jenny to sue the hunter bus line. The unfair contract
terms are applicable on services as well as goods. There are some methods in which the
occurrence of ‘unfair’ is tested on the contract. The three situation of unfair involve firstly
imbalance in terms of rights and obligations of both the parties involved in the contract,
secondly the interest of one party is undermined and lastly can harm a party in both financial
and non financial manner in case of its application. So the contract that occurred between
Jenny and hunter bus line clearly fulfils the third criteria that is if this contract is followed
than injuries that are caused to the travellers are likely as there is no responsibilities of the
travel agency in this regard (Cornwalls, 2018). The contract is likely to have impact on one
party and limits the impact on the other party. The passengers can be injured but the travel
agency only takes responsibility of a party that has a seatbelt on. Thus the responsibilities of
the travel agency are limited by the contract.
Section 60 of the Australian consumer law has exclusion clauses which can also be used by
Jenny for suing the bus company. This section has mentioned that the entry of a contract
between two parties for product or service has an implied term that the service is going to be
provided by the service provider with “due care and skill” (Lawhandbook, 2018). A company
cannot make a contract which excludes this implied term. In case there is violation of the
term the company can be sued.
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So in conclusion it can be said that even though the Hunter Bus line has made a contract with
Jenny which stated that they are not responsible for any injury of the passenger but it is not
likely to save them from being sued because the terms of the contract is ‘unfair’ as par the
new amendment of the contract law. Section 60 of the consumer law makes it necessary to
ensure that care is taken in rendering service to the consumers and there is nothing that a
business can do to avoid that. It is also notable that contract has been made by the bus agency
at the time when they are about to make the journey and are not in a position to read the
contract.
Question 2
The key issue in this case is that there is need for the formation of a company which should
include only the family members of the proprietor and have the name Anzac Coffee. The
other conditions that are to be considered in this case is that in 1 years time the company will
have gross asset of $ 5 million, gross revenue of $ 10 million and 20 full time employee and
in 5 years time total asset will be of $ 13 million, revenue of $ 26 million and 5 full time
employees and 66 employed for half the time.
The chief aspect of the formation of the company involves the Australian Securities and
Investments commission approval. The legislation that is involved in it includes the
Corporation Act 2001 (Gevurtz, 2010).
The business structure that should be chosen by the proprietor should be partnership because
of the fact that the proprietor wants to make sure that the business is shared within the family.
That is the reason that sole proprietorship is not the right option for the proprietor in this
particular business case. The regulation suggests that the name of the company that is
selected should be unique. There should be no other company with the same name. The
Anzac coffee is a unique name that has been selected and there is no other company with the
same name so this name can be availed by the proprietor. It is advisable that the company
should chose limited liability. The company name should also display the liability of the
company (Asic, 2018). The company should add proprietary limited at the end of the name.
This proprietary company is likely to be considered small at the end of the first financial year.
At the end of five year the company cannot be considered as small as the small proprietary
companies should have gross assets of less than $ 12.5 million, gross revenue of $ 25 million
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and less than 50 employees (Asic, 2018). At the end of the 5th the Anzac Coffee is going to be
considered as a large proprietary company.
In conclusion it can be said that the best mode of starting business in this case is proprietary
limited. The company will have to start as a small proprietary company and as par its
projection by the end of the 5th year is going to be large proprietary company.
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Reference List
Asic (2018). Are you a large or small proprietary company | ASIC - Australian Securities
and Investments Commission. [online] Asic.gov.au. Available at:
https://asic.gov.au/regulatory-resources/financial-reporting-and-audit/preparers-of-financial-
reports/are-you-a-large-or-small-proprietary-company/ [Accessed 12 Sep. 2018].
Asic (2018). Changes to your company | ASIC - Australian Securities and Investments
Commission. [online] Asic.gov.au. Available at: https://asic.gov.au/for-business/changes-to-
your-company/ [Accessed 12 Sep. 2018].
Business (2018). Restructuring. [online] Business.gov.au. Available at:
https://www.business.gov.au/change-and-growth/restructuring [Accessed 12 Sep. 2018].
Cornwalls (2018). New Australian Consumer Laws Affecting Unfair Contractual Terms in
Standard-form Contracts :: Cornwall Stodart Lawyers. [online] Cornwalls.com.au. Available
at: http://cornwalls.com.au/sharing-knowledge/legal-updates/new-australian-consumer-laws-
affecting-unfair-contractual-terms-in-standard-form-contracts.aspx [Accessed 12 Sep. 2018].
Gevurtz, F.A., 2010. Corporation law. West.
Lawhandbook (2018). Exclusion Clauses and the Australian Consumer Law. [online]
Lawhandbook.sa.gov.au. Available at:
https://www.lawhandbook.sa.gov.au/ch10s02s06s01.php [Accessed 12 Sep. 2018].
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