Business and Corporations Law Case Studies

Read two case studies on Business and Corporations Law covering topics such as unilateral offer, types of companies, and more. Get expert solutions at Desklib.

Business and
Corporations
Law

Case Study 1
 Ming has posted an advertisement in which he
has claimed that he will give a haircut for $10
to individuals who come to his shop and bring
the advertisement with them.
 This advertisement is a unilateral offer which is
made to the entire world.
 This offer can be accepted by anyone if they
comply with the instructions given in the
advertisement.

Case Study 1
 Carlill v Carbolic Smoke Ball Co is a relevant
case in this matter in which a similar situated
occurred.
 The court provided in this case that a contract
has formed based on the advertisement.
 The parties who comply with the instructions
given in the advertisement had entered into a
legal relationship with the company that posted
the advertisement (Fitzpatrick et al., 2017).

Case Study 1
 In the case of Ming, the forty customers who
have comes to his shop have brought the
advertisement with them.
 They have complied with the instructions given
in the advertisement.
 The acceptance is not required to be
communicated in a unilateral contract.
 The consideration is the money paid by them,
thus, a contract is formed, and they can enforce
Ming to give them a haircut for $10.

Case Study 1
 Other ten customers who did not bring the
advertisement with them failed to comply with
the instructions given in the advertisement.
 A contract has not formed between them and
Ming due to non-compliance of the contractual
terms.
 They cannot enforce Ming to cut their hair for
$10.
 Thus, Ming is liable towards those individuals
who bring the advertisement with them, and it
is Ming’s legal obligation to give them a haircut
for $10.

Case Study 1
 The unilateral offer can be terminated if its
performance has not started or completed
within a reasonable time.
 Ming cannot post a sign in his shop to terminate
the offer made by him to the public.
 He should post another advertisement in which
he specifies a period in which individuals can
avail such offer after which it will be terminated.

Case Study 2
 While forming a company, the promoters have
to decide its type.
 Section 112 of the Corporations Act 2001 (Cth)
provides that there are two types of companies:
public and proprietary.
 Both corporations have a separate legal
structure since the public corporations have to
comply with a strict legal framework.
 There is no limit of the number of shareholders
in a public company which makes it easy to
accumulate capital.

Case Study 2
 Section 45A provides that a proprietary
company can be categorised into small and
large.
 A small proprietary company has consolidated
revenue of less than $25 million and
consolidated gross assets of less than $12.5
million in a particular year.
 The number of employees is lower than 50 as
well in a financial year.

Case Study 2
 On the other hand, a large proprietary company
has consolidated revenue of $25 million or more
and consolidated gross assets of $12.5 million
or more in a financial year (ASIC, 2018a).
 The number of employees is 50 or more as well
in a particular year.
 In case any two of these elements are fulfilled,
then a small proprietary company becomes a
large proprietary company, and it has to hold
meetings and submit annual records.

Case Study 2
 In this case, registering a proprietary company
with ASIC provides more flexibility.
 There is flexibility in the legal framework, and
family members can introduce a constitution
which is not the case in a public company.
 At the end of the first year, The Company will
be in the category of a small proprietary
company since it meets its criteria.

Case Study 2
 After five years, the company will shift to a
large proprietary company since it meets its
criteria.
 The corporation will have to comply with
accounting standards, lodge annual reports,
comply with reporting requirements and hire an
auditor.
 The selection of ‘Anzac Coffee’ name for the
company is subject to prior approval of ASIC
(ASIC, 2018b).

References
 ASIC. (2018a) Are you a large or small proprietary
company. [Online] 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
on 5th September 2018].
 ASIC. (2018b) Business name availability. [Online]
Available at:
https://asic.gov.au/for-business/registering-a-business-
name/before-you-register-a-business-name/business-
name-availability/ [Accessed on 5th September 2018].
 Fitzpatrick, J., Symes, C., Velijanovski, A. and Parker,
D. (2017) Business and Corporations Law. 3rd ed.
Chatswood, NSW: LexisNexis Butterworths Australia.