Commercial and Corporation Law Assignment 2022

RUNNING HEAD: COMMERCIAL AND CORPORATION LAW
Commercial and
Corporation Law

1
COMMERCIAL AND CORPORATION LAW
Part A
This is preferable recommended with regard to possible business structures that could be
suitable for establishing the food supply business in restaurants. While considering the point
of view of all those parties seeking appropriate advice in favour of their company concern
problem. Two of the sides named Jekyll and Hyde therefore support the structure of
partnership and the third i.e. Pat is more suitable in favour of business structure type. This
assignment will define about the company and partnership, its meaning and advantages and
disadvantages of both the business structure. The company would be the first entity to be
discussed in support of the aforementioned recommendation.
A company is a voluntary association of people created for profits or non-profits purposes to
carry on business. These individuals contribute to the wealth by purchasing their stocks in
which they are split.1 It is an association of people incorporated as a company with a common
equity i.e. share capital contributed by its members for the purpose of employing it to gain
profit in some business. A company is a distinct lawful entity that may be liable for debt, can
take legal action and be sued. The company’s shareholder may restrict their private
responsibility and are not usually liable for business arrears. Company is a complicated
corporate structure with high cost of set-up and reposting. One can set up a business as a
private or public company.
As per the Corporations Act 2001, a company is a distinct lawful entity which; can acquire
property or can sold it, can conduct all the body corporate functions and has a perpetual
succession.2 To establish a company, it must be incorporated under the Corporation Act 2001
as well as be listed under the Australian Securities and Investment Commission (ASIC).3
Like UK law, Australian legislation recognizes a type of company called the corporation sole.
There are some instances of such companies; however, the company alone is excluded from
Australian corporate legal definition4. A request for listing would describe whether the
1 Stephen Bottomley and Kath Hall, Contemporary Australian Corporate Law (Cambridge University Press,
2017) 652.
2 Vicky Comino, Australia's "company Law Watchdog": ASIC and Corporate Regulation (Thompson Reuters,
2015)
3 Australian Securities Commission Act 1989 (Cth) s5
4 Corporations Act 2001 (CTH) s57A

2
COMMERCIAL AND CORPORATION LAW
corporation is a proprietary corporation or a public corporation and the sort of responsibility
of the company’s stockholders, as one of:
 Unlimited with share investment
 Limited by shares
 Limited by guarantee
 No obligation
Advantages of company
Followings are some of the advantages of company:5
 Shareholders liability, unless indicated otherwise, is restricted to the face value of
their shares or their assurance.
 Death, insanity, shareholder or directors insolvency do not affect the existence of the
corporation. A corporation has a distinct lawful entity with continuous succession.
 In the trade of the corporation, the administration is in the hands of the directors
nominated by the stockholders and well-experienced individuals. Salaried
professional directors are assigned to handle the day-to-day operations. The enterprise
therefore provides professional management.
 As the membership is very big, the entire business risk is split among the company’s
various members. This is a benefit for small investors in particular.
Disadvantages of Company
Some of the disadvantages of company are6:
 A company shall make multiple statements accessible to the Registrar of the
Corporations, Financial associations, in accordance with the legal regulations; the
confidentiality of the business shall be reduced.
 A business must comply with more legal demands compared to ownership and
partnership. It takes a lot of time and effort.
 Directors and managers sometimes misuse the resources of the company for their
personal interest. This gives the business loses and the business is hut.
5 George Blakinston Wilkinson, South Australia: Its Advantages and its resources (J. Murray, 1848) 390
6 Paul Latimer, Australian Business Law (CCH Australia, 2011) 1239