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Commercial and Corporations Law: Assignment

   

Added on  2020-03-28

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Commercial and Corporations LawQuestion 1With regards to registering the business, there are few steps that Peter would need to follow.Firstly, he would need to decide on the underlying business structure which he wants to usefor conducting the requisite business. This could be sole trader, partnership, trust or acompany. Once the business structure is finalised, then application needs to be made for anABN (Australian Business Number). The application can be filed online. The ABN is aunique number which helps the government and regulators to recognise the business. Variouspersonal details and business activity details are furnished in the application which enablesidentification of the core business activities that the registered business intend to indulge in(Latimer, 2005, p.93-94). With regards to including Susan as a co-owner in the business,details need to be included at the time of application of ABN as these details are thenrecorded.Once application for the ABN is done, a business name needs to be chosen provided it isavailable. The same could be ascertained from the ASIC Connect Website. Further, Peter isallowed to conduct the business in his name provided the name is not registered by someother business. Once a business name that is available is found, the same needs to beregistered with ASIC (Australian Securities and Investments Commission) (Pendleton andVickery, 2005, p.63). This ensures that no one else can assume the same name that Peter haschosen for his business. Further, in order to reflect Susan as the co-owner to customers, Petercan include her name in the business name that is registered. The legal addition of Susan asthe co-owner has already been undertaken at the time of ABN application.Question 2There are various elements of a company that tend to distinguish it from other businessstructures.It is considered as an artificial person and hence as a legal entity. This is highlighted in s.124(1) of Corporations Act 2001. As a result, the various contracts can be entered in thename of the company and also the various creditors and lenders can sue the company torecover any outstanding dues (Ciro and Symes, 2013, p.92).Another element of a company is perpetual succession since the existence of the companyis independent of the members Further, the shares of the company are transferable and

Commercial and Corporations Lawhence the members or owners list is merely updated owing to transfer on death orotherwise (s. 1.5.6, Corporations Act 2001) (Austlii, 2017).Yet another element is the limited liability of the owners of shareholders which is limitedto the share capital they have put in. Unlike other business structures, in case of acompany, the owners or shareholders cannot be personally held liable unless there hasbeen a personal guarantee or any fraud (Salomon v A Salomon and CoLtd[1897] AC 22)(Oladotun, 2017).Further, the common seal (also known as company seal) is also another element whichacts as the signature of the company and used for execution of various contracts and otherlegal documents (s. 123, Corporations Act 2001) (McKnight, 2015).Before proceeding to registering a company, a number of documentation and steps need to befulfilled. First, the name of the company needs to be chosen keeping in mind the variousrestrictions imposed by ASIC in this regards. These relate to the non-duplication of theexisting names besides usage of certain characters only for the formulation of name. Thename selected should be reserved. Further, the operational mechanism of the company wouldneed to be deliberated coupled with understanding the obligations in the capacity of officeholder. Next, written consents must be obtained from member, director, secretary and theowner of the registered office address. Once the above formalities are completed, then apaper form can be lodged directly to ASIC or a private service provider can be contacted forassistance (Australian Government, 2017).It is possible for Susan to be a part owner for the company as she can be a member besidesPeter who would also hold shares which would determine her ownership in the company.This would be reflected at the time of filing application for registration of the company(Vermeesch and Lindgren, 2011, p.54).Question 3There are many advantages of a company over the sole trader or partnership which arehighlighted below.One of these is in the form of limited liability which segregates it from both partnershipand sole trader. In company business structure, there is separation of personal andcompany assets and hence for settling the corporate liabilities, personal assets of the

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