Corporations Law | Assignment
Added on 2020-03-16
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Running head: CORPORATIONS LAW0Corporations Law
CORPORATIONS LAW1Table of ContentsAnswer 1....................................................................................................................................2Issues......................................................................................................................................2Type of Corporations.............................................................................................................2Corporation’s Name...............................................................................................................2Registered Office...................................................................................................................2Consents and Share Details....................................................................................................3Constitution or Replaceable Rules.........................................................................................3Lodging Application and Paying Fee.....................................................................................3Effect of Incorporation...........................................................................................................4Applicability...........................................................................................................................4Answer 2....................................................................................................................................5Issues......................................................................................................................................5Lifting of Corporate Veil.......................................................................................................5Scam and Façade Company...................................................................................................6Liability of Wound up Corporation........................................................................................6Conclusion..............................................................................................................................7References..................................................................................................................................8
CORPORATIONS LAW2Answer 1.IssuesThe key issues of this case are regarding the formation and incorporation of corporations, such as selection of register officer, filing the application and selecting the name of the firm. Further, the issues involve benefits of the company over sole proprietorship such as tax exemptions, expansion of business and ease in rising of funding. Type of CorporationsSection 112 of the Corporations Act 2001 provides the provisions regarding different kinds of companies. The firms are divided into two parts, Proprietary, and Public Enterprises. The proprietary corporations fall into two parts, limited by shares and Unlimited with share capital. Public companies are divided into four parts which include, limited by shares, limitedby guarantee, Unlimited with share capital and No liability company (Kobras 2010). Corporation’s NameThe section 148 of the Corporations Act 2001 provides provisions regarding name of an organization. The company is requiring using an available name or Australian Company Number. In case of a public company, the word ‘Limited’ must be added at the end and in theproprietary firm the word ‘Proprietary Limited’ must be included in the corporation’s title. The unlimited proprietary companies are required to add ‘Proprietary’ at the end, and no liability enterprises are required to add ‘No Liability’ at the end of their title. Section 147 provides that the name of a corporation must not be identical to another organisation and it must not be unacceptable by a government authority or ASIC. The unacceptable names include the titles rejected by ASIC, the names which include ‘commonwealth’ or ‘federal’ and which are denied by government authority. The availability of name can be checked over National Names Index which can be searched through online website of ASIC (ASIC n.d.). A person can reserve a name under section 152 by applying prescribed form to ASIC. ASIC is obligated to reserve the name if it is available and such reservation last for two months after that person can write an application for extension of a name for two more months (Kobras 2011).
CORPORATIONS LAW3Registered OfficeThe section 119A provides provisions regarding the jurisdiction for incorporations of an enterprise. A company is incorporated in particular jurisdiction which includes a state or Territory. The firms are required to submit applications under section 117(2) (n) and 601BC (2) (o) for its registration. ASIC is obligated for providing the name of state or territory of corporations in the registration certificate. The legal capabilities of an enterprise did not get affected by the regulations of state or territory. The proposed address provided by the corporation in it registration application becomes the permanent address for its registered office. Generally, the registered office of an enterprise situated near the place of work of a company and is considered as the permanent address of the enterprise. Section 144 provides that it is mandatory for corporations to display its name at every place where it carries out its business (McBurnie and Ziguras 2001). Consents and Share DetailsWhile registering a corporation, it is necessary that the structure of the company is defined which include the number of shares and directors’ authorities. The consent of directors, shareholders and members of the enterprise are required for the registration. In case of a proprietary firm, the approval of the entire member is necessary for the registration procedure. The directors and members shareholding details are also needed to be provided at the time of registration. All such information must be correct and submitted at the date of registration (Coffee, Sale and Henderson 2015). Constitution or Replaceable RulesSection 136 provides that a corporation can adopt a constitution before or after its incorporation, the constitution is the contract between the company and its directors, secretary, and other members. Constitution governs the operations of directors and member of a corporation (Lawpath 2015). The replaceable rules provided under Corporations Act which also governs the internal management of an enterprise. Section 141 of the act contains provisions regarding replaceable rules which include provision relating to maintenance of books and appointment, selection, and power of directors. The adoption of the constitution is mandatory for ‘No liability’ and special purpose proprietary corporations. In this case, the constitution is a better option than replaceable rules because constitution covers a wide variety of circumstances and it is a safer option for the enterprise (LegalVision 2016).
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