Steps for Formation of Company in Australia and Liability of Parent Company for Subsidiary's Actions

Running Head: BUSINESS LAW
Business Law
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1BUSINESS LAW
Answer 1
Issue
The issue in this case is to identify the steps which are required for the formation of company in
Australia
Law
Section 112 of the Corporation Act 2001 (Cth) provides provisions on relation to the types of
company available to a person for the purpose of carrying out a business activity in Australia.
Under these provisions it has been stated that a person can either register a proprietary company
which may be limited by shares or unlimited with share capital or a public company which may
be limited by shares, limited by guarantee, unlimited with the share capital or a no liability
company.
There are a few major differences between a public and a Proprietary company. The major
differences are in relation to the way in which they are governed and what rights they have. A
public company is allowed to raise money from the general public by issuing a prospectus and
registering itself with the Australian Securities Exchange as a listed entity. On the other hand
there is no way in which a public company may raise capital from the public. There are also
various tax benefits which are provided while doing business by using a company form of
business structure. The profits of the business are taxed at a fixed rate of 30%. In addition where
the business has suffered any loss in the previous years the taxation system allows the business to
offset such taxes against the profits of the company in future any time they want.

2BUSINESS LAW
Provisions in relation to the name of the company are provided through the provisions of section
147- 156 of the CA. A name to be selected for the company would be deemed as available unless
such name is similar to a name which is registered or reserved under the Act for another
company or similar to a name which is registered on the business names register in relation o
some other body or individual who is not the person applying for the name. The name will also
not be valid if it is not allowed under the regulations. According to section 148 of the CA a
company must have the words limited if it is a public limited company and Proprietary Limited"
in case it is a limited proprietary company. In case the proprietary company is unlimited it must
have the name Proprietary or Pty after it.
Provisions in relation to a registered office are provided under the provisions of section 142 of
the CA. It has been stated that the company has to have a registered office which is located
within the jurisdiction of the CA. The company has to notify the Australian Securities and
Investment Commission about any changes in the registered place in the company. Under section
143 the ASIC have the power of changing the registered address of the company to the address
of the directors. The company must display its registered name at the registered office of the
company.
Under section 210D of the CA it has been provided that the rules of this section will, be breached
in case the person has not provided a signed consent to a company to act as the directors of the
company before actual appointment as a director is carried out. The consent has to be kept by
the company under subsection 210D (2). The company must also provide for the share
certificates in relation to the number of shares held by the directors of the company at the time of
incorporation. The contents of a share certificate have been provided under section 1070C of the