Law of Business Association Assignment PDF

   

Added on  2021-06-17

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LAW OF BUSINESSASSOCIATION[Pick the date]
Law of Business Association Assignment PDF_1
LAW OF BUSINESS ASSOCIATIONQuestion 1IssueThe primary issue to be resolved under the given scenario is to outline if an enforceable contract hasbeen enacted between John and the company (i.e. Motorbikes Pty Ltd) in relation to motorcyclesale. The applicable clauses of Corporations Act 2001 (Cth) would be considered for this discussion.Relevant RuleThe company business structure is unique owing to the possession of a separate legal entity asmentioned in s. 124(1) Corporations Act 2001. However, despite having a legal entity, there is stillrequirement of an authorised agent who should execute contract on company’s behalf sincecompany cannot do the same. However, the contracts cannot be enacted by any entity and hencepower is vested in namely two entities1.The company directors along with the company secretary are authorised personnel who must act in accordance with provisions outlined in the constitution of company.A particular agent who possesses the require authority as delegated by the directors so as tocarry the business affairs and hence enact contract within the scope of authority.In relation to document execution by the directors, adherence to s. 127 is of critical importance. It isnoteworthy that the legal documents on company’s behalf can be executed with company seal orwithout company seal and hence there are two subsections contained in s. 127 which tend to outlinethese two scenarios. s. 127(1) deals with the situation where document execution is completedwithout company seal while the situation where company deal is used for document enactment ishighlighted by s. 127(2)2.As outlined in s. 127(1), a legal document without common seal (also called as company seal) can beenacted through the signature of a particular combination from the following choices available3.Two directors ; orOne director and the company director; orIn cases related to proprietary company, it might be possible that the company director andcompany secretary may be one individual and signature of this individual alone would alsosuffice.However, if there is use of common seal, then s 127(2) advocates that one out of the combinationsoutlines above must sign in the capacity of witness. For Australian companies, the common mode ofdocument execution is without the use of company seal and hence s. 127(1) would apply n such1Barkoczy,Stephen, Foundation of Taxation Law 2015, (North Ryde, CCH, 2015)2Marc Hertz, ‘Importance of execution of contracts by companies’, Thomson Reuters CLEARDOCS (online), February 2015<https://www.cleardocs.com/clearlaw/company-registration/execution-of-contracts.html> 3Amanda Seaton and Jarrod Wilksch ‘Putting pen to paper – execution under section 127’, Johnson Winter & Slattery(online), July 2015 < https://www.jws.com.au/en/acumen/item/660-putting-pen-to-paper-execution-under-section-127>
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