Registration of No Liability Company under Corporations Act 2001

This article discusses the process of registering a No Liability Company under the Corporations Act 2001 in Australia. It covers the criteria that need to be fulfilled, such as the type of company, proposed name, details of directors and secretaries, and more. The article also highlights the strict liability offenses related to non-compliance with the registration process. Additionally, the article provides an overview of the Royal Commissions Act 1902 and the powers of a royal commission in Australia.

Law of Business Organisation
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Table of Contents
Part A.........................................................................................................................................3
Part B..........................................................................................................................................5
References..................................................................................................................................7
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Part A
The Corporations Act 2001 considers it as obligatory in order to register a company in
Australia that the application for registration is filed. Section 117 of the Corporations Act
2001 requires a person to lodge an application with Australian Securities & Investments
Commission (ASIC). The process of registration of the company is based on the type of
company. According to Section 112 (1) of the Act, No liability company can be registered
under ASIC. Under Section 112 (2) of the Act, a company can be registered as a No liability
company, if it has a share capital, its one and only objects are the mining purposes and its
constitution allows no contractual right for the recovery of calls regarding its shares from the
shareholders failing to pay them.
At the time of applying for registration, according to Section 117 (2), the contents of the
application must state following points;
 Type of company to be registered
 Proposed name for company
 Name and address of each and every individual who show their consent to become a
member
 Details of individuals who show their consent in writing to become a director, which
include their family names, date of birth and place of birth
 Details of individuals who show their consent in writing to become a company’s
secretary, which include their family names, date of birth and place of birth
 Address of each and every person who provide their consents in writing to become
company’s secretary and director
 Address of proposed registered office of the company
 Proposed opening hours of the registered office for public company in case of no
standard opening hours
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 Address of proposed principal place of business in case of no proposed registered
office
 A public company limited by shares or an unlimited company, shares being issued
for non-cash consideration, prescribed particulars regarding the issue of shares
unless shares issued under written contract and copy of contract is filed with the
application
According to the Corporations Act 2001, Section 147 states that a name is available for a
company unless the name is identical to a name already registered under this Act or
unacceptable for registration under the regulations. Subsection (2) states that identical or
unacceptable name can also be provided to the company with the consent of the minister in
writing. In case of company breaching any condition, ASIC may direct the company to
change its name under section 158.
Section 148 is about the name of the company which requires it to use available name or
“Australian Company Number” or ACN. For No liability company, according to subsection
(4) of Section 148, the company must use word “No Liability” at the end of its name. Non-
compliance with the procedures is considered as an offence of strict liability (Austlii, 2001).
Section 149 is related to the acceptable abbreviations to be used by the companies in their
names. Subsection (1) mentions a set of abbreviations to be used by the companies instead of
words required by the Act, as the name of the company or to be included in the document or
on the common seal of the company. The abbreviations should be used instead of words
being the part of the name of the company and it should be used with or without full stop.
The acceptable abbreviations for No Liability Company is ‘NL’.
Section 201A mentions about the minimum number of directors to be essential in a company.
In this context, proprietary companies must have a minimum of one director and he or she
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must generally be residing in Australia. However, public companies must have a minimum of
3 directors, out of which 2 must reside in Australia.
Section 204A is related to the minimum number of secretaries in public or proprietary
companies. In proprietary companies, there is no requirement of secretary but, if it possesses
one or more, at least one of the secretaries must reside in Australia. On the other hand, in
public companies, there must be at least one secretary and one of the secretaries must be
residing in Australia. The non-compliance of this section leads to an offence of strict liability
and taken into consideration under Criminal code of Australia.
So, in order to register a No Liability Company under ASIC, it is essential to fulfil all these
criteria and failing to meet any one of these criteria might lead to strict liability. Furthermore,
other sections of the Corporation Act 2001 should also be kept in mind while applying for
registration of a company in Australia, because this Act is all about how to carry on business,
basic features of company, technical provisions, replaceable rules and constitution of
company, registers, employees and all the aspects related to the company. So, all the sections
should be considered as and when required in the process of registration of the company.
Part B
1. Royal commissions have been in existence in Australia since 1902 and were established
by the Parliament of Australia. In the Australian system of government, royal commission
is considered to be as the highest form of inquiry on issues related to public importance.
The royal commissions are established under Royal Commissions Act 1902 (Cth) and
commissioners are appointed to conduct inquiries in accordance with the approval by the
Governor General (The New Daily, 2018).
2. The powers of a royal commission are wide ranging from information gathering to
providing assistance with investigations as well as inquiries. Occasionally, such powers
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are also considered as coercive powers, as it can compel an individual to participate in the
inquiry. The Royal Commission possess the power summon witnesses and to be
interrogated under oath or affirmation. The witnesses might also be required to produce
evidential proofs or documents before the commission and failure to comply with the
summons issued by the commission might result in an individual receiving fine or in
some circumstances, imprisonment as well. There is a provision of penalty for conviction
with a fine of A$1000 or imprisonment for six months in case of failure in compliance
with the orders of the royal commission. Additionally, the royal commission might also
empower the Australian Federal Police to issue search warrants.
3. The Royal Commission into Misconduct in the Banking, Superannuation and Financial
Services Industry is the full name of the banking royal commission. It is also known as
Hayne Royal Commission.
4. The banking royal commission established in 2017 by the government of Australia, under
Royal Commission Act 1902, in order to deal with the matters of misconduct in banking,
superannuation and financial service industry.
5. The banking royal commission was created by the government of Australia.
6. In December 2017, Justice Kenneth Hayne was appointed as the sole commissioner for
the royal commission because royal commission are usually run by individuals having
legal background. Thus, the government appointed Justice Hayne, because he has been a
justice of the High Court for more than 17 years.
7. The banking royal commission must report on misconduct in the banking, superannuation
as well as financial service industry. As per the Royal Commission Act 1902, they are
associated with peace, order and good governance of the Commonwealth or any kind of
public purposes and powers of the Commonwealth. Presently, the royal commissions play
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a significant role in investigating the misconduct in various sectors such as in financial
sector, home insulation, child protection, drug trafficking and many more.
8. In December, 2017, the Governor General issues Commonwealth letters patent to appoint
the commissioner as well as the terms of reference of the commission. The establishment
of royal commission was supported by the opposition, but labor disagreed with the terms
of reference. They demanded the government to consult with the consumer groups and to
those who were affected due to the financial scandals. In the meantime, the terms of
reference of the banking royal commission required to be widened.
References
Austlii, 2001. Corporations Act 2001. [Online] Available at:
http://www5.austlii.edu.au/au/legis/cth/consol_act/ca2001172/ [Accessed 17 September
2018].
The New Daily, 2018. Royal commissions: How the system works in Australia. [Online]
Available at: https://thenewdaily.com.au/news/national/2018/04/26/royal-commissions-
australia-system/ [Accessed 15 September 2018].
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