Steps to Incorporate and Register a Company in Australia and Liability of Parent Company and Subsidiary Company

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Contents
Solution 1....................................................................................................................................................2
Issues.......................................................................................................................................................2
Relevant Law...........................................................................................................................................2
Application of law...................................................................................................................................3
Conclusion...............................................................................................................................................3
Solution 2....................................................................................................................................................3
Issue........................................................................................................................................................3
Relevant Law...........................................................................................................................................3
Application of law...................................................................................................................................4
Conclusion...............................................................................................................................................6
Reference List.............................................................................................................................................7

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Solution 1
Issues
To furnish advice to Richard and his sons on the steps that needs to be taken to incorporate and
register a company?
Relevant Law
Company is a business form which is normally pursued by the people who wants to continue
their business in a form so that an artificial legal personality is attained by their business. Once a
company is formed then it is not a natural person but is considered as an artificial person in the
sense that it has all the powers and status of a normal human being but does not have a body and
soul of its own and is held in Salomon v A Salomon and Co Ltd [1897]. Thus, it requires officers
for its working. But, once a company is formulated by following the process of registration, then,
it has the status of a person who has the capacity to purchase property, to sue and be sued, to pay
taxes, to raise capital and is held in Macaura v Northern Assurance Co Ltd [1925]. A company
has unlimited life span and never dies. Also, a company liability is limited in nature, that is, the
members of the company are only obligated to pay to the extent of their unpaid share capital and
nothing is imposed on the personal assets of the members. (Bourne 2016)
But, it is now very important to understand the procedure that needs to be followed in order to
register a company in Australia.
ASIC and the Corporation Act 2001 has laid down the adequate procedure that must be followed
in order to register a company. (Tomasic et. Al 2002)
i. Every person who wants to form a company must first select the type of company
that must be formulated, that is, a company limited by shares, unlimited company,
company by guarantee, public company, special purpose company, etc.
ii. Under section 119 of the Act, when the company is decided then the name of the
company must be decided. The name of the company must be very distinct and must
not match with any other name of the company. If the name is offensive, illegal,
misleading or results in deception on the public then such name are also not allowed.
Also, if the name of the company is including Royal, Bank, Incorporated, etc then it
is required that the government permission is needed;
iii. The management of the company must be decided, that is, the company can be run by
constitution or replaceable rules or both by the replaceable rules and the constitution;
iv. The share capital of the company is also decided that is whether the shares of the
company must be limited or unlimited in nature;
v. Officers of the company must also be appointed by taking consent of the officers.
Every private company must have a company secretary, director and at least one
member;

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vi. A company must have a registered office. If the registered office is not the asset of
the company then the permission of the owner of the property must be taken before
opening the registered office at such property.
vii. When all the requirements are met then Form 201 must be filed with ASIC along with
the requisite fees. When the fees is submitted then the company is registered;
viii. When the company is registered then a certificate is provided along with ACN
number and a corporate Key;
ix. When a company is registered then it is necessary that the company must provide
ACN number on all the company documents.
Application of law
In New South Wales, Hunter Valley region, Richard is dealing in olive groves with 12,000 trees.
He is expanding his business and thus his two sons, Liam and David are intending to involve in
the business in order to help him. Since all the three, that is, Liam, David and Richard are
wishing to expand their business and wants to operate as a company, thus, the due process of
registration must be followed which will register their company and they will acquire the status
of a separate legal entity.
Now, Ridali is the right name that can be kept for the company as it is not similar with any
already exiting name. Also, it does not contain the words royal, bank, incorporated, so there is no
need of any kind of government approval. But the name Rich’s Guaranteed Olives is not a
perfect name as it gives an impression that the company is dealing in olives of the quality that
very rich and this supply of rich olives is guaranteed which is not true. Thus, Ridali is the
appropriate name and not Rich’s Guaranteed Olives.
Conclusion
The right name for the business of Richard is Ridali and they can formulate a company by
following the process of registration.
Solution 2
Issue
Against whom the action can be initiated by Terry for the injuries that are suffered by him,
either, Lazarus Pty Ltd, CMS and/or CM?
Relevant Law
When a company is formulated, then, it is not a natural person but is considered as an artificial
person in the sense that it has all the powers and status of a normal human being but does not
have a body and soul of its own and is held in Salomon v A Salomon and Co Ltd [1897]. Thus, it
requires officers for its working. But, the acts of the company that are carried on by the officers