Registration & Maintenance of Capital

This report examines the registration and capital maintenance of a no-liability company, using Cuesta Coal as a case study. It details the requirements for registering a no-liability company in Australia, referencing relevant sections of the Companies Act (Sections 117 and 112(2)). The report includes a sample registration form and discusses the doctrine of capital maintenance, covering aspects like dividend payments, capital reduction, and share redemption. The importance of adhering to legal and accounting standards for maintaining capital structure is emphasized, highlighting the potential consequences of non-compliance. The report concludes by summarizing the key legal and practical considerations for managing the capital of a no-liability firm.

STUDENT NAME:
STUDENT ID:
SUBJECT CODE:
ASSIGNMENT TITLE: REGISTRATION AND MAINTAINCE
OF CAPITAL FOR NO LIABITY FIRM
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Table of Content
Overview of the company................................................................................................................3
Part 1 Registration of a non liability organisation...........................................................................3
Filled out form to register a no-liability company...........................................................................3
Part 2 Explanation of the maintenance of doctrine of capital..........................................................4
Reference list...................................................................................................................................6
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Overview of the company
A no liability firm is defined as free from stock exchange price variation. In Australia, a mining
company is totally away from such phenomena. As mining is a risky job, such firms are strictly
directed to be engaged in mining operations without having additional liability. One of the
limited or no liability companies in Australia is Cuesta Coal. It has been operating for around 30
years. The shareholders and investor groups are highly scattered within different fields of mining
industries available in Australia. Cuesta Coal is operating some projects in the basin of
Queensland.
Part 1 Registration of a non liability organisation
Registration of a no liability organisation or charitable or non profit seeking firm means the
liability of the organisation is limited (Franchoo et al. 2016, p.485). Through registration the
company can be introduced as a legal entity as per the companies law. As per section 117 and
112 subsection 2, registration of a no liability company should have to fulfil the below
mentioned criteria (Dennis et al. 2016, p.145).
Filled out form to register a no-liability company
Name of the limited liability company Cuesta Coal
Address of the company Taringa QLD, Australia
Type of organisation for federal taxation Corporation
Address of principle office Queensland
Have you submitted any earlier form in
Queensland?
No
Additional provisions, if any, not inconsistent
with law, which the member elect to have set
forth in these Articles of Organization,
including, but not limited to, any limitation of
the purpose(s) or duration for which the limited
liability company is formed, and any other
provision
None
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No liability company will be managed by The members
Date when these Articles of Organization will
be effective
XX/XX/XXXX
Under penalty of perjury, I declare and affirm that I have examined these Articles of
Organization, including any accompanying attachments, and that all statements contained herein
are true and correct
Date: XX/XX/XXXX Signature:
Section 117: As per the section 117, it has been mentioned about “Resolutions and Agreements
to be filed” that was effective from 1st April, 2014 for non liability firms i.e. mining companies.
● As specified in the section 102 (3), a report of every resolution and agreements of all
matters should have to be published in the meeting within thirty days of preparation of
the resolution effectively.
● In this regard it should have to be considered that if an organisation fails to publish such
resolution, then the organisation shall be punished with certain fines of around five lakhs
in which it also can be included liquidation of the firm (Risso, 2016, p.254). Therefore
special resolutions containing organisational purposes, board of directors of the company,
their appointment, renewal will be included appropriately.
Section 112 (2): As per the companies act, in the section 112 (2), it has been specified that a non
liability company can be registered under this section such as Australia based Cuesta Coal. An
official like president or governor of Australia being a member of the company can appoint any
member in the company, if it is found that the person is appropriate for such role and this should
have to be done in the general meeting or company representatives and members (Cox and
Hazen, 2016, p.327). In this regard it should have to be considered that Cuesta Coal should have
to fulfil such criteria in order to register under no liability company.
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Part 2 Explanation of the maintenance of doctrine of capital
Doctrine for the maintenance capital including the share capital, Loan capital, Preference share
capital, capital lease that should have to be considered properly by the management team and
board of directors of a firm is an integral part in order to maintain operations (Percival et al.
2013. p.125).
British law has developed the doctrine for maintaining capital by every organisation for the
purpose of viewing capital structure of companies with capital issue and rising of capital, returns
to the shareholders as per company profits should have to be considered effectively (Arnold,
2016, p.19).
Important areas of this doctrine are mainly payment of dividends to the preference and equity
shareholders, reduction of capital structure and retained earnings, redemption of shares. These
are the legal rules and regulations for doctrine of maintaining capital. As per the accounting rules
and standards a company should have to structure and maintain their capital properly. It is also
said that “a company cannot, without the leave of the court, have to return its capital to the
investors or shareholders” (Li, 2016, p.105). Therefore, Cuesta Coal should have to maintain
capital structure properly in order to return the liabilities of the shareholders and investors
appropriately.
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Reference list
Arnold, A.J., 2016. Capital reduction case law decisions and the development of the capital
maintenance doctrine in late-nineteenth-century England. Accounting and Business Research,
pp.1-19.
Cox, J. and Hazen, T., 2016. Business organizations law. West Academic.
Dennis, M. and Ramos, J.M.P., 2016. II. SIMPLIFIED COMPANY: CREATING AN
ENABLING LEGAL ENVIRONMENT FOR MICRO-, SMALL-, AND MEDIUM-SIZED
ENTERPRISES: SIMPLIFIED INCORPORATION AND REGISTRATION. Ariz. J. Int'l &
Comp. Law, 33, pp.71-301.
Franchoo, T., Baeten, N. and Baker, J., 2016. The Application of European Competition Law in
the Financial Services Sector. Journal of European Competition Law & Practice, 7(7), pp.483-
500.
Li, X., 2016. Introduction to the Reform of the Corporate Capital System of Chinese Corporation
Law and Some Reflections. Ariz. J. Int'l & Comp. L., 33, p.105.
Percival, R.V., Schroeder, C.H., Miller, A.S. and Leape, J.P., 2013. Environmental regulation:
Law, science, and policy. Wolters Kluwer Law & Business.
Risso, G., 2016. Investor Protection in Credit Rating Agencies' Non-Contractual Liability: The
Need for a Fully Harmonised Regime.
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