BuS200 Project 2: No Liability Companies and Royal Commission

This report is divided into two main parts. The first part focuses on the registration process of a No Liability Company in Australia, as per the Corporations Act 2001. It details the requirements for registration, including the company's objects, share capital, and application procedures. The second part of the report examines the Royal Commission, specifically the Royal Commission into Misconduct in Banking, Superannuation and Financial Services Industry. It discusses the powers of the Royal Commission, its establishment, commissioner, terms of reference, and the submission of reports. The report references relevant legislation and academic sources to support its analysis.

BuS200 2nd project 0218

Table of Contents
PART 1: REGISTER A NO LIABILITY COMPANY...................................................................1
PART 2............................................................................................................................................3
ROYAL COMMISSION............................................................................................................3
POWERS OF ROYAL COMMISSION.....................................................................................3
BANKING ROYAL COMMISSION.........................................................................................4
ESTABLISHED..........................................................................................................................4
IMPLEMENTED BY..................................................................................................................4
COMMISSIONER......................................................................................................................4
REPORT SUBMISSION............................................................................................................4
TERMS OF REFERENCES.......................................................................................................4
REFERENCES................................................................................................................................6

PART 1: REGISTER A NO LIABILITY COMPANY
A No Liability company is an organisation under the Corporation Act 2001 of Australia,
states objects that it is not entitled for call of unpaid issue price of shares. They can be used only
where main activity of company is that of mining or oil exploration (McQueen, 2016).
As per sec 112(2) a company may be registered as No Liability Company, if:
 company has a share capital
 have no contractual rights under its constitution for recovering calls made on its shares
from shareholders
 its sole objects are mining
Applying for registration (Sec. 117 (1) & (2) Corporation Act 2001)
 Application lodging
1. To register company owner must lodge application with ASIC (Australian
Securities and Investment Commission).
 Contents of application
1. Type of company to be registered under this act.
2. Company's proposed name
3. Consent Members' name and address.
4. Directors' family name, place and date of birth who consent in writing to become a
director.
5. Company secretarys' family name, place and date of birth, who consent in writing to
become a company secretary.
6. Address of proposed registered office or principle place of business, if it is not the
address of proposed registered office.
7. Number & class of shares, that each member have agreed in writing to take up.
8. Amount agreed by each members in writing to pay for each share.
9. Wheter or not, while registration company will have an ultimate holding company
1. name of the ultimate holding company
2. if ultimate holding firm is registered in Australia, then its ABN, ACN or ARBN.
3. If it is not registered in Australia, then place of its incorporation.
10. State or territory in jurisdiction in which company to be registered.
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11. If shares will be issued for non cash consideration
 Minimum number of Directors (Sec. 201A):
◦ Proprietary companies: Must have at least 1 director. They must be original residents
of Australia.
◦ Public companies: At least 3 directors. From which at least 2 must be resident of
Australia.
 Minimum number of secretaries (Sec. 204A):
◦ Proprietary companies: Not required, if it does have 1 or more secretaries, at least 1
of them must reside in Australia.
◦ Public companies: Must have at least 1 secretary. At least 1 of them must reside in
Australia.
 When a name is available (Sec 147):
◦ Name is available to company unless the name is:
▪ identical to name that is reserved or registered under this Act,
▪ identical to name held or registered on Business name register
▪ unacceptable for registration under this Act's regulations
◦ Minister's consent on subject to conditions, if it is been breached, under sec 158 ASIC
may change its name.
◦ A particular unacceptable name is available to company, specified by regulations if:
▪ A specific public authority or agency of Crown in right of Commonwealth,
internal territory or state has consent in using the name.
▪ Company is otherwise permitted to use name by or under, act or specified
provision of commonwealth, state or territory.
 Company's name (Sec 148):
◦ Company may have as its name:
▪ Available name
▪ Expression “Australian Company Number” along with its ACN.
▪ No Liability firm must have the word “No Liability” at end of their name. For
example- XYZ No Liability company.
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 Acceptable Abbreviations (Sec 149):
◦ Abbreviations set out may be used:
▪ Rather than words that this act needed to be part of company's name or must be
included in documents or firms common seal.
▪ Alternative to words that are portion of company's name
▪ with or without full stops.
◦ “NL” should be used as abbreviation for No Liability company. Example – XYZ NL
company.
PART 2
ROYAL COMMISSION
It is a major ad-hoc formal public inquiry for defined issue in some monarchies. They
involve research into issue, consultation with experts outside or within government and
consultation with public (Beck and Paton, 2018).
The commission is set up by Head of State (Sovereign or his/her representative i.e., a
governor-general or governor) from advice of government and appointed formally by letters
patent, an official written order from president or head of state. Royal commission was set up
under Royal Commission Act 1902. Since 1902 there were 135 royal commissions established.
Such as Royal commission into misconduct in Banking, Superannuation and Financial service
industry.
POWERS OF ROYAL COMMISSION
Under Royal Commission Act 1902, or under commonwealth and state laws,
commissioners are allowed to act in multiple capacities, or perform functions to conduct an
inquiry.
 Coercive powers: Royal commission have broad powers for collecting information to
assist them with inquiries and investigations. They have powers to:
◦ Orders witness for appearing before them and answer questions under oath or
avouchment.
◦ Summons witness to produce a document or other piece of evidence before them
(Royal commission, 2018).
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BANKING ROYAL COMMISSION
Its full name is Royal Commission into Misconduct in Banking, Superannuation and
Financial Services Industry.
ESTABLISHED
It was established on 14 December 2017.
IMPLEMENTED BY
It was created by His Excellency General the Honourable Sir Peter Cosgrove AK MC
(Retd.) Governor-General of Commonwealth of Australia (Banking Royal commission, 2018).
COMMISSIONER
Honourable Kenneth Madison Hayne AC QC, was appointed as commissioner through
letters patent issued by Governor-General.
REPORT SUBMISSION
Commissioner has to submit an interim report till 30 September 2018, and provide a final
report by 1 February 2019.
TERMS OF REFERENCES
There are twelve reference terms given to the Banking Royal Commission. Which
includes, any conduct by financial services entities which have amounted for misconduct.
Practices, conducts, business activities or behaviour that falls below community expectations and
standards. Use of superannuation members' retirement savings by financial services for any
purpose, not in the best interest of those members. Effectiveness of redressing mechanisms for
consumers of financial services. Adequacy of existing policies and laws of commonwealth
related to provision of banking, superannuation and financial services (Terms of Reference,
2018). Internal systems, and form of industry self regulation, including industry codes of
conduct, etc.
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REFERENCES
Beck, J. and Paton, G., 2018. Corporate law: The Royal Commission: Corporate culture
spotlight: Where is all this heading?. Governance Directions. 70(6). pp.351.
McQueen, R., 2016. A Social History of Company Law: Great Britain and the Australian
Colonies 1854–1920. Routledge.
Online
Banking Royal commission. 2018. [Online] Available through:
<https://financialservices.royalcommission.gov.au/Pages/default.aspx>
Royal commission. 2018. [Online] Available through:
<https://thenewdaily.com.au/news/national/2018/04/26/royal-commissions-australia-
system/>
Terms of Reference. 2018. [Online] Available through:
<https://financialservices.royalcommission.gov.au/Documents/Signed-Letters-Patent-
Financial-Services-Royal-Commission.pdf>
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