Company Law Assignment 1
Company Law: Assignment
1. Advise Sarah and Jane of the advantages and disadvantages of operating their business:
a. Separately
b. Sarah Jane Pty Ltd
c. Sarah Jane Ltd
Separately
-less cost to set up the business
-easy to comply with legal requirement under the corporation act
Disadvantages:
-you are there on your own unlimited unlimited liability her own asset could in danger as the result of breaches in contract and in tort
The advantage of Sarah Jane Pty Ltd:
Sarah, Jane and their employees of a company are separate legal entity to the Sarah Jane Pty Ltd therefore, it allows Sarah, Jane and employees to have contracts with their own company.
It could help to limited tax liability if Sarah and Jane paying their tax at the highest personal marginal tax rate at 45 cent in every dollar, but company tax at 30 cent on flat rate.
Sarah and Jane have limited liability for the company’s debts
It could probably easy for Sarah and Jane to sale their company’s shares or transfer of the shares to the third party. Asset sale and shares sale
Sarah Jane Pty Ltd is a separate legal entity so that it can owns its own asset, such as property, cars and equipment…etc. and also perpetual succession
Sarah Jane Pty Ltd can sue and be sued in its own name,
The disadvantage of Sarah Jane Pty Ltd:
There is significant costs involved when setting up the company
Sarah Jane Pty Ltd may require to submitted annual report through (ASIC) and also it can be required to undertake an obligation audit and their company financial affair could be public.
As a directors of the company Sarah and Jane would be actively inspected by ASIC. Director of the company have many duties (director’s duties) under the corporation act.
Reduction in flexibly in term of the company arrangement.
Advantages of Sarah Jane Ltd
Fund raising through the sales of shares in the company to the public
Disadvantages:
-ASX listing rule which are more demanding than rule under the corporation act
QUESTION 2
1. Advise Sarah and Jane of the advantages and disadvantages of operating their business:
a. Separately
b. Sarah Jane Pty Ltd
c. Sarah Jane Ltd
Separately
-less cost to set up the business
-easy to comply with legal requirement under the corporation act
Disadvantages:
-you are there on your own unlimited unlimited liability her own asset could in danger as the result of breaches in contract and in tort
The advantage of Sarah Jane Pty Ltd:
Sarah, Jane and their employees of a company are separate legal entity to the Sarah Jane Pty Ltd therefore, it allows Sarah, Jane and employees to have contracts with their own company.
It could help to limited tax liability if Sarah and Jane paying their tax at the highest personal marginal tax rate at 45 cent in every dollar, but company tax at 30 cent on flat rate.
Sarah and Jane have limited liability for the company’s debts
It could probably easy for Sarah and Jane to sale their company’s shares or transfer of the shares to the third party. Asset sale and shares sale
Sarah Jane Pty Ltd is a separate legal entity so that it can owns its own asset, such as property, cars and equipment…etc. and also perpetual succession
Sarah Jane Pty Ltd can sue and be sued in its own name,
The disadvantage of Sarah Jane Pty Ltd:
There is significant costs involved when setting up the company
Sarah Jane Pty Ltd may require to submitted annual report through (ASIC) and also it can be required to undertake an obligation audit and their company financial affair could be public.
As a directors of the company Sarah and Jane would be actively inspected by ASIC. Director of the company have many duties (director’s duties) under the corporation act.
Reduction in flexibly in term of the company arrangement.
Advantages of Sarah Jane Ltd
Fund raising through the sales of shares in the company to the public
Disadvantages:
-ASX listing rule which are more demanding than rule under the corporation act
QUESTION 2