Australian Corporations Law
AUSTRALIAN CORPORATIONS LAW
Question 1
I THE PROCEDURE BY WHICH A COMPANY CAN BE FORMED
The formation of a company, known as incorporation, is achieved ‘by a process of registration controlled by the Australian Securities and Investments Commission.’
A Pre-registration Requirements
The pre-registration requirements are:
• The selection of the classification and type of company
• The selection of a company name, this is optional
• Completion of the application of registration using form 201
• Lodgement of the application with ASIC
1 Classification and Type of Company
(a) Company Classifications
There are two company classifications, proprietary and public.
Most Australian companies are proprietary limited companies because this classification and type suits the needs of most businesses.
(i) Reasons to Choose a Proprietary Company
A proprietary company by comparison to a public company has simpler and therefore lower cost reporting obligations, is limited to 50 non employee shareholders’, ‘and between 1 to 50 members’ , a public company can have more.
A proprietary company requires a minimum of one director a public company requires a minimum of three directors. The director or directors of proprietary company must ordinarily reside in Australia and be 18 years of age or older. A public company can be listed on the stock exchange and raise funds directly from the public by offering shares or debentures for sale’ a proprietary company cannot, however a proprietary company can offer shares to existing shareholders or employees.
(b) Company Types
There are two types of proprietary companies, companies limited by shares and companies unlimited with share capital.
(i) Reason to Choose a Company Limited by Shares
In the event that a company limited by shares does not have sufficient assets to meet its debts, each member is only liable for the amount, if any, that remains unpaid on their shares ,
Question 1
I THE PROCEDURE BY WHICH A COMPANY CAN BE FORMED
The formation of a company, known as incorporation, is achieved ‘by a process of registration controlled by the Australian Securities and Investments Commission.’
A Pre-registration Requirements
The pre-registration requirements are:
• The selection of the classification and type of company
• The selection of a company name, this is optional
• Completion of the application of registration using form 201
• Lodgement of the application with ASIC
1 Classification and Type of Company
(a) Company Classifications
There are two company classifications, proprietary and public.
Most Australian companies are proprietary limited companies because this classification and type suits the needs of most businesses.
(i) Reasons to Choose a Proprietary Company
A proprietary company by comparison to a public company has simpler and therefore lower cost reporting obligations, is limited to 50 non employee shareholders’, ‘and between 1 to 50 members’ , a public company can have more.
A proprietary company requires a minimum of one director a public company requires a minimum of three directors. The director or directors of proprietary company must ordinarily reside in Australia and be 18 years of age or older. A public company can be listed on the stock exchange and raise funds directly from the public by offering shares or debentures for sale’ a proprietary company cannot, however a proprietary company can offer shares to existing shareholders or employees.
(b) Company Types
There are two types of proprietary companies, companies limited by shares and companies unlimited with share capital.
(i) Reason to Choose a Company Limited by Shares
In the event that a company limited by shares does not have sufficient assets to meet its debts, each member is only liable for the amount, if any, that remains unpaid on their shares ,
Bibliography: A Articles/Books/Reports Ciro, Tony, Chris Symes, Ann O 'Connell and Ted Woodward, Corporations Law: In Principle, (2009, 8th edn, Lawbook Co, Australia) Tomasic, Roman, Stephen Bottomley, Rob McQueen, Corporations Law in Australia (2002, 2nd edn, Federation Press, Australia) B Cases Bay v Illawarra Stationary Suppliers Pty Ltd (1986) 4 ACLC 429 Kelner v Baxter (1866) LR 2 CP 174 Feerick, Thomas, Law of Associations 200018 Lecture 6, Pre-registration Contracts and Internal Governance Rules, (School of Law, UWS, 2002) ATTACHMENTS