Case studies and problem sets
Problem Set 1
The following problems and questions should be answered after you have read Chapters 1 and 2.
1. GML is a public company. Its shares are listed for quotation on the ASX. What does it mean to say that a company is listed? Are all public companies listed on the ASX?
See [¶1-120], [¶1-140] and key terms [¶1-500]
If a public company is listed on the ASX, members of the public can buy and sell securities (such as shares) issued by the company on the secondary market conducted by the ASX. People wishing to buy or sell securities must do so through a broker who is a participant in the ASX.
Listed companies are required to comply with the ASX’s Listing Rules, which impose some additional disclosure and member protection requirements on those companies.
There are about 2,000 Australian entities listed on the ASX. That is a very small percentage of companies overall (about 0.1%). Hence, not all public companies are listed on the ASX – only those companies that go through the application process and meet the listing requirements.
The process of listing and its effect are discussed in greater detail in Chapter 4.
See key terms –
Listed company is a company that has its shares listed for quotation on the Australian Securities Exchange (ASX). This means that members of the public can buy and sell shares in the company through the stock market operated by the ASX. All listed companies are public companies.
Public company is any company that is not a proprietary company. Public companies have wider powers to raise capital from members of the public than proprietary companies, but are subject to more onerous regulation.
2. FWPL is a proprietary company. What is the difference between a public and a proprietary company? Is the size and scale of FWPL’s operations typical of Australian proprietary companies?
See [¶1-380] and key terms [¶1-500]
Around the same time that the decision in Salomon’s case (1897)