Get Instant Help From 5000+ Experts For
question

Writing: Get your essay and assignment written from scratch by PhD expert

Rewriting: Paraphrase or rewrite your friend's essay with similar meaning at reduced cost

Editing:Proofread your work by experts and improve grade at Lowest cost

And Improve Your Grades
myassignmenthelp.com
loader
Phone no. Missing!

Enter phone no. to receive critical updates and urgent messages !

Attach file

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

Guaranteed Higher Grade!
Free Quote
wave
Answers:
Question 1
Issue
  1. What steps should be taken by Richard to incorporate a company with David and Liam?
  2. What is the appropriate name of the company, Ridali or Rich’s Guaranteed Olives?
Applicable law

A company is an entity which has a separate legal personality in law.  A registered company have several advantages, such as, the liability is limited, tax gain, capital can be raised easily, transferability of shares, etc. Thus, in order to achieve these advantages there is a need for the registration of the company. (Rambarran 1995)

There are various steps that are laid down by ASIC for the registration of the company. The same are; (ASIC 2017)

  1. The first step is to select the kind of company that the person intended to operate. In Australia a company can be private or public. A public company requires various additional procedure and is a consuming task. Whereas a person can create a private company and the liability of the shareholders is limited to the extent of their shareholdings.  (James 2008)
  2. Once a company is selected then it is necessary that a company name must be selected. A person can keep any kind of name but it is necessary that the name should not be similar with any another name or is offensive, misleading, contains words such as Royal, Consumer, Bank requires prior approval from the government. Further, the name so selected does not have any kind of association with any government authority.
  3. The company name once selected, then, the next task is to decide as how the internal management should be governed with. The company can be government with the help of self written rules in the form of constitution or by relying on the replaceable rules of the corporation act 2001 or by both; (Tomasic, Bottomley, ‎McQueen2002)
  4. The share details of the shareholders that is how must capital is paid, unpaid  etc must be provided to the Australian securities and investment commission;
  5. Further, when the company appoints the officers in the company then it is necessary that such officers must be acquainted with the obligations that they need to comply with. Some of the obligations include that they have to keep the financial statements of the company up to date, that any changes must be notified to ASIC, that they must comply with their statutory duties, etc.;
  6. Further, the company prior appointing any person must seek consent of the office holder. For instance, every company should have at least one director and if there is more than one director than at least one should reside in Australia. Also, a company must have at least one member. A company may have a secretary and if the company does keep a secretary then he must reside ordinary in Australia;
  7. A company must have a registered office and if the office is not owned by the company then the prior permission of the property owner must be taken before such property is considered to be registered office of the company;
  8. Once all these requirements are met then it is necessity that Form 201 must be lodged with ASIC for the registration of the company along with the application fees;
  9. Once the company is registered by ASIC then the company receives a certificate, ACN number and a corporate key;
  10. Even when the company is registered it is necessary that post registration, the name of the caiman must be displayed, that the ACN number must be placed on all the company documents and the company details must be updated.
Application of law and conclusion

It is submitted that Richard is acting as a sole trader. He now wants to establish his business along with his two son’s, David and Liam. They require capital for expansion and also needs tax benefits. These requirements can only be met by incorporating a company. Their liability will be limited.

Further, Ridali is the appropriate business name that must be kept as it is distinct and not offense. Whereas the name Rich’s Guaranteed Olives, is misleading as it portrays an image that there are guarantee olives that are sold by Rich which is not true.

Thus, a company with name Ridali is the right choice.

Question 2
Issues

Can any action be brought alginate Lazarus Pty Ltd, CMS or CM by Terry?

Applicable law

A company is an entity which has a separate legal personality in law.  In the leading case of Salomon v A Salomon and Co Ltd [1897] and Lee v Lee's Air Farming Ltd [1960], it was held by the courts that every company is a person (artificial) in law and acquires all the rights and liabilities that of a natural person. A company can act like a normal person and thus has all the capacity to establish contract, to purchase property, to sue in contracts, etc. The concept of separate legal personality signifies that the company officers must be construed as distinct that from the company and the actions that are taken by these officers should be made obligatory upon the company. The actions will not affect the interest of the officers as the officer’s acts like the agent of the company and thus the act carried out by such officers as agents of the company will make the company binding. This distinction of officers and the company is because of the veil that is established amid the company because of the presence of separate legal entity.

But, the veil of the company is not a very static phenomenon and the courts are willing to pierce the veil of the company on several occasion. There are few occasions where the veil is considered to be pierced: (Cassidy 2006)

  1. When a company is established by the persons with the intention to deceive or incur fraud then the courts have disregarded the corporate veil structure of such company. In such situation, the courts has considered the creators of the company and the company as one and any action that is carried out by the officers in the name of the company will upon the officers and they must be held personally liable for the same and is held in Creasey v Breachwood Motors Ltd [1993].
  2. When the subsidiary of the company is established then the acts of the subsidiary are its own acts and the holding company are not responsible for the same as they are two different in the eyes of law and every entity is an artificial legal person. But, when any tort is committed by a subsidiary company where the acts of the subsidiary company is governed under the directions of the holding company, then, in such cases in order to bring justice the veil is pierced ad the subsidiary and the holding company are treated as one and the liability that arose because of the acts of the subsidiary company falls upon the holding company and is held in CSR Ltd v Young [1988].
  3. Also, when the acts of the subsidiary company is totally guided, control and directly by the holding company then the subsidiary company is considered to be the agent of the holding company and the acts of the subsidiary company will be honored by holding company and the veil is pierced amid the two and is held in Smith, Stone & Knight Ltd v Birmingham Corp [1939].

Further, when the shareholders do not bring any proceedings against the wrong that is incurred by the company, then, the employees has the power to bring proceedings against the defaulting company under section 236 and section 237 of the corporation Act 2001 and is called statutory derivative action. An employee is authorized to bring the statutory derivative proceedings under section 82A of the Act. The proceedings can be brought against the company when the employee is acted with honesty, it is in the best interest of the company and the shareholders are not willing to bring any proceedings against the company. The court can wound up the company if fond to be in violation of section 236 and section 237 of the Act.  (Hoffman 2005)

Application of law and conclusion 

It is submitted that CMS is the subsidiary of CM as CM holds 10 shares out of 200 of CMS. CM leases all of the mining equipment and then subleases the equipment to CMS. The acts of the CMS is presumed to be governed by the directions of CM. now, recently CMS’s mining activities have contaminated a nearby river which supplies the water to the 2 mine and Gunbarrel and number of Gunbarrel residents and former employees, including Terry, have contracted cancer because they drank the contaminated water. Now, the acts of CMS is a tortuous wrong and thus in the interest of justice it is necessary that the acts of CMS mus6t be construed as the acts of CM as CMS is acting as an implied agent of CM.

Thus, the liability that is imposed by Terry must be borne by CM.

 It is submitted that the shareholders of CMS call a general meeting with the main intention that to avoid the liabilities that arise because of the residents of Gunbarrel and Terry. They unanimously decided that all the shares of CMS should be sole and a new company should be formulated in the name of Lazarus Pty Ltd.

It is submitted that the creation of Lazarus Pty Ltd is solely based on escaping the liabilities that arose because of the loss that is caused to residents of Gunbarrel and Terry. But, this creation of the new company is an act of fraud so that CMS can escape the liability.

Thus, the veil amid the shareholders of CMS and Lazarus Pty Ltd should be pierced and action should be taken and Lazarus Pty Ltd should be disregard.

Position of CMS

 It is submitted that CMS’s mining activities have contaminated a nearby river which supplies the water to the 2 mine and Gunbarrel. Thus, it is the duty of the shareholders of CMS to bring an action against the company. However, if no action is taken by the shareholders of CMS, then, Terry has right to bring statutory derivative action against CMS under section 236 and section 237 of the Act. Terry must prove that brings derivative action is in the best inters of the company and that he is acting in good faith, he is eligible to bring an action under section 82A of the 2001 Act and thus CMS can be wound up because of the wrongful actions of CMS.

Reference List

Melissa, H., 2005, The Statutory Derivative Action in Australia: An Empirical Review of its Use and Effectiveness in Australia in Comparison to the United States, Canada and Singapore. Bond University.

Julie, C., 2006, Concise Corporations Law, Federation Press, 2006 -.

Rambarran, M., 1995, An Introduction to Company Law in the Commonwealth Caribbean, Canoe Press, University of the West Indies.

Tomasic, R, Bottomley, S,  ‎McQueen, R., 2002, Corporations Law in Australia, Federation Press.

Creasey v Breachwood Motors Ltd [1993] BCLC 480.

CSR v Young, (1998).

Lee v Lee's Air Farming Ltd [1960] UKPC 33

Salomon v A Salomon and Co Ltd [1897] AC 22.

Smith, Stone and Knight v Birmingham Corporation (1939)

ASIC, 2017, Steps to register a company, viewed 8th October 2017 from http://asic.gov.au/for-business/registering-a-company/steps-to-register-a-company/.

James, 2008, Six Different Types Of Public And Proprietary Companies, viewed 8th October 2017 from, http://www.jamescox.com.au/six-different-types-of-public-and-proprietary-companies/.

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2022). COMMLAW7012 Business And Corporations Law Essay.. Retrieved from https://myassignmenthelp.com/free-samples/commlaw7012-business-and-corporations-law/guaranteed-olives.html.

"COMMLAW7012 Business And Corporations Law Essay.." My Assignment Help, 2022, https://myassignmenthelp.com/free-samples/commlaw7012-business-and-corporations-law/guaranteed-olives.html.

My Assignment Help (2022) COMMLAW7012 Business And Corporations Law Essay. [Online]. Available from: https://myassignmenthelp.com/free-samples/commlaw7012-business-and-corporations-law/guaranteed-olives.html
[Accessed 28 March 2024].

My Assignment Help. 'COMMLAW7012 Business And Corporations Law Essay.' (My Assignment Help, 2022) <https://myassignmenthelp.com/free-samples/commlaw7012-business-and-corporations-law/guaranteed-olives.html> accessed 28 March 2024.

My Assignment Help. COMMLAW7012 Business And Corporations Law Essay. [Internet]. My Assignment Help. 2022 [cited 28 March 2024]. Available from: https://myassignmenthelp.com/free-samples/commlaw7012-business-and-corporations-law/guaranteed-olives.html.

Get instant help from 5000+ experts for
question

Writing: Get your essay and assignment written from scratch by PhD expert

Rewriting: Paraphrase or rewrite your friend's essay with similar meaning at reduced cost

Editing: Proofread your work by experts and improve grade at Lowest cost

loader
250 words
Phone no. Missing!

Enter phone no. to receive critical updates and urgent messages !

Attach file

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

Plagiarism checker
Verify originality of an essay
essay
Generate unique essays in a jiffy
Plagiarism checker
Cite sources with ease
support
Whatsapp
callback
sales
sales chat
Whatsapp
callback
sales chat
close