Company Law: Difference between Company Limited by Shares and Company Limited by Guarantee, Case Ill

Question One: Difference between Company Limited by Shares and Company Limited by Guarantee, and Case Illustration of Not Using Company to Shelter from Criminal Act

(a) Name one difference between a company limited by shares and a company limited by guarantee

(b) Illustrate by reference to a case that a company cannot be used by a person to shelter from a criminal act

(c) Contrast the principles arising from the judgements in each of the following two cases:
 
1. Salomon v Salomon & Co Ltd
2.Green v Bestobell Industries


QUESTION TWO- chapters 3 and 4. The best practice question to use from workshops is the question from workshop One Question Six about “Digger”Only write maximum ¾ page to answer this question

Billy Bob and Angeline decide to set up a tattoo parlour called “Tatts r Us”. They wish to run their business under a company structure and be the only directors and members of the company. They would like to keep the affairs of the company as private and as confidential as possible. Their friend Brad suggests setting up a company with the name “Tatts r Us Ltd”.

The company has a constitution that provides that Antonio Gonzales is appointed master tattooist for life.  Several customers have complained to the directors that they have been suffering from severe rashes and skin infections after having their tattoos drawn at Tatts r Us Ltd by Antonio. The directors discover that Antonio has been using the same dirty needle since he commenced work for the company. The directors decide to remove Antonio as master tattooist and replace him with Fabio. Antonio writes to Tatts r Us Ltd demanding his job back. The company tells Antonio that he has no contract. Antonio buys some shares and writes again stating he now has a contract and wants his job back. The company refuses.

REQUIRED:

(a)Do you agree with Brad’s advice underlined above? Explain
Hint: The best practice question to use from workshops is the question from workshop One Question Six about “Digger”

(b)Discuss whether the company has to reinstate Antonio. Use the Corporations Act and case law in support