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LAW OF ASSOCIATIONS LECTURE 5

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LAW OF ASSOCIATIONS LECTURE 5. LAW EXTENSION COMMITTEE. THESE SLIDES. These slides are an adjunct to, and not a substitute for, the printed notes. REGISTERING A COMPANY - PART 2A. Part 2A.1 - What companies can be registered? Section 112 - Types of companies

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Presentation Transcript
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LAW OF ASSOCIATIONS

LECTURE5

LAW EXTENSION COMMITTEE

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THESE SLIDES

These slides are an adjunct to, and not a substitute for,

the printed notes

registering a company part 2a
REGISTERING A COMPANY - PART 2A
  • Part 2A.1 - What companies can be registered?
  • Section 112 - Types of companies
  • Section 113 - Proprietary companies
  • Section 114 - Minimum of one member
  • Section 115 - Restrictions on size of partnerships and associations
  • Section 116 - Trade Unions cannot be registered
how a company is registered part 2a 2
HOW A COMPANY IS REGISTERED - PART 2A.2
  • Section 117 - Applying for registration
  • Section 118 - ASIC gives company ACN, registers company and issues Certificate
  • Section 119 - Company comes into existence on registration
  • Section 119A - Jurisdiction of incorporation and jurisdiction of registration
  • Section 120 - Members, Directors and Company Secretary of company
  • Section 121 - Registered office
  • Section 122 - Expenses incurred in promoting and setting up company
  • Section 123 - Company may have company seal
exercise of company powers
EXERCISE OF COMPANY POWERS
  • Governed by Part 2B.1
  • Section 124 - Legal capacity and powers of a company
  • Section 125 - Constitution may limit powers and set out objects
  • Section 126 - Agent exercising a company’s power to make contracts
  • Section 127 - Execution of documents (including Deeds) by the company itself
assumptions people dealing with companies are entitled to make
ASSUMPTIONS PEOPLE DEALING WITH COMPANIES ARE ENTITLED TO MAKE
  • Governed by Part 2B.2
  • Section 128 - Entitlement to make assumptions
  • Section 129 - Assumptions that can be made under Section 128
  • Section 130 - Information available to the public from ASIC does not constitute constructive notice.
advantages of registration
ADVANTAGES OF REGISTRATION
  • Separate legal personality
  • Limited liability
  • Flexibility
  • Perpetual succession
  • Transferability and transmissability of shares
  • Imputation of taxation
  • Power to acquire, hold and dispose of property
  • Capable of suing and being sued
disadvantages of registration
DISADVANTAGES OF REGISTRATION
  • Limitations on shareholders bringing proceedings on behalf of the company
  • Limited role that shareholders have in management
  • Penalty provisions applying to defaulting officers and directors
  • Fees and paperwork associated with compliance
  • No privilege against self-incrimination (Section 187 Evidence Act)
the company as a separate legal entity
THE COMPANY AS A SEPARATE LEGAL ENTITY
  • Salomon v A. Salomon & Co Limited [1897] AC 22
  • Lee v Lee’s Air Farming [1961] AC 12
lifting the corporate veil
LIFTING THE CORPORATE VEIL
  • At Common Law
  • Fraudulent use of the corporate form
  • Agency
    • Re FG (Films) Limited [1953] 1 WLR 483
    • Smith, Stone and Knight Limited v Birmingham Corporation [1939] 4 All ER 116
    • The James Hardie Commission of Inquiry
  • Groups of Companies
    • DHN Food Distributors Limited v Tower Hamlets London Borough Council [1976] 1 WLR 852
    • Hobart Bridge Co Limited (In Liquidation) v Commissioner of Taxation [1951] HCA 33 ; (1951-52) 25 ALJR 225
lifting the corporate veil1
LIFTING THE CORPORATE VEIL
  • By statute
  • The insolvent trading provisions (Section 588G-588Z and 592-593) (to be dealt with in Lecture 6)
  • Winding up on the just and equitable ground (brought forward from Lecture 6)
just and equitable ground
JUST AND EQUITABLE GROUND
  • The Court may order the winding up of a company if the court is of the opinion that it is just and equitable that the company be wound up - Section 461(1)(k)
  • Ebrahimi v Westbourne Galleries Limited [1973] AC 360
  • Examples:
    • A management deadlock prevented the company from pursuing a cause of action
    • It was impossible from the beginning to achieve the objects for which the company was formed (failure of substratum)
    • New directors cannot be appointed to fill a vacant corporate board
    • There had been serious fraud, misconduct or oppression in regard to the affairs of the company
    • Failure by the company to comply with its statutory and constitutional requirements
    • The company is being used to commit fraud
    • There has been an irretrievable breakdown in the relationship between members
next lecture 6
NEXT : LECTURE 6

Insolvent trading

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