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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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Law of associations lecture 5

LAW OF ASSOCIATIONS

LECTURE5

LAW EXTENSION COMMITTEE


Law of associations lecture 5

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 MAKE

  • 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 MAKE

  • 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 MAKE

  • 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 MAKE

  • 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 MAKE

  • 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 MAKE

  • 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 MAKE

Insolvent trading