ACC2006 Concept of Unlimited Liability

Journal Topics

Company Law

Week 1

The Structures of the Alternative Business consists of companies, sole traders, partnerships, trust and association. The journals have discussed about these structures as they are related to Corporation Law.

v Firstly, as per the journals, the most simplest type of business is sole tradership in the business organization. An individual who is solely responsible regarding all the aspects of the business carries out a sole trader business structure. It is also referred to as an inexpensive kind of business structure that is usually preferred in Australia. The concept of unlimited liability can be applied in a sole tradership form of business.

v I believe that the structure of a partnership business is treated to be as the most common type of businesses that are executed by two individuals in an organization. In a partnership form of business, both the partners will be liable for the profits and losses equally. In business organizations, there are necessary legal and financial merits.

v As per the articles, companies are organizations, which consist of directors, employees and shareholders. A company is considered to be as a separate legal entity that is it has a own identity and different from its members. A company can sue and be sued.

v As per my knowledge and research, a group of individuals that cannot form a business entity forms associations. A trust on the other hand is always related to the essential merits when they are linked with the company.

Week 2

As per the articles, I have observed that a company can be compared to human individuals as they own the same rights. This is because like human beings, a company or a corporation can have a natural debt based on which a company can be sued. The process of registration is necessary in Australia. Every company of Australia should get themselves registered under the Australian Business Number. As observed from the Corporations Act, 2001, a company can be divided into two kinds. One is a public company and the other is a proprietary company. However, all the companies are governed under the Corporations Act, 2001.

Week 3

As per my opinion, for a company to be constituted necessary steps must be followed. A formal document sets out the rules governing the company. The constitution of a company defines the affiliation of the shareholders, members, directors and other existing officers who are engaged with such kind of organization. When a company is formed, the policies and rules of the Corporations Act are to be followed and applied. However, for the constitution, this document is mandatory since it consists of all the relevant details of the formation process. The details also include articles and memorandum of association. Thereafter, I beieve that a contract is created between the company and the members associated. Before the process of registration, the company is then constituted.

Week 4

The articles state that generally the companies handle and manage with the promoters, outsiders and the liability of the corporation. According to my belief, a company can form and enter into a contract with a third party or an outsider. The outsider can also be a promoter who plays the role of an agent. If the company does not provide the authority, an agent cannot carry out or execute the duties. The company gives the authority to its agents. The promoters and outsiders should be confident about the work. However, the authority of the company can be both implied or express.

Week 5

In my opinion, voting rights lies with the members of the company. The voting process decides and takes a few significant decisions for the company. From the articles it was observed that the cooperatives of the consumers allocate the dividends according to the members of the trade. The dividends are paid off by the union for representing the interest on the deposit of the saver. As per my knowledge, the shareholders get the dividends and therefore the directors determine by such a method where a dividend must be cleared off. Therefore, the dividends are basically calculated based on the points where one has earned in the line.

Week 6

In my opinion, a set of practices and policies of the corporate governance that were based on a firm that can be directed and controlled. The aim and objective of the corporate governance is to engage with the interests of the company. The interests usually deal with the suppliers, shareholders, customers and the government. The corporate management is necessary, as it is the process of directing and leading a company. The company’s management governs all the existing resources of the strategic planning. These objectives of the company can be applied based on the strategic planning.

Week 7

The articles state that directors have the duty to monitor and look after the entire business and handle the affairs of the company. I believe that according to the article the directors and officers have a few legal duties and rights depending on the common law. The officers and directors of a company have a set of liabilities and duties as mentioned in the law of corporate governance. The directors should act and carry out the activities in good faith while dealing with the interests of the company. If the acts are not executed, other officers and directors will be liable for committing a breach of duty. Corporation Act will be applicable in such a situation, as the duty will be owed to the corporation.

Week 8

Financing is an act of producing funds for the activities of the business by making purchases and investing. The institutions help in providing funds and capital to the businesses. I believe equity financing is a way by which the capital can be raised along with the help of the enterprises. Consideration of factoring, obtaining a bank loan and usage of a credit card plays a significant role. All the companies of Australia must be registered before making any kind of sale of an ownership interest to raise the funds for fulfilling the objectives of the business. However, it can be concluded from this observation that the shares of the company are generally referred to as the shareholders as they have utmost interest in the ownership in the business.

Week 9

From the articles, it was observed that there are certain remedies that are available for the directors when they are held liable in committing a duty. However, a corporation is referred to as the legal personality from where the company gets the right to sue if there is some sort of breach occurring against the companies. These situations arise when the shareholders are at fault generally. Therefore, the remedies that are available under the Corporations Act, 2001 will be applied in these specific circumstances. This article explained that a minority can claim for the remedies during the cases of oppression. These remedies have been recommended as they are available when there is an effect of the conduct.