Busn331 Business Law : Members Assessment Answers

Assessment Task
Richard has an extensive olive grove in the Hunter Valley region of NSW. He has around 12,000 trees established and has recently purchased his neighbour’s adjoining property with a view to expansion. 
His business is flourishing and his two sons, David and Liam, have recently moved from Sydney to help him expand the business. They see opportunities opening up in new markets and would like to become further involved in the business. They want the family business to be in a form that would allow it to expand as necessary and also make it easier to raise the capital required for this expansion. They have also heard that there are tax benefits in operating a business through a company structure rather than as a sole trader or partnership. They persuade their father to take advice on turning the family business into a family-run company.

 

There is some contention regarding the naming of the company. Richard prefers to name the company after themselves – “Ridali” – whereas David and Liam prefer the name “Rich’s Guaranteed Olives”, in honour of their father. Advise Richard and his sons of the steps that need to be taken to incorporate and register a company.

Procedures for Registering a Company in Australia

Companies’ registration in Australia is very crucial since the government requires all organizations to legalize their company objectives through registration. There are seven major steps to consider when registering a   company in Australia. The steps are as follows:

Steps 1 – Company choice

Step 2 - Choosing a company name

Step 3 -  company operaration

Step 4 - Understand your obligations as a company officeholder

Step 5 - Get consent from officeholders, members and occupiers

Step 6 - Registering your company

Step 7 - After your company is registered.

Step 1; Company Choice

You need to decide if a company suits your needs or if you should use a different business structure. We can't offer specific advice about your situation, so we recommend seeing a financial professional. A company is its own legal entity and lets you conduct business throughout Australia. You can also make use of other privileges, such as corporate tax rates or limited liability. It is important to note that registering a company is different to registering a business name.  Besides, you can also register different types of companies, including: not for profit or charitable organisations, register able Australian bodies, or special purpose companies.

Step 2 - Choosing a Company Name

There are a few things you should consider when choosing a company name.

A company's name cannot be identical to an existing name

You can only use a name that is not identical to an existing company or business name

Use our check name availability search to see if the name you want is available.

If you are the holder of an identical name, you may be able to register the name for the company in some cases:

Before May 2012 in Australia, it was possible for multiple businesses with the same name to exist as long as they were registered in different states and territories. This is no longer possible under ASIC's national register. You won't be able to register a company name if an identical name already exists.

You can only use certain characters in a company's name

The following characters are accepted:

Some Terms Are Restricted

Some words and phrases cannot be used without the approval of  the Australian State government minister when registering a company. Some examples include:

• 'Bank'
• 'Trust'
• 'Royal'
• 'Incorporated'

You can't use words that could mislead people about a company's activities. This includes associations with Australian government, the Royal Family, or any ex-servicemen's organisations. Names can also be rejected if it's considered offensive or suggests illegal activity

Reserving a Company Name

If you aren't ready to register your company but want to make sure a name is available, you can apply to reserve it .If the registration office approve your application, they will reserve the name for two months. If you wish to extend this period, you'll need to apply to reserve the name again. The registrar does not reserve a name for a long period as this prevents other people from using the name to conduct business.

Check existing trademarks or names

Even if the registrar reserve or register a name for you, a company with a similar trademark or name may take action against you. It is your responsibility to be aware of any similar names or trademarks that may affect your name.

A company's name must show its legal status

A company must show the liability of its members and status in its name. For example:  if a company's members' liability is limited to the amount unpaid on their shares, the name must end with 'Proprietary Limited' .if the members' liability is unlimited, the company name must end with 'Proprietary'.

Below is a list of approved abbreviations that can be used in a company's name:

To display a different name, you can register it as a business name. For example, Apples Pty Ltd. can register 'The Apple Fruit Store' as a business name. This means it can trade as 'The Apple Fruit Store' and display it on all its signage.

Step 3 - Company Operation

Before registering, you will need to decide how your company will be governed. Your company can be governed by:

• Replaceable rules
• Its own constitution, or
• A combination of both.

Replaceable rules

Replaceable rules are in the Corporations Act and are a basic set of rules for managing your company. If a company doesn't want to have a constitution, they can use the replaceable rules instead. Using replaceable rules means your company does not need a written constitution. This means you don't have the expense of keeping it updated as the law changes.

Constitution

A company can also have a written constitution instead of using replaceable rules. Companies must keep a copy of their constitution with their company's records.

Special rules for sole director/member proprietary companies

If a proprietary company has just one officeholder, they don't need to follow replaceable rules or have a constitution. If another director/member is appointed, then replaceable rules automatically apply to the company. This can be changed to a constitution at a later date.

Share structure

A proprietary company must have no more than 50 non-employee shareholders and be either:

Limited by shares, or

Be an unlimited company that has share capital.

A proprietary company must not conduct any activity that requires disclosure to investors. They may only offer shares to members of the company or employees/subsidiaries of the company.

Step 4 - Understand your obligations as an officeholder

If you're an officeholder of a company, you must follow the requirements in the Corporations Act. This includes meeting your legal obligations , which includes:

Ensuring company details are kept up to date

Maintaining company records and details on the register

Paying the appropriate lodgments fees and annual review fees as required.

Officeholders are ultimately responsible for a company's adherence to the Corporations Act.

Step 5 - Get consent from officeholders, members and occupiers

You must get written consent from the people that will fill these roles:

Director (must be over 18)

Secretary (must be over 18)

Member (every company must have at least one member).

At least one director or secretary must ordinarily reside in Australia.

Get the consent of the owner of your registered office address

If your registered office does not belong to the company (e.g. it's your accountant's office), you must get their written permission to use the address. You don't have to send copies of your written consent to us, but you do need to keep these with your records. You must also set up a register to record details of the members of your company.

Step 6 - Registering your company

You can register a company in two ways:

Contact a private service provider

There are a number of private service providers (PSPs) that use software that has direct access to ASIC's systems. These PSPs can manage your company application for a fee. We don't endorse any particular PSP and we can't help with any issues that may arise, so make sure you do your own research.

Lodge a paper form directly with ASIC

You can register your company directly with ASIC by completing Form 201 – Application for registration as an Australian company and mailing it to:

Australian Securities and Investments Commission
PO Box 4000
Gippsland Mail Centre VIC 3841

You must complete all information on the form and sign it. Include the fee (use a cheque or money order) when posting your application. Once  your application is processed the registrar will:

Give the company an ACN (which you can use to apply for an ABN)

Register the company, and

Send you a certificate of registration.

The registrar will also send you a corporate key, which is a unique number for your company. You will need your corporate key to create an account online and update your details.

Step 7 - After your company is registered

After your company is registered, make sure:

The company's name is on display wherever the company conducts business and is open to the public

The company's ACN/ABN is displayed on any documents the company publishes

The company's details are kept up to date

Question Two; Compensation Law

Actions Terry Should Take

Terry should sue the company for two main reasons. First, Terry should sue the company for using her as the contact point under which the company transferred wasteful minerals to water thus causing its contamination. Secondly, Terry should sue the company for undermining the rights of the majority surrounding the company location. Thirdly, Terry should sue the company for misusing natural resources and abusing both land and water. Fourthly, Terry should sue the organization for using their wealth to undermine the minority decisions. The reasons as to why Terry should sue the company are based on justice for herself and that of the minority who are not able to speak for themselves.

Australia Law Provision on Employee Compensation Rights

Australia employee’s law provisions provide for employees health security and safety at their work place. The Australian Laws advocates for compensation of employees in cases where employees rights are ignored. Some of the compensation provision policies in the law include; Return to work policies, deemed disease policies and breach of contact policies.

Return to Work

Return to work refers to helping injured workers stay or get back to work. The return to work/rehabilitation provisions in legislation provide for the safe and durable return to work of an injured worker as early as possible, allowing for their injury. The four factors critical to a successful return to work include:

Early intervention

An effective workplace-based rehabilitation program

Effective claims management and cooperation

Collaboration and consultation between stakeholders.

Deemed Diseases

All jurisdictions in Australia provide some form of workers’ compensation scheme. In the past, workers had to establish there was a causal connection between a particular work exposure and the disease their claim was based on. This was fine when there was significant uncertainty as to whether a particular exposure caused the disease. However, where there was strong evidence of a causal connection there seemed little point requiring every worker to prove that connection. To streamline access to workers’ compensation, improve fairness and clarity, and reduce the chance claims could be disputed, Australian government commissioned a report to review the latest scientific research to inform policy and develop an Australian list of scheduled diseases and guidance materials.

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