Management Company Law

Questions: 1. Register a proprietary limited co.you should refer to section 117 of the corp. Act, complete an application form and and prepare all relevant consents nb section 117(2).you must also create a share register nb sections 167, 168 and 169.Prepare a constitution - refer to sections 134 and 135.your company's internal management is to be governed by a combination of replaceable rules and a constitution.The constitution must only make provision for a class of redeemable preference shares- nb sections 254a(2) and (3) of the corp act. 2. Research then explain the reason and justification for the following sections of the corp act :- section 124; section 129(1) and section 588m(3). Answers: (1). For registering a company, the person in concern must apply with the ASIC as mentioned sec-117 of the corporation act. After the plan of registration gets over, the next step comes is the concern about the type of company, described under section 112 of the act(asic.gov.au 2016). Type of company: Proprietary Limited Company (under section 112 of the corporation act) Limited by shares company liability as discussed under Sec 601CW under the act: The section mentioned here applies to the registered body subject to the subclause (2). When the registrablebody is also the Australian registrablebody, then this section do not apply to the place where the business is carried on but applied to the place where the business took its origin. Clause 9- other than the Australian ADI body the new company must affix the name in the form of painted or in any other form where the name of the corporation is clearly visible. The name of the company must be displayed in front of all the offices and the place of the registered office. a. the name and the place of origin are compulsory as the display. if it holds the limited liability to the members them the company must put the sin of limited or LTD after the registered name of the business. The section mentioned in this context was necessary to understand the actual liability of the proprietary limited company (Human et al. 2015). Along with the obligations of the limited shareholder, the proprietary company must also use the word proprietary or Pty. in the proposed name with the attachment. Next step for the set up of the business consists of the application procedure to start a new company with accordance to section 117 (2) of the Act. The company should indicate the liability of the every member within its name: Like in this setup the company is a limited liability, so they must use Limited or Ltd. Name of the company (not registered under the business name)- (Name must be such that it can be approved from ASIC, as it does not register the name if there are some offensive or some illegal offense suggestive noticed) An alternative procedure to name the company can be using Australian Company Number (ACN) (fsi.gov.au 2016) After choosing the company name, the consent of the members are important for the note: Under the corporation act, before the application for the registration of the company, there must be a valid consent from the following members: The director(s) of the company expected as a person with the age of more than 18 years. Secretary of the company expected to be a person of more than 18 years of age. Member(s) of the company. In every setup of the corporation, the initial requirement comprises at least one member while the registration application made. In the propitiatory form of company, it is not mandatory to have a secretary, but there must be at least one director present who must be the citizen of Australia. After the consent of the members of the corporation then the registration procedures are followed. The application for the registration of the company has the following: Applicants details- Name: Company: Position: Address: Telephone: Facsimile: Details of proposed company- Company name ( concerning the preference): Name suffix: Incorporating state: Registered Office Address: Business address: Superannuation trustee acting only: Seal: Company presentation: Bank kit Verification of the name whether already registered or not: Actual role of the applicant whether to act as registered agent or ASIC requirement compliance; Shareholder: Type: Name: C.N.: Address: Personal details: Position in the company: Number of Shares: Whether shares beneficially owned or trustee: Advice whether to issue further shares: The above mentioned patterns are followed for all the business shareholders. Any additional notes: Payment: Fee: $738 GST Pattern of payment: Accepting the terms and conditions as mentioned in the clauses. After the registration procedure gets over, then the company needs to set up a constitution which will include the procedures for the governing of the internal management of the corporation as mentioned under the sec 134 of the Act (legislation.gov.au 2016). The constitution also includes the governing of the replaceable rules as mentioned under Sec 135 of the Act. Though the Proprietary company does not need to keep the constitution while registering the corporation, yet it is mandatory to keep a constitution with the company record. The necessity of the clause contains, a company preference to issue shares with special resolutions approval that includes the repayment of capital, surplus assets and profit participation, voting and cumulative dividends. Constitution based on the redeemable preference share at the time of such event or the company or shareholders option (Anderson et al. 2015). (2). Sec 124: defines about the legal capacity of the company along with some powers vested over the corporating body. The section plays a very imperative role because the company must have some power to issue the debentures or the shares or even cancel the shares. There are many aspects, where the company needs to grant option regarding security interest. The legal authority of the company gives jurisdiction to perform many duties as necessary for the benefit of the corporation since the corporation is expected to work in good faith (abr.gov.au 2016). Sec 129(1): the company constitution along with the replaceable rules are compiled with because it is necessary for a company to keeps a constitution so that there can be a specified rules for all the members. The replaceable rules compiled while the actual rules made enables the company to make amendments necessarily (austlii.edu.au 2016). Sec 588(M) (3): this clause is an essential clause under the Act. The creditor is also known as the investor of the company holds the liability to get the recovery of compensation due to loss, from the director. The creditor owned the debt according to subdivision B. Hence it is the right of the creditor to get the compensation, which proves the necessity of the section. (austlii.edu.au 2016). References: Abr.gov.au. 2016. For Business, Super funds Charities | Australian Business Register. Asic.gov.au. 2016. Lodging paper forms | ASIC - Australian Securities and Investments Commission. Austlii.edu.au. 2016. CORPORATIONS ACT 2001 - SECT 129Assumptions that can be made under section 128. Austlii.edu.au. 2016. CORPORATIONS ACT 2001 - SECT 588MRecovery of compensation for loss resulting from insolvent trading. Australia.gov.au. 2016. ABN, ACN, business management | australia.gov.au. Human, S.E., Clark, T., Baucus, M.S. and Eustis, A.C.S., 2015. Idea or Prime Opportunity? A Framework for Evaluating Business Ideas for New and Small Ventures.Journal of Small Business Strategy,15(1), pp.59-80. Legislation.gov.au. 2016. Corporations Act 2001.