Description

Description: This course examines essential elements of corporations law including, the concept of separate legal entity, company formation and operation as well as corporate governance.

Background: Unlike partnerships, corporations are created by statute. The Corporations Act 2001 sets out the various types of companies that are allowed and the method by which a company is brought into existence. On formation, the company becomes a separate legal entity. One important document which is an essential part of this process is the company constitution: previously called the memorandum and articles of association. The people who create the company are known as its promoters. If they do not carry out their tasks in accordance with the common law and the statute they will be liable to the company for breach of their fiduciary duties.

A company comes into existence on registration: the separate legal entity principle
A company registered under the Corporations Act:
• is a separate legal entity distinct from its members
• continues to exist until it is deregistered (sometimes referred to as perpetual succession)
• is capable of suing and being sued
• has the legal capacity and powers of an individual
• has all the powers of a body corporate
In some circumstances, the court will look beyond the corporate entity to the persons or group actually controlling the company.

Corporation And Company:
Corporation is a general term comprising any body corporate and certain unincorporated bodies.
Body is defined (s9) as a body corporate or unincorporated body and includes, for example, a society or association.

A ‘company’ is a company registered under the Act (and includes certain other bodies.
Before a promoter sets about forming a company they must be aware of the particular type of company best suited to their needs. The Act provides for a number of different types of companies. In your reading you should identify these, noting their uses.