Description: This course introduces students to the legal system, business and corporations law and related matters. Examine the common law and statutory principles relating to the commercial environment and corporate governance.

Background: Why is Law Important?

The law has many functions in modern society. Some of the major ones are:
- Determining standards,
- Sustaining order,
- Settling disputes, and
- Protecting rights.
The laws may serve more than one principal function and there are many more functions than these four.

Corporate Governance

Corporate governance can be defined as a system of structures, rights, duties, and obligations by which corporations are directed and managed. Governance facilitates the structure through which corporations set and pursue their aims, simultaneously reflecting the social, regulatory and market environment.

There has been renewed interest in the corporate governance practices of modern corporations, particularly in relation to accountability and sustainability. Corporate scandals of various forms have maintained public and political interest in corporate governance.

Description: This course combines elements of essential business law including key features of contract and other relevant areas of law. 

Background: A contract may be defined as an agreement between two or more parties that the law will enforce. Contract law is concerned with the rules which govern agreements. Business requires that agreements should be honoured by the performance of the promises made in order to ensure that expectations are fulfilled. This is essential to ensure confidence and stability in the market place.

A contract may be as simple a transaction as buying a cup of coffee, or a complex matter such as an international agreement for the supply of raw materials for a period of years, or an insurance contract.

Description: This course delves into the law relating to directors and management, members’ rights and applies it to the winding up of a company.

Background: Insolvency can be defined as the inability to pay one's debts as they fall due. Generally, insolvency terms refers to the inability for a company to pay off its debts.

In Australia, insolvency litigation is about 50% of all litigation involving companies. This area of law is therefore of vital importance academically and in accounting, legal and banking practice.
The Corporations Act 2001 contains detailed provisions relating to insolvent trading. Where transactions occurred prior to 23 June 1993, the applicable provisions are contained in ss 592, 593 and 589. Where transactions occur on and after 23 June 1993, Part 5.7B contains the relevant provisions.
Insolvency is not a substitute for bankruptcy.

What Is Bankruptcy?
In Australia, the term bankruptcy is used in relation to an individual person, rather than a company. Bankruptcy is the approach by which the normal rights of a creditor are withheld in the interests of the debtor and by which the law of debt is modified to affect a compromise beneficial to all parties.

The Bankruptcy Act may be divided into two parts:
• where provision is made for the conversion of the status of a debtor into that of a bankrupt; and
• where the status of the debtor is preserved as such, with provision being made for agreements between the debtor and their creditors without the debtor being made a bankrupt.

When a person is bankrupt, they may be limited in their ability to enter into contracts. The general position is that a bankrupt is automatically discharged from bankruptcy after three years from the date on which the bankrupt filed his/her statement of affairs. The discharge releases the bankrupt from all provable debts (including secured debts) except those stated in s 153 of the Act.

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.

Description: This course develops understanding and application of the law relating to directors and management, members’ rights.

Background: The means of becoming a member of a company in Australia
Section 231 of the Corporations Act 2001 sets out ways of becoming a member. In practical terms there are several methods of becoming a member of a company:

• With the member’s consent, being named in the application lodged with the ASIC s 120 for registration. The member’s name must be entered in the register of members.

• Application And Allotment:
This is the way in which membership results from a contract with the company.
The application is the offer and acceptance made by allotment, which is communicated to the offeror by a letter of allotment. Membership of the company does not occur until the allottee’s name is entered in the register of members.

• Transfer Of Shares:
Where a shareholder sells shares in a company to another person, the buyer of the shares does not become a member of the company until his/her name is entered in the register of members and the seller does not cease to be a member until his/her name is removed from the register.
This may cause problems where the directors of the company have the power, under the constitution, to restrict the transfer of shares. The legal position is that the company only recognises as a member of the person who was a member on the registration of the company or whose name is on the register.

• Transmission of shares:
This is a transfer of shares effected by the operation of law, e.g. upon death or bankruptcy. By logic the trustee in such cases is entitled to have his/her name entered on the register as the legal owner of the shares, but, again, these are held for the benefit of the persons entitled to such benefits.

A trustee, in such cases, does not become a member until his/her name is entered on the register – he/she need not cause this to be done. He/she can leave the shares registered, for example in the name of the estate, and transfer them directly to the beneficiary.