MLL221 Study Guide - Final Guide: Natural Person, Legal Personality, The Alteration
24 May 2018
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CORPORATE LAW TOPIC TWO
(s.119) On registration, a company becomes a separate legal person
• s.119: A company comes into existence as a body corporate at the beginning of the
day on which it is registered
(s.124) Legal capacity of:
Natural person
• Own property
• Contract
• Sue and be sued
Body corporate
• Issue shares
• Grant a charge
TYPES OF COMPANIES:
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• Identify distinctive features of companies under each classification including the
company limited by shares as the most common type of company.
Classification According to the Liability of Members – s112(1):
• Limited by shares
• s 9 definition
• company limited by shares means
• a company formed on the principle of having the
liability of its members limited to the amount (if any)
unpaid on the shares respectively held by them.
• (s 254A, 254M-254N, partly paid shares)
• Most popular
• Meers liaility to the opay liited to aout upaid o
their shares (s.516)
• So if shares are fully paid, there is no liability risk
• Warning to creditors
• Copay ae Proprietary Limited Pty Ltd or Limited
Ltd s.48
• Can be public or proprietary
• Limited by guarantee
• s9 definition
• company limited by guarantee means
• a company formed on the principle of having the
liability of its members limited to the respective
amounts that the members undertake to contribute to
the property of the company if it is wound up
• Meers liaility liited to aout eer udertake to
contribute if company wound up (s.517)
• Members agree that they will be liable for a certain amount.
• No share capital
• Often used for non profit activities
• Can only be a public company
• About 11,000 in Australia
• Unlimited liability
• s9 definition
• unlimited company means
• a company whose members have no limit placed on
their liability.
• A company whose members have no limit placed on their liability
(s.9)
• i.e. Meers are joitly ad seerally liale for opays
debts without limitation upon winding up
• Not suitable for trading ventures; primarily used by professional
associations where members required to have unlimited liability
• Can be public or proprietary
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• Only about 600 in Australia.
• No liability
• S112(2)
• A company may be registered as a no liability company if
• (a) the company has a share capital; and
• the opays ostitutio states that its sole
objects are mining purposes; and
• (c) the company has no contractual rights under its
constitutions to recover calls made on its shares from a
shareholder who fails to pay them.
- NOTE: s9 defines mining purposes.
- Must be a mining company (s.112(2))
o Mining Company = constitution must state that its sole
objects are mining purposes (s.112(2)(b))
- Can only be a public company
- Warning to creditors
o No Liaility or NL ust e used i opays ae
(s.148(4))
- Only about 1,000 in Australia.
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Document Summary
Corporate law topic two (s. 119) on registration, a company becomes a separate legal person s. 119: a company comes into existence as a body corporate at the beginning of the day on which it is registered (s. 124) legal capacity of: Natural person: own property, contract, sue and be sued. Identify distinctive features of companies under each classification including the company limited by shares as the most common type of company. Classification according to the liability of members s112(1): Must be a mining company (s. 112(2): mining company = constitution must state that its sole objects are mining purposes (s. 112(2)(b)) Warning to creditors: (cid:862)no lia(cid:271)ility(cid:863) or (cid:862)nl(cid:863) (cid:373)ust (cid:271)e used i(cid:374) (cid:272)o(cid:373)pa(cid:374)y(cid:859)s (cid:374)a(cid:373)e (s. 148(4)) Only about 1,000 in australia: know that the corporations act classifies companies according to the liability of members and according to whether they are public or proprietary companies. The corporations act imposes additional requirements on listed companies. must comply with both periodic reporting and continuous disclosure obligations.
