case study with 2000 words without questions Document Preview: HA3021 - COMPANY LAW CASE STUDY Total Length XXXXXXXXXXwords Assessment Marks available - 20 marks Due Date – Week 10QUESTION 1 (4 Marks)...

AuSTRALIAN COMPANY LAW
2012

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Name of the Student

[AUSTRALIAN COMPANY LAW]
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Question 1
Under the Australian Law, an incorporated association is one which has its own separate
legal entity and which comes into existence with the two or more people uniting together to
achieve a common aim of either makings profits or serving the community under a legal
name and by mutual understandings. The incorporation is governed and ruled by the
Australian Law existing in each state.
The advantages of incorporating an organization are as follows: -
1. Separate Legal Entity: The prime advantage of incorporating the associations is the
owning of separate legal entity for the members of the company and allowing them
multiple benefits for the separate legal entity where the member’s liability of the
company is limited to the shareholdings of the each member.
2. Enter into transaction in its own name: The Company being incorporated has the full
capacity to enter into transaction in its own name. This gives the advantage of the
members being not involved in the transactions.
3. Perpetual Succession: This is also an added advantage to the corporation where the
perpetual succession of the company continues whether the members stay in the
corporation or not. This gives the company an unlimited life to continue its existence.
4. Lower administrative costs: The incorporations cost lower administrative costs as
compared to the benefits accrued from them. This is an important consideration as most
of the members take a step back because of a mindset that incorporations are costlier than
the proprietorship or partnership business.
5. Higher formulations of funds: The incorporations are known for raising capital at a better
pace than the other types of entities. Because corporations are having a separate legal
entity and better managerial resources, they are quite common in the eyes of the public
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and the institutions. Because of high net worth companies, the raising of capital is much
easier.
6. Tax benefits: Having incorporations gives you benefits of taxation. The incorporations
are said to have wider tax benefits such as simple tax structure, wide range of expenses,
directors salary withdrawn as expenses, credits and depreciation benefits, they are better
of paying lower taxes than the other type of entities.
Some of the disadvantages of incorporating a business are as follows: -
1. Restrictions and Interference: As we know, every coin has two sides and when one
treats you with benefits the other one takes the benefit out of you. The same is the
case with the incorporations. After incorporating, the legal systems of the business
grow and there are many restrictions on the business so as to maintain the loyalty and
faith amongst the consumers and the stakeholders of the business. There are much
interference in the way of the ASIC, which interferes in the matters of the
corporations raising capital via the IPO route, the government of the continent, to
check whether the corporations are paying fair taxes and activities being ca
ied on
fair grounds and etc.
2. Disclosure and Reporting requirements: An incorporation of a business requires
disclosure requirements as per the ASIC directions and thus, the business has to
follow the same and ca
y on its activities accordingly. The maintaining of registers
and following the companies reporting requirements, it has to be involved in this
complex structure, which is absent in other type of entities.
3. Cancellation of Incorporation: The registrar general of the Australian continent has
the right to cancel the incorporation certificate of any business house on the grounds if
they fail to adhere to the norms and regulations of the regulators and the published
authorities. Under the Australian Law, the Registrar General has the power to cancel
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the incorporation of any business given that he finds that it would be inappropriate
due to scale, nature or value of the activities of the association.
4. Annual Regulatory Costs and other Accounting Issues: Annual costs of operating the
incorporated business are paid to the account of the Office of Regulatory Services. In
the case of companies limited by guarantee, the costs are tad higher than the
incorporated associations. Accounting assumptions sometimes becomes a difficulty
for...