This assignment revolves around three topics inclining towards providing advice to Bibek who is the owner of a news agency in Sydney and wants to enlarge his business. The second topic revolves around the types of the companies and distinguishing between them. It deals with the differentiation between proprietary company and public company. This study further shades light on the basic difference between a company limited by guarantee and a company limited by shares in accordance to Australia. The third topic initiates to provide advice to the members and stakeholders of the Delhi Australian Curries Limited. The meeting was called to for the discussion of the contracts in context to the number of contracts. Corporation’s law is incorporated in this study to provide advice to Bibek and the shareholders.
Proving an advice to Bibek
Bibek wants to expand his business as a sole trader. He has a news agency and wants to expand the business as his consumer range is outgrowing.
The Corporation’s act of 2001 is needed to be studied to understand the cases regarding the business as a sole trader (legislation.gov.au, 2018). The ABN is needed to be procured in context to the dealings of the business. The goods and services tax is needed to be generated in context to the annual turnover of $ 75,000 and more than that.
The very best legal structure to procure his business is that at first he needs to lodge Tax File Number (TFN) in context to tax returns. The need is to understand the business structure, the partnerships and trusts. The Corporations Act 2001 is needed to be studied in details to open any organisation of business. As commented by Whincop et al. (2018, p. 40), it is very important to know the requirements in context to the Company under the Corporations Act of 2001. The responsibilities and requirements of the director are entailed in details under various sections. The sections of the corporate law are needed to be studied to evaluate the outcomes of the organizations. The section 180, 180(1), 181 are needed to be averted in details (austlii.edu.au, 2018).
The sections are needed to be studied so that no issues emerge in the upcoming future regarding the business. The deduction of the amount cannot be generated from the business amount in context to wedges. The Section 180 states of the care and diligence (directors and officers), business judgement rule which initiates that the judgement is needed to be done with a proper purpose. The section 180(1) is in context to the Corporations Act. For example, the case of ASIC V Cassimatis involved breach of the duties of care in context to the director in the Storm.
Steps of costs in context to a business structure of a sole trader
Table 1: Cost
As commented by Morgan and Kuch (2015, p. 556), sole traders are individual business runners which is quite simple and cheap. The debts and losses cannot be shared with any other individuals. The TFN is important and reporting the income is highly necessary. Payment is generally analysed in accordance to PSI.
Under the Corporations Act of 2001 Bibek has to open a bank account in context to the transaction incorporated by the company. The registration with the ASIC is needed to be entailed in context to the ACN (Australian Company Number). The sections of the corporations act are needed to studies in details to prevent future mishaps.
Difference between proprietary company and public company in context to Australia
Proprietary structure of a company is depended on the size of the business. The size of a business structure is usually held responsible for to state it as proprietary or public. Small ventures do not usually need the initiatives of the public structure company. Proprietary company is one of the common initiatives for the small businesses. Proprietary company holds legal existence (legal), operators, managers and owners. As commented by De Silva Lokuwaduge and Armstrong (2015, p. 899), the income tax liability is held as own for the proprietary companies in context for the separation of the income tax (personal). It can enter in to contracts, be sued and can sue and can own properties and dispose it. According to the corporations Act, their shareholders can afford to be protected in context to the liability level. The unlimited liability is entailed by the shareholders under section 114 in context to the Corporations Act of 2001. In this context, the proprietary company is needed to have one shareholder and 50 employees. The selling of the shares is not generated in proprietary companies. The shares can be offered to the shareholders of the organization (existing) or to a company subsidiary. On not meeting the criteria for the proprietary company it can be converted by the ASIC to a public company. A proprietary company is not limited. A secretary is an innate need of the proprietary company.
It is inclined to have a shareholder (owner) under the Corporation’s Act of 2001 section 114. Having three directors a must need (Under section 201A (2) of the corporations act of 2001). One or more secretary is an innate need of the public company under the Corporations Act of 2001 section 204A (2). The registered office is required to be open in context to the public for specific hours under the section 145(1) in context to the Corporations Act of 2001. As commented by Whincop (2017, p. 2), there are several types of companies that can to be initiated limited to shares, by guarantee, no liability and share of capital (Under corporations act of 2001 section 112(1)).
Table 2: Difference between public and proprietary company
Difference between company limited by share and company limited by guarantee
Registration of the company is needed to be catered in context to the company limited by shares and company limited by guarantee. As commented by Jones (2016, p. 58), most of the companies are limited in context to the shares. The ideal business structure is determined by the limitation of shares to keep the business in profit. The non profitable business structures are limited by guarantees. The profit distribution is the main related difference between the company limited by shares and company limited by guarantee. To a company which is limited by shares, the liability of the members of the organization is limited in context to the shares. As commented by Brown and Dickfos (2015, p. 501), the directors are not liable to the dents initiated by the organization or the company. The personal assets are not generally in any risk in context to the investment to the company. Companies which are limited by the guarantee are generally public companies but the companies limited by share can be either public or private. a n annual financial report is generally not required for the small companies which are limited by guarantee.
table 3: Difference between company limited by shares and guarantee
As commented by Da Gbadji et al. (2015, p. 1213), the company once established as limited by share cannot be held or changed as a limited by guarantee company. The name of the company limited by guarantee can be changed. Private companies can be limited in context to guarantee in accordance to the section 60. The profits are generally distributed among the shareholders. Private companies which are limited by guarantee are generally not for the initiation of profits. An example of a company limited by guarantee is ASIC V Cassimatis in which the director was found to breach the company.
Providing advice to the shareholders and members
The directors of the Delhi Australian Curries Limited were called for a meeting in order to discuss the performances in context to a number of contracts. But they had refused to initiate the meeting but the shareholder wants the meeting to commence.
The shareholders can call meetings under the Corporations Act of 2001. It is their fundamental right. The director can initiate to call a meeting under the Corporations Act of 2001 in accordance to the section 249C but it is replaceable. The member of the shareholder can remove the director of the company under the 203D section of the corporations Act of 2001.
In this context, Adams V Yindjibarndi Aboriginal Corporation RNTBC  WASC 467, the court initiated if it was important to call a meeting for the removal of the 10 directors. The investors can call up a meeting and the directors are needed to follow it. The Regulatory guide 128 Collective action by investors wrought down the guide of whom and when can call off a meeting.
The directors can call a meeting on the request of a shareholder under the Corporations Act of 2001. The term used for these meetings are referred to as shareholder or member requisitioned meetings. Valid requisition is needed to be written in context to any proposal or change. Many circumstances proclaim that the directors do not like the proposal or change but that does not mean that they can hold that meeting to claim it as invalid. Under the Corporations act of 2001 it is the duty of the directors to hold the meetings requested by the members or the shareholders. The meeting can be put onto hold by the directors only for two months under the Corporations Act of 2001. The director of the company has no right to or power to postpone the meeting. As commented by Bristow (2018, p. 32), if the Court of law gives the order to conduct the meeting after the initial period than only the meeting can be called off or be postponed. In certain contexts, when the ASIC holds a director more important than the shareholder, only then the meeting can be delayed.
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