Company Law 1 Heading: Company Law Your name: Course name: Professors’ name: Date Company Law 2 Question 1: legal effect of registering a proprietary company limited by shares When a company is registered, it becomes a separate legal entity, which has its own authority. As per the Corporations Act 2001 (Cth), a company a registered company gets its distinct legal existence, which is different from that of the managers, owners, operators, agents, and employees. A registered company has its own rights, obligations, and property. In fact, a company’s financial and other assets belong to it, and should be utilized for its purposes. Therefore, the directors should know that a registered company has authority of an individual, which include entering into contracts, owning and disposing of property as well as other assets, and suing, and being sued. Upon registration, a company gets distinct legal status, rights, property, and liabilities. These powers will remain until the Australian Securities, and Investment Commission (ASIC) undertakes the company’s deregistration (Silkenat, Aresty, and Klosek, 2009). Additionally, registration of a company implies that there are limited liabilities of its shareholders. The company’s shareholders are not liable for the debts of the company. In their capacity as the company’s shareholders, their responsibility is to pay the money unsettled on their shares, whenever they are required to do so. Nevertheless, in a case in which a shareholder also acts a director, other practices and laws can influence the limitation of liability. First, a director can be liable for debts that a company incurs in a case in which the company trades while insolvent. Secondly, a company director can be liable to pay the company for whatever losses it suffers due to violation of some director’s responsibilities to the company. Third, a director can be subjected to a civil fine. Fourth, in a situation that a firm holds property on trust, a company Company Law 3 directly can be responsible under certain circumstances for liabilities that a company incurs as a trustee (Silkenat, Aresty, and Klosek, 2009). Moreover, upon a registration of a company, directors become liable as security or guarantor over private assets. For commercial practice, a trade creditor, bank, or any other person that provides credit or finance to a firm can ask a company director for a private guarantee of the firm’s liabilities, or for some kind of security over their private assets in order to save company’s performance of its obligations. For instance, a bank can ask a company director to provide a mortgage over its house to protect the firm’s reimbursement of a loan. If the firm does not recompense the loan as consented with the bank, the company director might lose the house (Silkenat, Aresty, and Klosek, 2009). Question 2: Requirements of registering and using a business name Because all the proprietary companies must have the word ‘Proprietary’ abbreviated as Pty Ltd, in their name. The name “Leaping Lizard Coffee Emporium” is unavailable. A company name should be indicated at all the firm’s business premises and its registered office, which are accessible by the public. The company’s name and its Australian Company Name (ACN) should appear on its negotiable instruments and cheques. They should also appear on the public documents, as well as on all documents that are lodged with ASIC. It should also appear on the company’s common seal, if it has any (Silkenat, Aresty, and Klosek, 2009). Question 3: Adopting company constitution Some of the objectives of the company constitution include: 1. The adopted constitution should enable the company to operate constitutionally with at least one director. Company Law 4 2. the adopted company constitution enable the company to operate constitutionally with at least one shareholder 3. the adopted company law should enable the company to avoid the necessity of holding annual general meetings 4. the adopted company constitution should enable the company to avoid the preparation of annual legal accounts 5. the adopted company constitution should enable the company to implement documents without a shared seal 6. The adopted constitution of the company should help the company represent all the current changes in the Corporations Law in a single document. Question 4: Registration of private limited company in Malaysia In order to register a private limited company in Malaysia, there are certain procedures that the directors should know. It is worth noting that registration should take place in a regional office of registrar of companies of the country. The whole procedure to obtain a certificate of integration for a private limited company takes about 15 to 20 days. To start with, they should get and present Form A, which is meant for requesting for the name’s availability. This activity will cost them a search charge of RM30 to CCM in order to ascertain that the name chosen for the integration of the company is available. Notably, the name chosen for the company must not exceed 50 characters, and should include words Sendirian Berhad. The validity of the proposed name is just three months upon it attains the CCM’s approval (Campbell, 2007). During the three months upon approval, they should present Form 6, which is a legal statement of compliance and Form 48A that is legal declaration by persons prior to appointment of a Company Law 5 director. They should also present Articles of Association, and memorandum. Lastly, the directors should submit Lampiran A, relevant fees, and an approval letter (Campbell, 2007). It is imperative for the directors to know that the registration of private and public limited companies in Malaysia have the same procedures. Nevertheless, there is a difference in that the registration of a private limited liability requires an extra Form 18. This is a legal statement of compliance by a firm, which does not provide a prospectus and declaration instead of prospectus (Campbell, 2007). Question 5: Rainforest Alliance versus Fair Trade Certifications According to Nicholls and Charlotte (2005), the Rainforest Alliance and Fair Trade certification of coffee is a commitment of international companies to improve the lives of farm workers and farmers in developing world. The Rainforest Alliance Certified seal is found in different far goods such as coffee, bananas, ferns, flowers, timber, and paper. On the other hand, Fair Trade Certified seal is found in on a collection of agricultural goods like tea, coffee, sugar, coffee, and vanilla (Fridell, 2007). Even though the two certifications have the same goals and missions, they have distinct strategy and focus. While Rainforest Alliance operates with farms of any size, the Fair Trade works exclusively with smallholder producers that operate in cooperatives. However, Fair Trade gets involved in a situation where bigger estates are common. Additionally, Fair Trade warrants a minimum price, which tracks slightly higher than the market; hence, ensuring economic advancement for its producers. On contrast, Rainforest Alliance focuses on the environment (Fridell, 2007). Company Law 6 References Campbell, Dennis. International Agency and Distribution Law, Springer, New York, 2007. Fridell, Gavin. Fair Trade Coffee. Canada: U Toronto Pr, CN, 2007. Nicholls, Alex, and Charlotte, Opal. Fair Trade. London: Sage Publications Ltd, 2005. Silkenat, James R., Aresty, Jeffrey M., and Klosek, Jacqueline. The ABA guide to international business negotiations: a comparison of cross-cultural issues and successful approaches. Chicago: American Bar Association, Section of International Law, 2009. Name: Description: ...