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Heading: Company Law
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,
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
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
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.
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
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
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
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.