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Questions and Answers
At what point does a company become a separate legal entity?
At what point does a company become a separate legal entity?
- When it lodges an application for incorporation
- When ASIC issue the certificate of incorporation (correct)
- When shares are issued
- When the first directors consent to become directors
What action triggers a company to become a separate legal entity?
What action triggers a company to become a separate legal entity?
- Consenting to become directors
- Obtaining a business license
- Lodging an application for incorporation
- Issuing shares (correct)
When are the first directors of a company considered legally separate from the company?
When are the first directors of a company considered legally separate from the company?
- When they consent to become directors (correct)
- When ASIC issue the certificate of incorporation
- When shares are issued
- When they lodge an application for incorporation
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Study Notes
Company Formation and Legal Entity
- A company becomes a separate legal entity when it is incorporated, usually by registering with the relevant state or national authority.
- The action that triggers a company to become a separate legal entity is the filing of articles of incorporation or a similar document with the state authorities.
- The first directors of a company are considered legally separate from the company when they are formally appointed and the company is registered as a separate legal entity.
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