LAWS200 Business Organisations - All Weeks (1-6)

Introduction to Business Organisations

• Unit explores law structures for conducting business activities, focusing mainly on company law.
• Company law regulates the creation, operation, and regulation of companies and their relationships.

Core Topics

• Nature of companies and the Australian regulatory framework, along with corporate law theories.
• Examination of partnerships and their legal implications.
• Understanding the separate legal entity doctrine, company formation, and types of companies.
• Overview of corporate governance rules and regulatory bodies.
• Corporate finance related to shares, share capital, dividends, and fundraising processes.
• Directors' duties, including obligations regarding insolvent trading.
• Rights and remedies available to members of a company.
• Management of companies in financial distress: receivership, voluntary administration, winding up, and liquidation.

Insolvency and Directors' Duties

• Under section 588G, directors must prevent a company from incurring debts when insolvent.
• Section 95A(2) defines insolvency as the inability to pay debts as they become due.
• Personal liability of directors arises for debts incurred post-insolvency or debts leading to insolvency.
• Directors are liable for returning share capital that leaves the company insolvent under section 588G.

Corporate Group Structure

• A holding company controls a subsidiary company as per section 9.
• Conditions for subsidiary status include control of board composition, voting power over meetings, and share capital holdings as outlined in section 46.

Liability in Partnerships

• Misapplication of money or property by a partner makes the firm liable, as stated in section 14.
• Partners are jointly and severally liable for liabilities incurred by the firm.

Types of Liabilities

• Joint liability: All parties are equally responsible for a single obligation. Once one party fulfills the obligation, others are released.
• Several liability: Each party is independently liable for their own part.
• Joint and several liability: Each party is liable for the whole obligation, regardless of individual shares.

Company Classifications

• Large proprietary companies meet at least two of three criteria: consolidated revenue of 50million+;grossassetsof50 million+; gross assets of 50million+;grossassetsof25 million+; 100+ employees.
• Small proprietary companies fall below any two of these thresholds.

Public vs. Proprietary Companies

• A company that isn't proprietary is classified as a public company under section 9.
• Types of companies based on liability include:
  • Company limited by shares.
  • Company limited by guarantee.
  • Unlimited company.
  • No liability company options available for mining companies.

Company Limited by Shares

• Funded by member contributions towards share capital.
• Members' claims for repayment arise only after all company debts are settled.
• Contributions generally are not repaid before winding up, except under specific conditions.

Apparent Authority in Agency Law

• Requirements for an agent to hold apparent authority:
  • A representation of authority is made.
  • Made by someone with actual authority.
  • The person relied on this representation.
• Case study example: Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd highlights the binding authority of actions taken based on assumed authority.

Key Cases

• Brick and Pipe Industries: Establishes the binding nature of guarantees when actual authority is represented.
• Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising and Addressing Co Pty Ltd examines the limitations of apparent authority when it is not backed by actual authority.