IRAC Approach
Issue - which issue or issues are involved in the question?
Rule of law - what precise legal rule or rules are relevant to the facts?
Application of the rule - how does it apply to the facts of the problem?
- may have to argue both sides of the argument, even if the question asks you to advise only one party
both sides of the argument if the answer is not clear-cut.
Conclusion
Lecture 1 Introduction to Corporate Law
Separate Legal Personality 3-001 - 3-140
s119 - A company can sue and can be sued in its own name
Separate legal entity Charge given by the company to Mr Saloman was valid and he was entitle
be paid his debt in priority, other creditors (unsecured) of the company would
be paid because the company had insufficient assets to pay all creditors.
Company’s property is Mr Macaura cannot claim ‘insurable interest’ against an asset he transferred t
not the property of its company controlled by him, because he was not its owner, the company was
participants
Company can contract The husband entered into a contract of service with the company, the wisd
with its controlling succeeded in arguing she was entitled to a payout under workers compensa
participants insurance for her husband’s death. (Mr Lee can be both the controller and
employee)
Equity Capital 18-300 - 18-340
s124 - Company has legal capacity and powers of an individual both in and outside this jurisdiction
company also has all the powers of a body corporate, including powers to:
● s124A - Issue and cancel shares in a company
● s254A(1) - Power to issue shares
s1070A - Legal nature of a share: A share is a piece of personal property that belongs to the sharehol
Unlike real property such as land, a share is an intangible property referred to by lawyers as a ‘chose
action’.
s254B - Terms of issue: The power to issue shares of different types, or ‘classes’; Company determi
the terms on which its shares are issued, and the rights and restrictions attaching to the shares.
s250E [RR] - Restrictions on the rights: For one vote per share, but it is possible to vary this by issu
shares of different classes with different voting rights attached.
s254M(1) - if shares in a company are partly paid, the shareholder is liable to pay calls on the share
accordance with the terms on which the shares are on issue.
Lecture 2 Business Planning and Constituting Companies
Limited Liability 3-300 - 3-340
Limited liability is to People could create a new corporate entity with limited liability, trade and tak
transfer the risk of risks in advancing the economy of the nation without the consequence of losin
corporate failure from everything if the venture failed.
investors in the venture
carried on by the
company to its creditors
Piercing the corporate veil 3-340 - 3-460
,Partnerships s115 - partnerships with more than 20 partners are not permitted without the
consent of the relevant minister. Once the number of partners exceeds 20, th
firm must incorporate. → CA prohibits ‘outsize partnerships’.
Public companies s250N - required to hold an annual general meeting
s292 - required to lodge financial reports regardless of the size of the
company’s operations
Ch 2E - special restrictions on transactions with related parties
s201A(2) - must have three directors while proprietary companies need only
one director
s204A - must have a secretary
s329 - resignation of an auditor requires consent of ASIC
s300(10) - directors’ reports must contain statements about the qualifications
of directors, their attendance at meetings of directors, their shareholdings or the
contracts with the company
s201E - special rules apply to the appointment of public company directors
s203D & 203E - restrictions apply to the removal of public company directors
s254W - sometimes have different rules i.e. dividends
Proprietary companies s249A - resolution of proprietary companies must be passed at gener
meetings of shareholders, may be deemed to have passed even no meeting
held, provided all shareholders sign a document stating that they support th
resolution
s113 - no more than 50 non-employee shareholders, more advantageous
incorporate as a proprietary company
- must have one or more directors s201A
s112 - may be a company limited by shares or an unlimited company with sha
capital
Change type Pt 2B.7 - the company must pass a special resolution to change its type an
then comply with various registration requirements, including providin
information to ASIC
s166 - the change does not create a new legal entity or affect the company
existing relationship with outsiders
Holding companies, s46 & 47 - the subsidiary is a subsidiary of another subsidiary of the holdin
subsidiaries, & related company
bodies corporate s50 AA - concept of control: an entity controls a second entity if the first enti
has the capacity to determine the outcome of decisions about the second entity
financial or operating policies
s187 - CA allows a director of a wholly owned subsidiary to act in the interests
the parent company in some circumstances
Constituting Companies: Registration of Companies 5-001 - 5-140
Required procedure s117 - the procedure/ contents of the application form are prescribed; to lodg
an application form with ASIC
s231 - the proposed members must consent in writing to becoming members
the company
s201A - the directors must give their consent in writing to being appointed a
directors
s204A - decide who will be the secretary or secretaries of the company (publ
companies must have at least one secretary), the secretary must consent to th
appointments
s121 - choose an address to be the company’s registered office
After registration s118 - ASIC issues a registration certificate containing details of teh registration
s119 - the new company comes into existence at the beginning of the day o
which it is registered
s148 - limited public companies must include word ‘Limited’/ ‘Ltd’; proprieta
companies must include word ‘Proprietary Limited’ or ‘Pty Ltd’. No liabili
, s137 - the resolution will take effect on the day it is passed or on a later da
specified in the resolution
s136(5) - public companies that amend or repel their constitution must giv
notice to ASIC
Legal Effect s140 - a company’s constitution and any RR rules that apply to the compan
have effect as a contract:
(a) Between the company and each member; and
(b) Between the company and each director and company secretary; and
(c) Between a member and each other member
Statutory contract is a deemed contract only as between the parties referred
s140
Eley (as an employee in this case, s140 is not enforceable in the capacity
employee, should have an employment contract instead)
Confers rights or obligations on a member, it does only if the person is
member and only in their capacity as a member.
Unable to enforce the statutory contract until they are registered as member
Failure to follow a company’s RR rules, a provision of the statutory contra
cannot be enforced unless it affects the member in his or her capacity as
member
s135(3) - criminal or civil liability for breach of RR rules do not apply (NOT
breach of the Act)
s1324 - a person seeking an injunction requiring compliance with the RR rule
must do so under the ordinary jurisdiction of the Supreme Court
Oppression - s232 to s234
Single director/ s135 - RR rules do not apply to a proprietary company while the same perso
shareholder companies is both its sole director and sole shareholder
s201 - the director may appoint another director by recording the appointme
and signing the record
- s201F the situation where the sole participant dies or is otherwis
incapacitated, by providing for their personal representative to tak
over the company (problems: delay in operation)
s198E(1) - the director may exercise all powers of the company except an
powers that the CA or the company’s constitution requires the company
exercise in general meetings
- Business of company to be managed by or under the direction of th
director
s198(2) - director may execute a negotiable instrument (i.e. cheque), an
determine it to be executed in different ways
s202C - the director is to be paid any remuneration for being a director that th
company determines by resolution; company may also pay travelling and oth
expenses properly incurred by the director in connection with the company
business
Lecture 3 Decisions Making in Companies (Variation of Class Rights)
Decision Making and Company Management
Board’s Power s198A Powers of Directors [RR]
- s198A(1) [Management of business] the business of the company is
be managed by or under the direction of the directors
- s198A(2) [Exercise of Powers] the director may exercise all powers
the company except any powers that the CA or the company
constitution requires the company to exercise in general meetings
s198D - board may delegate certain functions to committees of the board
Issue - which issue or issues are involved in the question?
Rule of law - what precise legal rule or rules are relevant to the facts?
Application of the rule - how does it apply to the facts of the problem?
- may have to argue both sides of the argument, even if the question asks you to advise only one party
both sides of the argument if the answer is not clear-cut.
Conclusion
Lecture 1 Introduction to Corporate Law
Separate Legal Personality 3-001 - 3-140
s119 - A company can sue and can be sued in its own name
Separate legal entity Charge given by the company to Mr Saloman was valid and he was entitle
be paid his debt in priority, other creditors (unsecured) of the company would
be paid because the company had insufficient assets to pay all creditors.
Company’s property is Mr Macaura cannot claim ‘insurable interest’ against an asset he transferred t
not the property of its company controlled by him, because he was not its owner, the company was
participants
Company can contract The husband entered into a contract of service with the company, the wisd
with its controlling succeeded in arguing she was entitled to a payout under workers compensa
participants insurance for her husband’s death. (Mr Lee can be both the controller and
employee)
Equity Capital 18-300 - 18-340
s124 - Company has legal capacity and powers of an individual both in and outside this jurisdiction
company also has all the powers of a body corporate, including powers to:
● s124A - Issue and cancel shares in a company
● s254A(1) - Power to issue shares
s1070A - Legal nature of a share: A share is a piece of personal property that belongs to the sharehol
Unlike real property such as land, a share is an intangible property referred to by lawyers as a ‘chose
action’.
s254B - Terms of issue: The power to issue shares of different types, or ‘classes’; Company determi
the terms on which its shares are issued, and the rights and restrictions attaching to the shares.
s250E [RR] - Restrictions on the rights: For one vote per share, but it is possible to vary this by issu
shares of different classes with different voting rights attached.
s254M(1) - if shares in a company are partly paid, the shareholder is liable to pay calls on the share
accordance with the terms on which the shares are on issue.
Lecture 2 Business Planning and Constituting Companies
Limited Liability 3-300 - 3-340
Limited liability is to People could create a new corporate entity with limited liability, trade and tak
transfer the risk of risks in advancing the economy of the nation without the consequence of losin
corporate failure from everything if the venture failed.
investors in the venture
carried on by the
company to its creditors
Piercing the corporate veil 3-340 - 3-460
,Partnerships s115 - partnerships with more than 20 partners are not permitted without the
consent of the relevant minister. Once the number of partners exceeds 20, th
firm must incorporate. → CA prohibits ‘outsize partnerships’.
Public companies s250N - required to hold an annual general meeting
s292 - required to lodge financial reports regardless of the size of the
company’s operations
Ch 2E - special restrictions on transactions with related parties
s201A(2) - must have three directors while proprietary companies need only
one director
s204A - must have a secretary
s329 - resignation of an auditor requires consent of ASIC
s300(10) - directors’ reports must contain statements about the qualifications
of directors, their attendance at meetings of directors, their shareholdings or the
contracts with the company
s201E - special rules apply to the appointment of public company directors
s203D & 203E - restrictions apply to the removal of public company directors
s254W - sometimes have different rules i.e. dividends
Proprietary companies s249A - resolution of proprietary companies must be passed at gener
meetings of shareholders, may be deemed to have passed even no meeting
held, provided all shareholders sign a document stating that they support th
resolution
s113 - no more than 50 non-employee shareholders, more advantageous
incorporate as a proprietary company
- must have one or more directors s201A
s112 - may be a company limited by shares or an unlimited company with sha
capital
Change type Pt 2B.7 - the company must pass a special resolution to change its type an
then comply with various registration requirements, including providin
information to ASIC
s166 - the change does not create a new legal entity or affect the company
existing relationship with outsiders
Holding companies, s46 & 47 - the subsidiary is a subsidiary of another subsidiary of the holdin
subsidiaries, & related company
bodies corporate s50 AA - concept of control: an entity controls a second entity if the first enti
has the capacity to determine the outcome of decisions about the second entity
financial or operating policies
s187 - CA allows a director of a wholly owned subsidiary to act in the interests
the parent company in some circumstances
Constituting Companies: Registration of Companies 5-001 - 5-140
Required procedure s117 - the procedure/ contents of the application form are prescribed; to lodg
an application form with ASIC
s231 - the proposed members must consent in writing to becoming members
the company
s201A - the directors must give their consent in writing to being appointed a
directors
s204A - decide who will be the secretary or secretaries of the company (publ
companies must have at least one secretary), the secretary must consent to th
appointments
s121 - choose an address to be the company’s registered office
After registration s118 - ASIC issues a registration certificate containing details of teh registration
s119 - the new company comes into existence at the beginning of the day o
which it is registered
s148 - limited public companies must include word ‘Limited’/ ‘Ltd’; proprieta
companies must include word ‘Proprietary Limited’ or ‘Pty Ltd’. No liabili
, s137 - the resolution will take effect on the day it is passed or on a later da
specified in the resolution
s136(5) - public companies that amend or repel their constitution must giv
notice to ASIC
Legal Effect s140 - a company’s constitution and any RR rules that apply to the compan
have effect as a contract:
(a) Between the company and each member; and
(b) Between the company and each director and company secretary; and
(c) Between a member and each other member
Statutory contract is a deemed contract only as between the parties referred
s140
Eley (as an employee in this case, s140 is not enforceable in the capacity
employee, should have an employment contract instead)
Confers rights or obligations on a member, it does only if the person is
member and only in their capacity as a member.
Unable to enforce the statutory contract until they are registered as member
Failure to follow a company’s RR rules, a provision of the statutory contra
cannot be enforced unless it affects the member in his or her capacity as
member
s135(3) - criminal or civil liability for breach of RR rules do not apply (NOT
breach of the Act)
s1324 - a person seeking an injunction requiring compliance with the RR rule
must do so under the ordinary jurisdiction of the Supreme Court
Oppression - s232 to s234
Single director/ s135 - RR rules do not apply to a proprietary company while the same perso
shareholder companies is both its sole director and sole shareholder
s201 - the director may appoint another director by recording the appointme
and signing the record
- s201F the situation where the sole participant dies or is otherwis
incapacitated, by providing for their personal representative to tak
over the company (problems: delay in operation)
s198E(1) - the director may exercise all powers of the company except an
powers that the CA or the company’s constitution requires the company
exercise in general meetings
- Business of company to be managed by or under the direction of th
director
s198(2) - director may execute a negotiable instrument (i.e. cheque), an
determine it to be executed in different ways
s202C - the director is to be paid any remuneration for being a director that th
company determines by resolution; company may also pay travelling and oth
expenses properly incurred by the director in connection with the company
business
Lecture 3 Decisions Making in Companies (Variation of Class Rights)
Decision Making and Company Management
Board’s Power s198A Powers of Directors [RR]
- s198A(1) [Management of business] the business of the company is
be managed by or under the direction of the directors
- s198A(2) [Exercise of Powers] the director may exercise all powers
the company except any powers that the CA or the company
constitution requires the company to exercise in general meetings
s198D - board may delegate certain functions to committees of the board
