Essential Australian Company Law - Example

Name: Course instructor: Course: Date: PART A 1. a) In this case, the participants to the joint venture were Linfox, Downer and Thiess. b) The name of the joint venture was Roche Thiess Linfox Joint venture. This joint venture was registered in that name for GST purposes under Australian Business Number. The joint venture had the abbreviation RTL. c) The mutual business enterprise was founded to develop a coal mine at Yallourn. This joint venture was granted the possession of the mine site and the RTL venture agreed to carry out contract mining. 2. The issue before the court was that RTL was charged of the allegations that it had failed to ensure so far as was reasonably practicable that the mine workplace was safe and without risks. This happened after an employee died as a result of injuries received when he was crushed by a belt clamp on a conveyer at the Yallourn mine. This employee was working in the maintenance subcontractor engaged by RTL known as Silcar. Charges were laid against the applicants under sections 21, 23 and 26 of the occupational Health and Safety Act 2004 (Vic) (the Act). There were nine counts each of which of which alleged that RTL had failed to ensure safety for its employees. The applicants sought the dismissal of the charges against them arguing that the charges were unsustainable. The trial judge had rejected their application and each of the applicants sought review under section 296 of the Criminal Procedure Act 2009 (Vic) of the trial judge’s refusal to certify under section 295(3) of that Act. The appeal and dismissal of the case against the applicants was necessary. This is because, both the form of charges and evidence relied reveal a fundamental misconception on the part of the prosecution as to what was required to prove the commission of an offence under the Act by individual members of the joint venture. The appeal and dismissal of the case was not appreciated earlier and this led to the complication of the formerly simple case. There was a debate on whether the defendants needed to make a no case submission before any evidence was called. This was seen as being an appropriate course in the case because the legal issues raised went to the foundation of the case brought against the defendants. For this reason, the utilization of the interlocutory appeal procedure was both appropriate and necessary in the unusual circumstances of the case. The nature of RTL is not a technical term. This is because this is just a term used to describe a joint commercial enterprise. Joint venture connotes an association of people for the purpose of a particular commercial, trading, mining or other financial undertaking or endeavor with a common goal of profit making with the participants at most times contributing money, goods or skills to the venture. In most cases, such joint ventures are partnerships. A joint venture has no legal existence. This is because it is just a name, a description of a business undertaking. A joint venture is carried out through a medium which does have independent legal existence such as a company or a trust. In the case of RTL, no separate legal entity was created for the purpose of carrying out the undertaking. Therefore, RTL had no legal personality separate from the three participants of the venture. This basal proposition has obvious consequences for attribution of criminal responsibility for wrongs which occur in the conduct of the business in the RTL. In this connection, a mutual business enterprise such as RTL has no lawful subsistence and has no scandalous accountability and cannot be prosecuted. This is because in all applications to the criminal law, a legal person has to be identified to whom criminal responsibility is said to fall. The criminal responsibility in this case can only fall on the three companies who are members of the joint venture. 3. The fundamental premise of the crown’s case was that since the three companies had jointly agreed with Yallourn Energy that they as RTL would carry out mining, they could be treated as a single entity for the purposes of considering the questions of employment, control of operations at the mine and ultimately breach of duty. Criminal responsibility is attached to the person who is an employer or has management control of a work place. The RTL venture would only have criminal responsibility for this case if individual participants in the venture could be shown to satisfy that they were employers in the company. The crown case thought that it would be easy to assemble appropriate evidence to each company in the RTL venture that it was an employer in the workplace at the time when an employee died. The fundamental premise of the crown case suggests that an employer should provide and maintain a safe working environment for employees that pose no risk to their health. An employer is a person who employs one or more people. The employer owes safety duty to his/her employees and employees of subcontractor engaged by the employer. The extended responsibility of a boss has effects only to issues over which the boss has power. In the current situation, the Crown case contented that the applicants owed extended duty to employees of the subcontractor, Silcar. The Crown case read that RTL venture, being an employer failed so far as was reasonable practicable to provide and maintain for its employees, including Silcar employees, a working environment that was safe and without risks to health. The RTL venture was thus termed as an employer which owed duty under section 21(1) to its employees-by extension-Silcar’s employees to guarantee so far as that they were able to work safely in the mine work place. According to the Crown case fundamental premise, RTL was an employer and its safety duty was imposed by section 21(1). The Crown case also stated that by operation of law, RTL was an employer. The Silcar employees and others working on the conveyer maintenance were employees of RTL. In this case, RTL is alleged to have owed a duty to the Mr. Gauci and other Silcar employees engaged to perform maintenance duties. The RTL venture had no legal personality separate from the corporations which formed it. In this connection, the venture could not enter a contract of employment. 4. The court failed to concur with the premise of the Crown case. This is because a document that requires legal entity can only be signed by each of the accused companies but not the RTL venture. The Crown case thus had to prove that each of the applicants was an employer and thus had criminal responsibility in the case. The court said that RTL is just a name and does not employ anyone. It is neither a duty holder nor does is exercise control hence cannot commit a breach. Furthermore, there was no foundation for the contention that individual companies had any kind of derivative liability through RTL. This means that, none of the counts under section 21(1) could succeed against an individual company in the RTL unless there was prove under section 21(3) that the company was an employer. The members of the joint venture did not have legal personality of their own and could not attract duties under section 145(1) 0f the criminal law. The court did not agree with the fundamental premise of the Crown case because there was no way to prove that the member companies were employers. The adjudicators failed to be contented with the view that the applicants were employers in mine site. Moreover, nothing could be used to prove that the management in RTL controlled the workplace. In addition, there was no evidence that could show for purposes of section 26(2) the extent of management or control exercised by any individual company in the mine site at the time of the occurrence. In addition, they Crown case lacked evidence upon which a jury could be satisfied beyond reasonable doubt that any one of the defendant companies had management control of the mining site. The court had to reject the defense because there was no reasonable evidence that any of the applicants was an employer in the control of the mine workplace. PART B 1. Australian company number ACN 080 603 372 a) The company is registered and its name is SORDEN PTY LTD b) I conducted the search in the regulatory agency ASIC of the website www.asic.gov.au/asic/pdflib.nsf/.../asic47_04.pdf/.../asic47_04.pdf 2. Section 9 of the Corporations Act 2001 defines the term business day. A business day is a term used in the corporations’ act 2001 to mean any day other than a weekend or public holiday. In addition, a business day excludes a bank holiday in the concerned area Business days should properly be defined in order to determine when business obligations have to be discharged. A day’s vent can be very important for cash flows and for the discharge of legal duties. People have different perceptions of a business day and thus it is important for the parties in a transaction to have a mutual definition of a business day. 3. Section 513B of the Corporations Act specifies when the voluntary winding up of a company is taken to have commenced. Voluntary winding up of a company occurs when a company decides to conclude the business. The sections states that when a company decides through an exceptional declaration that it has to be concluded willingly, the conclusion is said to have started: a) If when the declaration was made, a winding up of the company had already started b) If immediately prior to the making of the declaration, the company was under administration c) If the passing of the declaration was followed by a deed of a company arrangement that had been committed by the company although it was yet to be determined. d) If the declaration for resolution is considered to have been passed at a meeting organized by the creditors of the company. 4. The instrument known as the deed of the company arrangement after the creditor’s resolution specifies various matters. A company’s creditors can resolve that a company execute a deed of the company arrangement. A company’s administrator is always the administrator to the deed unless the creditors declare otherwise. The deed of the company specifies its administrator, the company’s property, the nature and period of any suspension period provided by the deed, the extent to which the company is released from its sum unpaid, provision under which the deed will start operating, the stipulations for the instrument to continue operating, conditions in which the deed will end, the order of the proceedings of releasing the property mention earlier to the company’s creditors and the day on or before which assertions should arise if they are admissible under the deed. Section 444A of the Corporations Act 2001 specifies the requirements of the deed of a company arrangement after the creditor’s resolution is passed. 5. The ASX operates a market of equity and debt securities issued by listed companies. it usually has standards for the behavior of listed corporations through its listing rules. It proposes amendments of the listing rules. The ASX listing rules were lastly amended in 2008, ASX limited (2011). For a company to be included in the ASX listing, it must meet some few requirements. The arrangement of the corporation must be suitable for a listed entity. In addition, the company must have a trading policy that matches with the ASX listing rule Robert B. 2010, pp 45. 6. Section 249U of the corporations Act 2001 is a replaceable rule. This rule concerns the chairing meetings of members. According to this rule, the directors may elect an individual to chair their meetings. In addition, the directors present in any meeting must also elect a person who is present to chair the meeting. Moreover, parties in attendance in a conference must vote for one of them to guide the meeting, Commonwealth Consolidated Acts (2011). 7. Section 152 of the corporations Act 2001 provides for the reservation of a company name. For a company’s name to be reserved, a person can lodge an application in ASIC form to reserve the name of his/her company. The process of reserving a company name is known as reservation process. The reservation process takes two months from the time of lodging the application. The person applying for the reservation can ask ASIC to extend the reservation period during a time when the name of the company is reserved. The reservation process can be extended for two months Commonwealth Consolidated Acts (2011). 8. AASB 101 is an abbreviation of the Australian accounting standard board that sets out the general requirements for the presentation of financial reports, guidelines for their structure and minimum requirements for their content. According to Dawson S. (2010), the standard defines comprehensive income as the change in equity during the period other than those changes that result from transactions with owners in their capacity as owners. 9. Section 436G of the corporations Act 2001 provides for the membership of creditors of a company under administration. For a person to be a member of the committee of creditors under administration, he she must be a creditor of that company, be the attorney of such a creditor or be permitted through writing by such a creditor to become a member, Commonwealth Consolidated Acts (2011). An officer or employee of a member of the creditors committee can represent a body corporate member of the committee. Moreover, a body corporate member of the creditors committee can also be represented by an individual who is authorized in writing by that particular member. 10. Sections 263, 264 and 265 of the Corporations Act 2001 specifies the time when a charge is taken to have been lodged with the ASIC. A charge is taken to have been lodged if it is accompanied by the documents specified in the charge. When a detect pertaining a charge on possessions of a business to be wedged is lodged and the detect includes all the essentials needed by the pertinent segment to be comprised in the detect, ASIC must immediately ensure that the date and time when the notice was given are added into the register, Commonwealth Consolidated Acts (2011). A blame is an accusation made by the business, the date when it was made, or if the accusation was a blame that existed on possessions that a company had acquired, the time during which the company had acquired the possession. A charge must also have a short description of liability and a short description of the property charged. Moreover, it must have the name of the trustee or chargee. PART C Vicarious liability is a lawful accountability for the deeds of other people, Andre T. 2003, pp 4. This type of liability is common in many areas of law. For instance, if an individual is held answerable for the deeds of his/her friend, then the liability of that person is said to be a vicarious liability. The relationship between a person and his/her friend can make the person to be held responsible for the deeds of the friends. In this connection, the vicarious liability can be determined by the relationship between two people. In some other cases, vicarious liability can be used to describe a situation where a person is liable for the deeds of another person even though the first person was not at a fault. Thus, a vicarious liability applies to any case where a person is held responsible for the deeds of another person. The criminal law does not value vicarious liability. This is because; the criminal law states that a person can only be liable for their own mistakes and not those of their friends. According to Andre T. 2003, pp 8, vicarious liability can also be defined as an official policy that assigns accountability for a mistake to a person who did not make the fault but who is legally related to the person who committed the fault. A vicarious liability can also be termed as imputed negligence. A direct liability is a legal compulsion of a person or business due to inattentive acts resulting to the damage of property, body injury or harm of another person. A direct liability is imposed on an individual who is directly accountable for carelessness that brings about bodily injury or property damage. For example, an official in organization can be held directly accountable to his/her carelessness if he destroys evidence that is essential in a lawsuit by an employee. Vicarious and direct liabilities can occur in cases of partnerships, trusts and companies. In a partnership business, vicarious liability can occur when the financial accountability is assigned to the partnership leaders for a damage committed by the partnership’s employees, Karen W and Laurie A. 2006, pp 343. The damages can result from a violation of the contract on the part of the employee. A direct liability can also be made in a partnership the business where the business is assigned accountability due to inattentiveness resulting to damage of property or body injury. In limited liability partnerships, vicarious liability provides that partners are protected from the misconduct of other partners. This provision allows the protection against malpractice of colleagues in the partnership business. Limited liability partnerships state that a person is accountable for the faults of another partner in a partnership if that person has an indemnification right for that partnership. In partnership businesses, members can have both vicarious and direct liability because they are owners of the businesses. The difference between vicarious and direct liability can be noted in the business settings. Vicarious liability is the liability enforced to a person because of the bad conduct of another person in the same business. Direct liability on the other hand is the liability enforced to an individual in a business due to their own misconduct. In this connection, direct liability is only enforced when the business creates a risk that could pose danger whereas the imposition of vicarious liability does not require that the business creates any room for the misconduct of its partners but can be held accountable for any loss created by the partners. Vicarious liability does not deal with the direct fault of an individual but makes an individual accountable for the faults other people related in any way to the individual, Lipinski T. 2006, pp 12. In partnerships and other joint businesses, vicarious liability can be imposed on the company or on other partners on the basis that the business relationship has created a risk which can be attributed to one of the partner’s misconducts. When the deeds of one partner are attributed to the business, it is reasonable that the company or partnership business is held accountable for the risk. Vicarious liability is not directly held to the companies or partnerships of the negligent partners. In this connection, a strong relationship has to be established between the partnership business and the negligent member who cause risks to the business. In partnerships, it is unclear whether partners are accountable for malpractices of other partners based in tort or in contract or whether partners are accountable for their colleague’s deeds on a negligent indemnification claim. The provisions of limited liability partnerships generally show that the partners of a partnership business do not have personal accountability for any business responsibilities or duties that come as a result of the misconduct of a co-partner under the partner’s control and administration. In previous days, partners in a partnership business would share the partnership obligations for the risks and losses caused by some of the partners in the business, Lipinski T. 2006, pp 24. In many partnership businesses, careless partners were not required to indemnify the business for damages that result from their negligence. Moreover, partners are required by the partnership to indemnify for their individual accountabilities incurred due to their carelessness in the scale of the joint business. In this case, indemnified partners contribute against other partners. In some instances, partnership businesses can leave the negligent partner to bear cost of their misconduct. Partnership businesses have to must provide a right to its partners to retain a full limited contribution to its partners. The inclusion of a contribution right in a partnership agreement brings about many questions, Tomasic R, Bottomley S and McQueen R. 2002. There is a concern on whether it is possible for a partnership to create a contribution duty that is imposable by the careless partner. In the case of a bankrupt partner, the trustee can impose the contribution duty. Creditors who have third party beneficiary are the ones who can enforce contribution duty. Partnership businesses allow the contribution of obligation by a partner to be limited in order to protect the partner from significant losses caused by negligent partners while making negligent partners wholly responsible for their own losses. According to Lipinski T. 2006, pp 56, vicarious liability provides that in partnership businesses, partners should contribute to normal carelessness judgments but not towards judgments that involve a partner’s gross carelessness, swindle, harassment and willful misconduct. In a partnership, lack of vicarious liability is a disadvantage to partners who work in areas where there are higher risks of malpractice judgments. This is because such partners will always bear the liability risks alone other than sharing the losses with partners in less risky departments of the partnership. Vicarious liability can also occur in trustees when a director of the trustee is held accountable to the deeds of another partner in the trustee. Vicarious liability in partnerships is very unique. This is because it is based on a direct connection between a wrongdoer and the employer of the wrongdoer. Therefore, the entire liability of the misconduct may be placed on employer or the employee who in this case has done a mistake. In partnerships, trustees and companies, a partner who has committed a mistake can be sued for their mistakes. In addition, the partnership, trustee or company can also be sued for the negligent deeds of one of their partners. Vicarious liability ensures financial payment of responsible parties. Since the partners of a partnership business have direct relationships, they have to have liability to the deeds of each of the partners Lipinski T. 2006, pp 24. In direct liability, partnerships, trustees and companies have direct accountability for their partner’s actions. Direct liability occurs to all members of a partnership, trustee or company because they are direct owners of the businesses, Karen W and Laurie A. 2006, pp 342. The partners are also directly accountable to any losses incurred or financial liabilities that cone as a result of poor operation of the partnership or company. Partners in a business can also face risks from their own misconducts because each partner can engage the business in a financial duty that is not profitable to the company, Sutton G and Geddes C. 2009. According to Bening L and Foster H. 2001, pp 89, the difference between vicarious liability and direct liability is that a direct liability is not limited to financial commitments rather, all partners are accountable to bad deeds committed by some of the partners and this leaves them liable to lawsuits. According to Gregory R. 2005, pp 54, partners in accompany, trustee or partnership business are directly responsible for all financial losses and damages as well as obligations that arise from their duties. When a partnership business is converted into a limited liability, it safeguards the business partners and ensures that they get maximum protection from any direct monetary obligation such as liabilities and official suits that come in the course of the business CCH Australian limited. 2002, pp 67. In a limited liability partnership, each of the business partners is limited. Limited liability partnerships protect the business partners from direct liability in matters that cause loss or damage in the business, Karen W and Laurie A. 2006, pp 347. Companies run by board of directors can also be converted into limited liability companies in order to protect the interests of the shareholders. In this connection, the shareholders are safeguarded from direct liabilities arising from the company’s operations. Many companies make use of limited liability to mean that the company’s shareholders cannot be forced to pay more than they have agreed to pay when their company accrues losses and damages. Direct liability can also be imposed upon a company or partnership business due to its poorly performing partners, Karen W and Laurie A. 2006, pp 341. In addition, it can also be enforced on a company for failing to supervise its partners hence leading to losses and risks. In a trustee, partners can have direct liability for the business because they have a direct relationship with the people dealing with the company. This applies whether the people dealing with the trustee are parties to the trustee or are beneficiaries to the company. Directors in a trustee may also owe a responsibility of care in tort that go beyond the relationship with the trustee and this result to direct liability to those dealing with the trustee, Barker D and Adams M. 2002, pp 389. References Andre T. 2003. international encyclopedia of comparative law, volume 11, part 1. New York. Martinus publishers ASX limited. 2011. Limited companies information. Web. http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=ASX. Retrieved on 7th April 2011 Barker D and Adams M. 2002. Essential Australian company law. New York. Rutledge Bening L and Foster H. 2001. Principles of verifiable RTL design second edition- a functional coding style supporting verification process in verilog. New York. Springer publishers CCH Australian limited. 2002. Guide book on Australian company law: highlighting the 1971 Amendments. CCH Australian limited Commonwealth Consolidated Acts. 2011. Common wealth consolidated Acts of Australia. Web. http://www.austlii.edu.au/au/legis/cth/consol_act/ Retrieved on 7th April 2011 Commonwealth consolidated acts. 2011. Corporations Act 2001. Web. http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/notes.html Retrieved on 7th April 2011 Dawson S. 2010.Focus on AASB 101: Presentation of financial statements. Web. www.treasury.act.gov.au/accounting/download/IAS_01k.pdf Retrieved on 7th April 2011 Gregory R. 2005. Financial reporting of environmental liabilities and risks after Sarbanes- Oxley. New York. John Wiley and sons Karen W and Laurie A. 2006. Transforming the pain: a workbook on vicarious traumatization (Norton professional books.). Canada. W.W Norton and company Lipinski T. 2006. The complete copyright, liability handbook for librarians and educators (legal advisor for librarians, educators and information profess). 2006. New York. Neal Schuman Robert B. 2010. Corporations’ legislation 2011. Australia. Thomson Reuters Sutton G and Geddes C. 2009. How to use limited liability companies and limited Partnerships. Canada. Success DNA. Inc Tomasic R, Bottomley S and McQueen R. 2002. Corporations law in Australia. 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