TRIMESTER 1 2015

BUS200 Law of Business Organizations

Assessment 2
Student name
Student Id
University name
19th September 2015

1 | Page

TABLE OF CONTENTS

Part 1................................................................................................................................................3
Introduction..................................................................................................................................3
Process of company registration under section 117.....................................................................3
Share register for each class of shares under section 169..........................................................12
Sample Share register of Rose international Pyt Ltd.............................................................13
Prepare a Constitution................................................................................................................14
Conclusion.................................................................................................................................16
Part 2..............................................................................................................................................16
Section 254M (1).......................................................................................................................16
Section 124................................................................................................................................17
Section 232................................................................................................................................18
Bibliography..................................................................................................................................19

2 | Page

PART 1

INTRODUCTION
This paper aims to evaluate process of registering a proprietary limited company under
corporation act 2001, Australia. Primary objective of this paper is to analyze the way a company
can be formed under this law, different procedures to be followed. It includes three main
descriptions on process of registration, information on share register and preparation of
constitution to guide internal management of the company.

PROCESS OF COMPANY REGISTRATION UNDER SECTION 117

Section 45A(1) of the corporation act help in defining proprietary limited company as the one
managed privately by minimum one shareholder and maximum 50 shareholders in the company;
in management of the company there must be at least one director residing in Australia; further
this type of firms are not allowed to raise funds. Deciding on the structure of the company is the
first step of starting a business. Next step is to decide a business name; in this case it would be
Pyt Ltd, which also signifies it is limited liability companies as unlimited liability company have
N.L as their abbreviation.
Next step is to register company, there are two ways of registering a company under ASIC, either
company can service from number of service providers who uses ASIC software directly to
register a company, otherwise individual can also fill form 201 which is an application for
registration as an Australian company, give required fees along it and submit it Australian
Securities and Investments Commission.
3 | Page

Australian Securities &Investments Commission

Form 201
Corporations
Act 2001
117

Application for registration as an Australian company

Use this form to apply to ASIC for registration of a company under the Corporations
Act 2001.

LODGMENT DETAILS
An image of this
form will be available
as part of the public
register
Who should ASIC contact if there is a query about this form? ASIC
registered agent number (if applicable)
NA
Firm/organization
NA
Contact name/position description
Mrs Sara Taylor
Telephone number (during business hours)
8888882223
Email address (optional)
Sara@vsdmail.com
Postal address
789 Elizabeth road
Suburb/City State/Territory
Vic

4 | Page

Postcode

9801

1. State/territory of registration
I apply for registration of the company under the Corporations Act 2001 and
nominate the State or Territory in which the company will be taken to be
registered.
Victoria Give State or Territory

2. Details of the company

Yes
Does the company have a proposed company name?
If yes, the proposed company name is
Name reservation number (if any)

Rose international
No

The company name on registration will be its Australian Company Number

(ACN).

Tick the legal elements that apply Pty Ltd

No
Is the proposed name identical to a registered business name(s)?
Type of company
Class of company

Proprietary
company
Limited by Shares
Company

Registered office address

At the office of, C/- (if applicable)
Office, unit, level

Office

Street number and Street name

102 St. Kilda Road

Suburb/City State/Territory Postcode Victoria 8796

Yes
Does the company occupy the premises?
5 | Page

3. Appoint officeholders
Office held
Director
Yes

Yes

Secretary

Family name
Thompson
Given names
Nancy
Former name
Nancy

Street number and Street name

67 Dunblane Street,

Suburb/City State/Territory Postcode Country (if not Australia)

Camperdown
Date of birth / / [D D] [M M] [Y Y]
[24] [01] [1979]
Place of birth (town/city) (state/country)
Melbourne

6 | Page

Appoint another officeholder

4. Appoint officeholders
Office held
Director
Yes

Secretary

No

Family name
Scott
Given names
Vicky
Former name
Alex

Street number and Street name

306, Elizabeth street

Suburb/City State/Territory Postcode Country (if not Australia)

Melbourne
Date of birth / / [D D] [M M] [Y Y]
[04] [02] [1983]
Place of birth (town/city) (state/country)
Spain

5. Identify ultimate holding company

Will the company have an ultimate holding company upon registration?
No

7 | Page

------------------------------------------------------------------------------------------------------------

6. Share structure table

Share class
code

ORD

Full title

Total
number
issue

Total
amount
paid on
these
shares

Total
amount
unpaid
on these
shares

Ordinary

$1

shares

40

No
Are any of these shares issued other than for cash?

7. Details of members
Use this section to notify the name and address of each person who consents to
become a member
Family name
Almedia
Given name
Peter
Street number and name
107 Espalaned roads
State
Melbourne
Pin code
9636

8 | Page

Country
New Zealand

Shar
e
class
code

Num
ber
of
share
taken

ORD

20

Amo
unt
agre
ed
for
per
share
in $
2

Total
amou
nt
paid
on
share
s

Amo
unt
unpai
d

Total
amou
nt
unpai
d

40

10

10

Fully
paid?
(Y/N)

Benefic
iary
held
(Y/N)?

Detail of another member

Use this section to notify the name and address of each person who consents to
become a member
Family name
Alves
Given name
David
Street number and name
876 Maria street
State
Victoria
Pin code
8500

Country
New Zealand
9 | Page

Shar
e
class
code

Num
ber
of
share
taken

ORD

10

Amo
unt
agre
ed
for
per
share
in $
2

Total
amou
nt
paid
on
share
s

Amo
unt
unpai
d

Total
amou
nt
unpai
d

20

Fully
paid?
(Y/N)

Benefic
iary
held
(Y/N)?

Declaration by the applicant

I Mrs Sara Taylor apply for registration of a company on the basis of the information
in this form and any attachments. I/we have the necessary written consents and
agreements referred to in the application concerning the member and officeholders
and I/we shall give the consents and agreements to the company after the company
becomes registered. The information provided in this application and in any
annexures is true and correct at the time of signing.

Signature of applicant
Payment has been attached Yes
Name of applicant

Mrs Sara Taylor

Capacity of applicant

Individual

] Sara Taylor
If the applicant is an individual - 1 signature required.
Date signed

[19] [09] [15]

10 | P a g e

Sample consent letter

CONSENT TO ACT AS A DIRECTOR AND SECRETARY OF ROSE INTERNATIONAL
PYT LTD

I, Nancy Thompson hereby consent to my appointment as a Director and Secretary of Rose

international Pyt ltd, in compliance with the requirements of the Corporations Act 2001, provide
the following information:

Any former names: No

Date of Birth: [24] [01] [1979]
Place of Birth: Melbourne

Signed by: Nancy Thompson

11 | P a g e

SHARE REGISTER FOR EACH CLASS OF SHARES UNDER SECTION 169

According to ASIC, company that issue share capital must keep a track record of all the shares
issues, to whom they were issued, at what price and all other information, which is called share
register and also register of members. It includes detailed information regarding all shareholders
of the company, section 169 of the corporation act also mention regarding maintenance of an up
to date index to register for company with or more 50 members (austlii.edu.au, 2014). It helps in
keeping detailed record regarding shares. Generally companies issue only one class of shares
which is known as ordinary shares, however there is provision for keeping different class of
shares in company, which is being increasingly getting accepted in the market, it include
ordinary shares, preferential shares, redeemable shares, management shares, voting shares and
other class of shares (Tomasic, Bottomley, & McQuee, 2002). Basic information that register
include about each member are as follow:

It includes information regarding name and address of each shareholder in the company
Date on which they became shareholder with the company
Shares bought and occupied by them, amount they paid and due
It also include information regarding beneficially held shares by any member
However, according to law shares hold for someone elses benefit such as nominee are

regarded as non-beneficially held shares

According to section 169 (7) it should also include information regarding former
members and time from which they stopped being part of the company

Apart from information regarding each shareholder, this register also needs to include detailed
data on shares of the company, which are as follow;
12 | P a g e

Date of share allotment to any member

Number of shares allotted to each member
Amount at which shares will be allotted
Class of shares allotted
Shares were fully paid or not, if not then it must include separately information regarding
paid and unpaid amount of shares

According to ASIC law, if there is any change in share register of Proprietary companies,
then it must be informed by submitting form 484. If there is any share issued in contract, on
non-cash basis then it must be informed to ASIC within 28 days time, by filling form 484 C
and 207 Z. However, proprietary companies also need to inform regarding share transfer
made to ay existing member or new member.

SAMPLE SHARE REGISTER OF ROSE INTERNATIONAL PYT LTD

13 | P a g e

Name

Date of
birth

Nancy
Thompson

[24] [01]
[1979]

Vicky scott

[04] [02]
[1983]

Peter
Almedia

[21] [05]
[1978]

David
Alves

[31] [11]
[1983]

Address

67
Dunblan
e Street,
306,
Elizabet
h street

Number of
shares

Class of
shares

Date of
introducti
on of
sharehold
er

Sold date

15

ORD

21-09-15

21-09-15

15

ORD

11-09-15

11-09-15

206 Park
roads

20

ORD

19-09-15

19-09-15

876
Maria
street

20

ORD

18-09-15

18-09-15

Notice

Unpaid
amount
$10

PREPARE A CONSTITUTION
While planning for opening a company and before registering it, it is crucial to decide the
internal management system of the company; according to section 134 of the corporation act, it
can be managed in three ways (asic.gov.au/, 2015), mentioned under:

Forming an own company constitution

Following replaceable rules mentioned in the act
Deciding on a combination of above two

Constitution can be defined as a document prepared by the management of the company, which
include detailed information on rules and regulations that company will follow. However section
135 of the corporation act 2001 states that company registered after 1st July 1998 can also use
replaceable rules instead of constitution for internal management of the company. Further,
company can displace replaceable rules, its section or provision (Groves, 2014).
If a company decides to opt for a constitution, then for a proprietary company it is not mandatory
to present it at the time of registration, instead management can use it at the time of requirement.
14 | P a g e

If company mention its objectives in the constitution, then it is mandatory to abide it, unless it is
being modified using special resolution (Shepherd & Ridley, 2015).
Constitution of the company will include heading as
THE CONSTITUTION OF ROSE INTERNATIONAL PTY LTD
ACN: 123 456 789

Information on different definition and interpretations, which include meaning of words

used
It should clearly mention non applicability of replaceable rules under section 135 and

141 in the business.

It should include information on nature of business, its objectives
It should include detailed information on management of the company, this section of the
constitution include information on company powers, board of directors, powers of
directors, appointment and removal of directors, notice of meeting, directors,
disqualification of directors, company secretary, auditor, number of directors, alternate
directors, disclosure of interest, conflict of interest, managing director appointment,

remuneration and ceasing to hold office.

Next section of the constitution will be meetings of directors, this will include
information on meeting regulations, rules for general meeting, quorum, voting and rights,
resolution by circular, minutes of meeting, validation of acts of directors, execution and

company seal
Third category of the constitution will be general meetings of the company, it will include
information on notice of meeting, quorum, adjournment, chair, votes, voting rights, votes
by joint holder, information on members who are not allowed to vote, method of voting,
proxy
15 | P a g e

Fourth category of the constitution will be shares, which include information on capital of
the company, rights and shares , issues of shares, redeemable and preferential shares,
register of member, share certificate, issues of shares, calls for shares, forfeited shares,
shares buyback, meeting of member of a class of share as per section 254 A, borrowing
powers, , special business, loans, special resolutions, dividend, accounts, notice, winding
up, indemnity to officers, secrecy, amendment rules (austlii.edu.au, 2014).

CONCLUSION
Above plan will be used to register a propriety company appropriately in Australia and prepare a
constitution and share register for the company planned.

PART 2

SECTION 254M (1)

Section 254 M (1) of the corporation act 2001 provides information on liability of the
shareholder in regards to partly paid shares. When shares are issued by company, investors
willing to invest in the company need to pay some value of the share, however, if full value of
shares are paid by the investors it is known as ordinary shares; however company can also decide
to give shares by taking only some amount of the face value and remaining amount later on, this
is known as partly paid shares (CCH Australia Limited, 2011). In such cases, calls up dates are
fixed by the company for remaining amount of shares as per their fund requirements. According
to this law, if any shareholder have bought partly paid shares from a limited liability company,
then they are liable to pay remaining share amount on call according to terms and condition at
16 | P a g e

which shares were issued. According to section 514 to 529, in many instances in case of winding
up, shareholder is also liable as contributor. However according to subsection 2 in case on no
liability company shareholder is not responsible to pay according to share calls or any
contribution at the time of winding up as no contract gets formed.

SECTION 124
Legal capacity and power of a company has been defined under section 124 of the corporation
act 2001. According to this law, accompany has a power and legal capacity of both individual as
well as body corporate; it has the authority to issue shares and debentures, cancel shares in the
company, it has the power to issue grant over unissued shares, it has the authority to distribute
any of the company property among its members, it can issue grant security interest in uncalled
capital, it has power to register a company or to do anything under law (austlii.edu.au, 2014).
This section help in defining company as a separate legal entity, separate from its directors and
other members. This law helps company in taking actions and decisions like a natural person,
for example, it can hold property, it can sue individuals or any other party can sue this company.
For example, case of Salmon vs. Salmon or ASIC vs. Alder (2002) helped in understanding
importance of this clause clearly as court have identified business as separate legal entity other
than its operators in these cases. However, this law does not allow company to indulge in any
unauthorized or illegal tasks (Cassidy, 2006).

SECTION 232
Section 232 of the corporation act 2001 deals with remedies regarding oppressive conduct of
affairs by the company; in case of any illegal or unfair act, court can issued order against the
17 | P a g e

company. According to this law, court can issue order against the company if the conduct of
company, an actual, opposed, proposed or any actual, opposed or proposed resolution of the
company is against the welfare of the members of the company or unfair or discriminatory
against any member of the company (www.austlii.edu.au, 2014). For the purpose of this clause,
member has been defined as any person to who shares of the company has been transmitted.
Primary objective of this law is to ensure that company does not have authority or power to do
any illegal or discriminatory act; it is responsible for acting in the best interest of its members.
However, to prove claim under section 232, there is need to conduct objective test that help in
evaluating conducted complain whether it is unfair or not, by analyzing it from a viewpoint of a
hypothetical reasonable person, for example, Morgan vs. 45 Flers avenue Pyt Ltd (1986). Next
factor is act or omission which can be defined as a trigger to application, for example forgoing a
company opportunity for letting other company be benefited from it. This clause is applicable to
both isolated conduct in past as well as continuous act of conduct (Cassidy, 2006).

18 | P a g e

BIBLIOGRAPHY
asic.gov.au/. (2015, July 27). Constitution and replaceable rules. Retrieved
September 19, 2015, from asic.gov.au: http://asic.gov.au/forbusiness/starting-a-company/constitution-and-replaceable-rules/
austlii.edu.au. (2014). CORPORATIONS ACT 2001 - SECT 124. Retrieved September
19, 2015, from austlii.edu.au:
http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s124.html
austlii.edu.au. (2014). CORPORATIONS ACT 2001 - SECT 169. Retrieved September
19, 2015, from austlii.edu.au:
http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s169.html
austlii.edu.au. (2014). CORPORATIONS ACT 2001 - SECT 254A. Retrieved September
19, 2015, from austlii.edu.au:
http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s254a.html
austlii.edu.au. (2015). CORPORATIONS ACT 2001 - SECT 117. Retrieved September
19, 2015, from austlii.edu.au:
http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s117.html
Cassidy, J. (2006). Concise Corporations Law. Mason: Federation Press.
CCH Australia Limited. (2011). Australian Corporations & Securities Legislation
2011: Corporations Act 2001, ASIC Act 2001, related regulations. Sydney :
CCH Australia Limited.
Groves, M. (2014). Modern Administrative Law in Australia: Concepts and Context.
Cambridge: Cambridge University Press.
Nolan, J. L. (1996). Australia Business: The Portable Encyclopedia for Doing Business
with Australia. Canada: World Trade Press.
Ryder, N., Griffiths, M., & Singh, L. (2012). Commercial Law: Principles and Policy.
Cambridge: Cambridge University Press.
Shepherd, C., & Ridley, A. (2015). Company Law. London: Routledge,.
Tomasic, R., Bottomley, S., & McQuee, R. (2002). Corporations Law in Australia.
Sydney: Federation Press.
www.austlii.edu.au. (2014). CORPORATIONS ACT 2001 - SECT 232 . Retrieved
September 19, 2015, from www.austlii.edu.au:
http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s232.html

19 | P a g e

20 | P a g e

21 | P a g e