Company Law Guide

By James Irving

A concise explanation of key topics of Australian company law, written in plain English. The e-book comes with a Creative Commons license to facilitate its use in for-profit commercial settings.

• Language: English
• Publisher: BookBaby
• Release date: May 10, 2013
• ISBN: 9780987572004

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1

Company Law Guide: Section 1: Introduction

Company Law, also called Corporations Law, is a huge subject. The main Australian law that governs corporations, the Corporations Act 2001 (Cth), currently has 1538 sections (it may have grown bigger by the time you read this) and four schedules, some of which are broken into sub-parts. It weighs a couple of kilos. And that is just the start. A popular book on directors’ duties, Directors At Work, is almost as thick as the Act, but thankfully weighs less and is printed in bigger font.

This Guide doesn’t intend to comprehensively summarise a subject of this complexity and size. But we do want to give visitors and Members some useful information to help them steer through the sea. A map, if you will.

The place to begin the journey, for most people, is to understand the range of business structures that the law provides. In Australia, the three most common structures are a sole trader, a partnership and a company. There are other structures, such as trusts and incorporated associations, as well as special bodies created under specific legislation (which can have all sorts of names), but the three I just mentioned are the most common.

A sole trader is what the name suggests, a person doing business on their own, either using their own name, such as Timothy Jones or a registered business name, such as Ye Olde English Sausage Bunne Man, in which case Tim would sign off on contracts as Timothy Jones trading as Ye Olde English Sausage Bunne Man. Catchy name. Good luck with that one, Tim.

The registration of business names in Australia used to be done on a State by State basis. Now there is a national registration scheme managed by ASIC, Australia’s corporate watchdog and regulator.

A partnership is also what its name suggests: two or more people (up to a total number controlled by the law) who have joined together to create a business. The difference between a legal partnership and some other form of collaboration, however, such as a joint venture, is that a partnership is a legal entity separate from the individuals who make it up. For example, it is liable to pay taxes in its own right, on partnership income.

The third option is what we will be discussing here: the