mlc203vs2-t01 - TOPIC 1 Introduction to corporations law...

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© Deakin University T O P I C 1 Introduction to corporations law R E V I S E D B Y T R O Y K E I L Y F O R T H E U N I T T E A M Contents Introduction 1 Objectives 1 Learning resources 2 Textbook 2 How do you find your way around the textbook? 2 Legislation 2 Historical development 2 Early co-operative schemes 3 Development of the national corporations law 4 The Australian Securities and Investments Commission 5 The legal nature of a corporation 6 The company as a separate legal entity 7 Lifting the veil of incorporation 8 Lifting of the veil at common law 8 Lifting the veil: the statutory provisions 9 A company compared with other forms of business organisation 9 Partnerships 9 Trusts 11 Sole trader/proprietor 11 Unincorporated and incorporated associations 12 Summary 12 Nature of entity 12 Liability of members 12 Assets 12 Legal action 12 Continuity 12 Further resource Error! Bookmark not defined. Tutorial questions 13
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Corporations Law 1 Introduction Corporations law in Australia comprises both common law and legislation so we will examine both of these sources of law and the relationship between them, the history of corporations law and the policies that underpin it. To facilitate your learning, it is important to become familiar with the Corporations Act 2001 (Cth) and gain an understanding of its structure and purpose as well as the conceptual framework within which it was written. The Corporations Act can be a little confusing at first so an hour or so of exploring its content will be time well spent at the beginning of the unit. You will discover that the Act is divided into chapters, parts, divisions and sections. We suggest that you become familiar with its index. As the nature of law is to control and regulate relationships, we need to identify those relationships that are affected by the Corporations Act. Consider for example the relationships between a company and its shareholders, a company and its creditors, and a company and its directors. The Corporations Act creates the legal environment within which companies, once established, function. Recognition of public policy issues that underpin the law is also important. For example, there is a need for the Corporations Act to strike a balance between diverse and sometimes conflicting interests of different stockholders of a company in relation to facilitating business and the maximisation of profits of the company on the one hand, and protection of investors, creditors and the other stakeholders against unreasonable risks, on the other. Large corporate collapses, such as Enron in the USA, and HIH and One.Tel in Australia, have raised serious issues on corporate governance. Throughout this unit we will explore the various stages of the ‘corporate lifespan’ – conception, birth, maturity, expansion, decline and demise. Pre-incorporation, incorporation, management, regulation, insolvency and liquidation are some of the topics to be discussed. Understanding the structure and framework of the corporations legislation will assist you in this process.
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