Corporations Law Securities and Investment Commission

Question: Describe about the Corporations Law for Securities and Investment Commission. Answer: Introduction: At Jervis Bay in New South Wales, commercial Scallop fishing is regulated with a quota system. Championed by Scallop Fishing and Marketing Act, it directs that a person shall only catch 50 tonnes of scallops in a calendar year. The Scallop Marketing Authority then buys all the scallops caught, up to the quota limit. Apart from catching more than 50 tonnes of scallop, there are more offences notified under the act. The rule that selling scallops to any other entity but the Scallop Marketing Authority is an offence and carries fine upto $100, 000. Bob Beech, one such scallop fisherman, feels that he has the ability to catch more than 50 tonnes of scallops in a year. His daughter encourages him to incorporate his company and thus make more money from the business. Objective: To understand whether Bob Beech will benefit from the above suggested idea and thus find the differences between incorporated business and normal proprietary business. Views: The main aim of the question to understand the meaning of incorporating a business and drawing out the parallels between proprietary business. Hence, we will start from understand what incorporating a business means. Incorporation means, forming of a corporation. It thus gives a person the license to work and also recognize them legally. There are be various kinds of corporations, like a business, non-profit organization, golf club and more. To incorporate a business, there are certain rules that are to be followed. A list of details about the business is also required to be generated and submitted when applying to be incorporated1(ASIC, n.d.). Following is to be understood before opening any business in Australia: Company Structure Purpose of business and name Operational modus operandi Understanding legal ramifications of running a company Getting consent from everyone involved/hired in the company Registration of the company under law Identifying the legal position of a company in terms of the name, Company number and Business number. After internal discussions and readying all the required documents to be presented legally, a company is registered. To do so, one must also understand the tax situation first. The tax checklist can be found with Australian Taxation Office.2(Australian Taxation Office, n.d.) To understand the tax implications, it is important to understand the difference between a sole trader and a company. There are major differences in terms of shareholding, trading, taxation, registration fees, paperwork, debt structures, and liabilities.3(Australian Government, n.d.) One can register a company through Australian Taxation Office, Australian Securities and Investment Commission via Australian Business Register.4(ATO, n.d.) Registering a company under incorporated tag has important benefits such as: Personal Asset Safety: The assets of under a corporation cannot be seized by the shareholders or creditors in case of defaulting or debts. The directors, stockholders and the top management is not liable to the company's debt position. Transfer of ownership: The ownership can be transferred from one person to other, either in part or fully, with ease. Lower Taxes: The taxes to be paid by a corporation are lower than the taxes to be paid by an individual. In terms of losses, a company can report losses without any limits and carry them forward. New Credit Ratings: The credit rating for a company will not depend on the credit rating of the individual who is running it or any other employee. Conclusion: It is a fairly advantageous position for Bob Beech in case he decides to incorporate his business. It would enable him to generate more business and diversify as an entity. In the event of having a corporation, Bob would also be able to flourish with more resources, more management tactics and ideas. This goes on to show that there is a stark difference in terms of the taxation laws, registration fares - even stamp duties for corporations as opposed to individuals.5 (ATO Stamp Duty, n.d.) 2. Introduction: The members of a hard rock band N/N control New Nirvana Ltd, a company that is setup to run their shows. A lot of other companies are setup as subsidiaries to New Nirvana Ltd, and they help in organizing various parts of the live performance. One such company is Nuclear Blast Sounds Pty Ltd, which helps with the sound equipment and setting up of the sound stage. In one of the concerts recently at Sydney, Nuclear Blast Sounds Pty Ltd set the sound too high, which resulted in permanent hearing loss for five audience members. Nuclear Blast Sounds Pty Ltd did not have a negligence insurance, and since this is a case of negligence, it is to be found if the five audience members have a case against the company. Objective: To understand laws of negligence in Australia and figure out if the audience members have a case against Nuclear Blast Sounds Pty Ltd. Also, it is important to understand that in case the standard care is breached, and if there is no negligence insurance, what are the steps that are to be taken for someone holding the other party liable. Views: First of all, it is important to understand the negligence law and rules in Australia. It is already clearly established that according to the civil liability, Nuclear Blast Sounds Pty Ltd owes a duty of care to all the audience and band members to ensure that there are no issues with the sound stage. Negligence in this case would be defined as failing to reasonably foresee the issue of understand that the noise is loud enough to cause damage.6(Price, 1936) This is the clause of reasonable foreseeability. The nature of the loss for the audience members would be under both economic and non-economical in nature. For the claim to be made, the major case would be made on the basis of loss of hearing, which would be tagged under non-economical losses.7(CIVIL LIABILITY ACT 2002 - SECT 3 definitions, 2002) It is important for the losses to be atleast 15% in severity compared to the most severe non-economical loss in any case. In case the loss is proved to be less than 15%, there is no provision of damages to be claimed. According the severity of the loss, damages can be claimed. The claim of damages can go up to $350, 000 in the most severe case.8(CIVIL LIABILITY ACT 2002 - SECT 16 determination of damages for non-economic loss, 2002) It is the duty of a professional to inform of any obvious risk related to attending the event, in case they can foresee the risk. Under such circumstances, the action of not informing about the higher decibel levels to the audience is a breach in the standard of care for professionals.9 (CIVIL LIABILITY ACT 2002 - SECT 5O standard of care for professionals, 2002) In this position, the audience members should claim for full economical damages and non-economical damages from the company. Since New Nirvana Company was the holding company that not only organized the concert, holds the band but also organized the sound stage, it is very much possible to hold them liable for the hearing damage caused to the audience. Conclusion: It is clear that the holding company, New Nirvana Ltd, the band members of N/N and particularly Nuclear Blast Sound Pty Ltd were liable for a standard of care that they breached according to the civic law.10 (Office of Parliamentary Counsel, 1936) In such an event, the audience members are fully capable of filing a complaint against the company in question. Since Nuclear Blast did not have a negligence insurance, it is upon New Nirvana Ltd to provide the proper damages according to the claim of the audience members. 3. Introduction: Simon, Michael and Don had set up a company called Millennium Pty Ltd, which dealt in project management space. Don was nominated as the solicitor for the company. In case of any disputes, regarding land purchases and sales, Don was the person responsible to be the legal face of the company. This was set in stone under the constitution of the company. Moreover, one of the articles in the constitution says that if there is any internal conflict in the company, the employees will refer to an arbitrator before any action in the court is taken. As time passes by, after finding another solicitor that seemed to be better than Don, Michael and Simon hire him to replace Don. Don thus takes legal action against Millennium Pty Ltd. Objective: To identify the legal position of Millennium Pty Ltd and understand the legal path that is to be taken in this case. Views: Since the company constitution regulates any legal action over the matter of internal conflict, the first wrongdoing by Don is to take legal action against Simon and Michael. It is also important to understand that Don, being an employee was bound by the constitution of Millennium Pty Ltd. 11(CORPORATIONS ACT, 2001). Under such a situation, the company is not liable to fight the suit against Don, as it overlaps the company bylaws. But in case the company has to fight the legal claim, then the only way to fight this argument is with a case of redundancy. The claim that Don would go ahead with would be of wrongful termination. 12(FAIR WORK ACT, 2009) The company has to prove that Don was redundant to the organization. One way of doing so would have been by not hiring a solicitor, which would deem the position of solicitor a not required add-on and thus establishing the company's viewpoint on the situation. Here on, the only way the company can get out of the situation would be by proving that the standard of work done by Don was not to the levels that were required for the company, and that the new solicitor was in fact capable, with a proven track record to be able to replace him and do a better job.13(Fair Work Ombudsman Redundancy, n.d.) Conclusion: The claim could be easily defeated with the arbitration matter. Once into arbitration, the company should use the track record of the new solicitor and compare it to the record of employment for Don. It has to be clearly proved that Don was not capable enough to carry out the job he was initially hired to do. It is also important to understand that the company is liable to serve a notice to Don, if at all that is mentioned in the constitution of the company. Millennium Pty Ltd is also to be held responsible for not ensuring that the employees are doing their job at their best interest and skill level. It is to also understand that the matter is internal, and in such circumstances, the onus is on the company to prove either redundancy or the inability of Don to handle the job of the solicitor. Bibliography Australian Securities and Investment Commission. Australian securities and investments commission. Retrieved October 8, 2016, from ASIC: How to start a company, https://asic.gov.au/for-business/starting-a-company/how-to-start-a-company/ Australian Taxation Office. Starting your own business. Retrieved October 8, 2016, from ATO, https://www.ato.gov.au/Business/Starting-your-own-business/ Australian Government. Difference between a sole trader and a company. Retrieved October 8, 2016, from Australian Government, https://www.business.gov.au/Info/Plan-and-Start/Start-your-business/Business-structure/Change-business-structure/Sole-trader-to-a-company/Difference-between-a-sole-trader-and-a-company Australian Taxation Office. Tax aspects of incorporating your business. Retrieved October 8, 2016, from Australian Taxation Office, https://www.ato.gov.au/Business/Starting-your-own-business/In-detail/End-a-business/Tax-aspects-of-incorporating-your-business/?page=3 Australian Taxation Office. Tax aspects of incorporating your business. Retrieved October 8, 2016, from https://www.ato.gov.au/Business/Starting-your-own-business/In-detail/End-a-business/Tax-aspects-of-incorporating-your-business/?page=27#Stamp_duty Price, S. Negligence. Retrieved October 8, 2016, from https://www.lawhandbook.sa.gov.au/ch01s05.php CIVIL LIABILITY ACT 2002 - SECT 3 definitions. Retrieved October 8, 2016, from https://www.austlii.edu.au/au/legis/nsw/consol_act/cla2002161/s3.html CIVIL LIABILITY ACT 2002 - SECT 16 determination of damages for non-economic loss. Retrieved October 8, 2016, from https://www.austlii.edu.au/au/legis/nsw/consol_act/cla2002161/s16.html CIVIL LIABILITY ACT 2002 - SECT 5O standard of care for professionals. Retrieved October 8, 2016, from https://www.austlii.edu.au/au/legis/nsw/consol_act/cla2002161/s5o.html Office of Parliamentary Counsel. (1936). South Australian legislation. Retrieved October 8, 2016, from https://www.legislation.sa.gov.au/LZ/C/A/CIVIL%20LIABILITY%20ACT%201936.aspx CORPORATIONS ACT 2001. (2001). Retrieved October 8, 2016, from Commonwealth Consolidated Acts, https://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/ FAIR WORK ACT 2009. (2009). Retrieved October 8, 2016, from https://www.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/ Redundancy, Fair Work Ombudsman, Welcome to the fair work ombudsman website. Retrieved October 8, 2016, from https://www.fairwork.gov.au/ending-employment/redundancy