Question 1
(a)
Issue:
Whether Sue can enforce her security interest against Bling Bling Pty Ltd??
Legal principles:
Salomon v Salomon & Co Ltd [1897].
Application:
Sue conducted Bling Bling Pty Ltd, which means the incorporated company is a separate legal entity from its founder, shareholders and directors . Also, the company may ultimately be owned or controlled by one person (Sue) will not affect its status as a legal entity.
Later, Sue entered into a sale contract with Bling Bling Pty Ltd that purchased her business (Bling Bling). Under the contract, the company agreed to pay the full purchase price in the form of shares and it gave Sue future security interests over all of the company’s assets in the form of the debenture (company charge). …show more content…
Also, the registration fee in Australia is reduced from $800 to $433.
Second, it is important for Amy to distinguish the public company and the proprietary company. Section 45A(1) states that a company that is registered as, or converts to, a proprietary company and section 9 states that a public company means a company, other than a proprietary company. Under the current condition, Amy’s business is fit for the proprietary company because he operates a restaurant and it is simple to convert from a restaurant business to a company.
Third, compare to members’ liability in different types of companies, section 515 states that an incorporated company with unlimited liability means members’ personal assets may be available to pay the company’s debts since members are liable to pay company’s debts, liabilities and costs and expenses of winding up. On the contrary, if the shareholders paid full shares and their personal assets will not ordinarily be available for payment of the company’s debts under limited liability, which stated in section 516. In this case, limited liability incorporated company will be the better choice for Amy because he doesn’t have to pay debts by using personal
(a)
Issue:
Whether Sue can enforce her security interest against Bling Bling Pty Ltd??
Legal principles:
Salomon v Salomon & Co Ltd [1897].
Application:
Sue conducted Bling Bling Pty Ltd, which means the incorporated company is a separate legal entity from its founder, shareholders and directors . Also, the company may ultimately be owned or controlled by one person (Sue) will not affect its status as a legal entity.
Later, Sue entered into a sale contract with Bling Bling Pty Ltd that purchased her business (Bling Bling). Under the contract, the company agreed to pay the full purchase price in the form of shares and it gave Sue future security interests over all of the company’s assets in the form of the debenture (company charge). …show more content…
Also, the registration fee in Australia is reduced from $800 to $433.
Second, it is important for Amy to distinguish the public company and the proprietary company. Section 45A(1) states that a company that is registered as, or converts to, a proprietary company and section 9 states that a public company means a company, other than a proprietary company. Under the current condition, Amy’s business is fit for the proprietary company because he operates a restaurant and it is simple to convert from a restaurant business to a company.
Third, compare to members’ liability in different types of companies, section 515 states that an incorporated company with unlimited liability means members’ personal assets may be available to pay the company’s debts since members are liable to pay company’s debts, liabilities and costs and expenses of winding up. On the contrary, if the shareholders paid full shares and their personal assets will not ordinarily be available for payment of the company’s debts under limited liability, which stated in section 516. In this case, limited liability incorporated company will be the better choice for Amy because he doesn’t have to pay debts by using personal