Question 4

Henry is 19 years old. He and his best mater James are entrepreneurs and they are running a successful window cleaning business in the form of a partnership. Both are concerned about their potential liability as partners.

They have learned from a friend that they can protect themselves from liability if they run their business as a company and not as a partnership. As a result, they decide to incorporate their business. They want to be in control of the company and they would like to be the only members in the company. Further they want to become an employee of the business so that they can be covered by workers' compensation and superannuation.

Henry lives at: 103 Rue Avenue Ashfield 2013

James lives at: 40 Magnus Street Maroubra 2035.

a- When a business is a partnership, can James and Henry be employees of the partnership when they are partners?

b- What type of company should Henry and James choose? Explain why.

c- What are the formalities that they need to complete to be able to create a company?

d- Assuming Henry and James decided to incorporate a proprietary company, how many directors does the company need to have?

e- What is the role of a company secretary and is it necessary to have a company secretary in a proprietary company?

f- Should Henry be a director of the company if he wants to be involved in the management of the company or is it enough for him to be a member? Justify your answer.

g- Will Henry and James be able to register the company with the name 'Windows Co Pty Ltd'? (Search the National Name Index on ASIC website and determine if it is possible to register a company under the proposed name. If such a company already exists find out as much information as you can about it from the site.)

h- Henry and James decide to register the company under the following name: 'Henry and James Windows Co Pty Ltd'. Is the name available? If so, how can they ensure that no one else uses it before their company is registered?

i- Is the new company required to have a registered office? And if so, does it need to be open to the public?

j- Now that you have all this information, go to ASIC website and print the form that needs to be filled to register the company. Act on behalf of Henry and James in filling the form.