Which of the following reflects public concerns about the modern company? Companies are essentially powate bodies that serve the purpose of faclitaung invesiment and thus increasing social benefits thvough more efficient and proftable businesses and competive manets Companies are a small part of the Ausvalan econcmry The greatest activity Within the Australian economy is through indviduals and their enterprises Companies are now much lagger than the smaller companies ttat were created historically this gves investors in cer commurity much more safety when investing in companies The passing of various repulatons means that comparies are how fully controled and responsible for what they on What is the role of ASIC with regard to the registration and regulation of companies? Choose the most appropriate response. ASiC registers and regulates all businesses in Australia. This includes companies. partnershipt, incorpcrated associations and cooperatwes ASIC only regulates thase companies which are not in the financial services sector. All financial service comparies are regulated by Australian Prudentiai Regulation Authotity Whie AsIC regulates companies a government deparment organises the registration of companies ASIC has the roie of registering as near compinies and keeping a database of that registration. Those companies ace then sieject to ASIC regutation and the rules contained in the Corporations Act Which bodies regulate Australian companies? Which is the most appropriate answer? There are various bodies regulating Australian companies, but the major regulators are ASIC, the ATO and APRA All regulatory bodies apply to companies in Australia, except APRA which only applies to financial institutions The only body that regulates companies within Australia is ASIC Australian companies are not subject to the ACCC since consumer law applies only to retailers What is a company? Which of the following is correct? A company is any recognised legal entity created by Australian legislation A company is any body which is a recognised legal entity A company is not defined under Australian legislation, so many legal entities can be considered as a company A company is a body that is basically registered under the Corporations Act as a 'company' What laws apply to a sole trader? Which of the following is correct? If a sole trader does register a business name, it has limited liability A sole trader must register as a sole trader with the state authorities Sole traders are not subject to certain laws which are applicable to large businesses, e.g. occupational health and safety laws, taxation and employment law Very few regulations specifically apply to a sole trader, though a sole trader may need an ABN in order to register a business name What are the rights of beneficiaries within a trust? The rights of beneficiaries are particularly limited; they have a right to inspect the records of the trust, but not force a payment from the trust The beneficiaries of any age can force the trustee to pay out the property from the trust The beneficiaries have the right to enforce applupriate administration of the trust, including the ability to obtain court orders over the trustee, e.g, to distribute property to the beneficiaries if the trust deed allows for this Beneficiaries cannot end a trust and force a distribution of property; only the trustee can do this What is meant by the element of 'with a view to profit' when proving whether a partnership exists? Which of the following is correct? Clubs and societies have a 'view to profit' when running their fundraising activities, and therefore must be considered and treated as partnerships A view to profit refers to the fact that the business aim is to make profit. If no profit is made in the course of running the business, that enterprise cannot be deemed a partnership A view to profit means that the enterprise intends to make a profit from the enterprise and to share that profit amongst the participants, which in turn determines a partnership exists If any enterprise composed of a group of individuals, intends to make a profit from its activities, then that group automatically becomes a partnership What is the liability of partners to outsiders of the partnership? Which of the following is correct? Partners are liable for every transaction undertaken by their fellow partner. whether within the ambit of the partnership or not The partners can make an agreement that they will not be liable for each other's actions One of the advantages of a partnership is that individual partners are not liable for each other Partners are jointly liable to outside parties where they conduct a transaction which falls within the usual business of the partnership in the usual way What is the difference between a joint venture and a partnership? The difference between a joint venture and a partnership is that partnerships are required to be registered, whereas joint venthes are not There is no difference between a joint venture and a partnership, both share the profits of their enterprise, and both similarly are liable for each other's actions Joint ventures are composed of companies, whereas partners must be natural persons A joint venture is purely a contractual arrangement; there is no business in common and each party retains their own property and liabilities What is the general liability attached to a trust? The settlor must ensure that the beneficiaries will ultimately be paid from the trust A trustee has an obligation to act as a fiduciary duty to preserve the property of the trust, to act carefully and honestly so that the interests of beneficiaries are upheld The trustee usually has no liability under the trust according to the trust deed created between the parties The beneficiaries will be liable for any problems that occur within the trust, particularly if property is lost What is the significance of the Salomon v Salomon case regarding 'one person' companies in Australia? Which of the following is correct? A one person company can comply with the principle of Salomon v Salomon; the member can be a director and creditor of the company and act in different capacities while preserving the separateness of the company entity Salomon's case indicates that a one person company might not be a separate entity, but rather an agent of its members Salomon's case does not apply to one person companies, Salomon v Salomon was decided under English law with seven members within the company Salomon's case was decided on the basis of a large number of members constituting the company; a one person company by contrast does not have a separate legal entity How does $588G of the Corporations Act relate to piercing of the veil? Which of the following is most correct? Under $588G the directors of a company must ensure the company does not incur debts while insolvent, and if they do they will be held personally liable to the creditors Section 588G states that a company will be dissolved, if the directors breach any of the director's duties outlined in ss 180184 Section 588G specifically states that directors are protected from legal claims of creditors, if those directors can show they did not know that a company was insolvent Section 5886 allows for directors to be personally liable for any debts incurred by the company, whether the company is insolvent or not What are the statutory rules that an outsider can invoke against an agent of the company who has acted improperly? Under s 129, as long as the signatures on a contract have been verified, the contents of the contract can be assumed to be compliant with the company constitution Under s 128 an outsider is entitled to make all of the assumptions under s 129 which assume that the persons with whom they are dealing and their actions are compliant with the company constitution Under s 128 an outsider is required to read and check the company's constitution, either themselves or their lawyers, to ensure that any contract complies with the company's rules While various assumptions can be made about the compliance of a contract with the company's constitution, the outsider needs to ensure the agents they are dealing with have been registered with ASIC. Can a natural person be an accessory to a crime committed by a company? An accessory to a crime can only be determined if there is a statute imposing criminal liability on that person for a company's crimes Where a company is found to have committed a crime, the persons who assisted the company may also be liable as accessories to that crime Under Australian law the persons who manage a company are strictly separate legal entities and cannot be an accessory to a crime committed by a company A company is an artificial legal entity, therefore it cannot commit crimes, which means the management of the company cannot be accessories, rather the management will be charged with the crime