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Contents
1.0 Introduction ................................................................................................................................. 4
2.0 Sole Trader Enterprise Definition: .................................................................................................... 5
2.1 Formalities: .................................................................................................................................... 5
2.2 Liabilities: ...................................................................................................................................... 5
3.0 Partnership Definition: ...................................................................................................................... 5
3.1 Formalities of a Partnership: .......................................................................................................... 6
3.2 Liability of a Partnership: .............................................................................................................. 6
3.2.1 Partners Liability- Incoming and Outgoing partners ............................................................... 7
3.3 Partnership duties: ......................................................................................................................... 7
4.1 Company limited by share definition: ............................................................................................... 8
4.2 Formalities company limited by share: .......................................................................................... 8
4.3 Company liability: ......................................................................................................................... 9
4.4 Features of the company limited by share: .................................................................................... 9
4.4.1 Separate legal entity: ............................................................................................................... 9
4.4.2 Corporate Veil: ...................................................................................................................... 10
4.5 Capacity to sue and be sued ......................................................................................................... 11
4.6 Perpetual Succession & Power to hold property ......................................................................... 11
5.0 Analysis of Company Creation: ...................................................................................................... 12
5.1 How are the companies created? ................................................................................................. 12
5.1.1 Registration: .......................................................................................................................... 12
5.1.2Shelf Companies: ....................................................................................................................... 13
5.1.3 Registered office: ...................................................................................................................... 13
5.1.4 Running of the company: ...................................................................................................... 13
5.2 Change of Company Name: ......................................................................................................... 14
5.2.1 How to lodge change of name: .............................................................................................. 14
5.3 Replaceable Rules and Constitutions: ............................................................................................. 14
5.4 Consent of members and officers: .................................................................................................. 15
5.6 Certificate of registration: ............................................................................................................ 15
5.7 Corporate Key:............................................................................................................................. 15
5.8 Additional information regarding company name(ASIC): .......................................................... 15
5.3 Omission of Limited from name: ............................................................................................. 15
5.4 Display of company name: .......................................................................................................... 16
6.0 Conclusion ...................................................................................................................................... 17
Reference: ............................................................................................................................................. 18
Table of Cases: ...................................................................................................................................... 19


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1.0 Introduction

There are different ways to operate a business in Australia within the legal frame work. Aim
of this essay is to understand three types of business entity, Sole Traders, Partnership and
Company limited by share. This essay will not only define those types of business entity
where appropriate will suggest the required legislation as per the Corporations Act.

The growth of different types of entities not only has increased the business being exposed to
potential liability due to lack of knowledge in regards to Corporations Act and companies
being wound up because the way they are set up is without any ground rule in aspect of their
duty as different types of business owner. To expand the state of the law in regards to Sole
Traders, Partnership and Company limited by share, this essay will determine what principle
is to be derived based on the Corporations Act with supporting cases which are analyzed.

The entity Sole Traders, Partnership and Company limited by share has different sets of
regulations where appropriate to follow. This essay will explain each one of them and state
the nature of the entity by their definition, their formalities and most importantly their
liability as a Sole Trader, Partnership and Company limited by share.

The essay will define, compare and contrast and finally analyze one aspect of company
limited by share (registration process) to explore the clarity in understanding the Corporations
Act. In doing so, it will interpreter the legislation on the basis of business entity and inform
the best possible outcome for the potential business owner.


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2.0 Sole Trader Enterprise Definition:
A person carrying on business as an independent individual is called the Sole Trader (Harris,
Hargovan, & Adams, 2011). The term means that the business is owned by an individual
natural person (Pentony, Graw, Parker, & Whitford, 2013). To start the business they
contribute to the enterprise. Sole trader runs the business with or without the employees and
profit of the loss on the entity is absorbed by the sole trader (Morrison & Anderson, 2010).
There is no separation between the business and personal affairs of a sole trader in matter of
law (Pentony, Graw, Parker, & Whitford, 2013).
2.1 Formalities:
Setting up a sole trader business is very minimal (Pentony, Graw, Parker, & Whitford, 2013).
The business is created with the minimal legal formalities and it is the cheapest and easiest
way to create the business (Parker, Veljanovski, Clarke, & Posthouwer, 2012). Sole traders
need to comply with the regulation which is universal to all business such as registration of
company name if they are intending to trade under different name than their own, business
address, complying with occupational health and safety, workers compensation, local
government regulations and taxes of various type (Pentony, Graw, Parker, & Whitford,
2013).
2.2 Liabilities:
Sole traders are not a separate legal entity. It is indistinguishable from the business therefore
has the unlimited liability for all debts, crimes and civil liabilities arising from the conduct of
the business and the taxation for the entity is not separate from the personal affairs as there is
no separation from between them (Pentony, Graw, Parker, & Whitford, 2013).
3.0 Partnership Definition:

Partnership is defined by the Partnership Act 1895 (WA s 4, 7) as Partnership is the relation
which subsists between persons carrying on a business with a view of profit (Pentony, Graw,
Parker, & Whitford, 2013). Partnership can be formed in association with different entities as
Law defines Persons as an entity (Morrison & Anderson, 2010) whereas in Sole Trader
enterprise, it alone reaps and bears the profit and liabilities of the business (Vermeesch &
Lindgren, 1998).

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The definition of partnership excludes the agents who are working on behalf of the
incorporated companies for profit such as club, instead it is making profit to achieve
organisations goal (Pentony, Graw, Parker, & Whitford, 2013).
3.1 Formalities of a Partnership:

Formalities forming partnership is very few. Forming partnership may only include obtaining
the ABN number if they wish to conduct business other name than their own (Woodward,
Bird, & Sievers, 2005).Partnership may exists in law even though persons involved did not
set out to create one as such in case of Canny Gabriel Castle J ackson Advertising Pty Ltd v
Volume Sales (Finance) Pty Ltd (1974) where the court decision was that of a partnership
due to both parties had joined commercial enterprise with a view of a profit, they had agreed
to share and there was to be mutual agreement on the particular enterprise (Pentony, Graw,
Parker, & Whitford, 2013).

But in the case noted in Turnbull v Ah Mouy (1871), due to the nature of the transaction
being a single venture without any intention to take any subsequent venture, the business did
not constitute the carrying on of a business hence the parties were not in a partnership
(Vermeesch & Lindgren, 1998).

There are some complications regarding partnership. The issue arises when one of the
partners wants to exit which in turn dissolves the business. Other issue regarding the
partnership is according to the property act WA s 8 under the Joint ownership of property is
Joint tenancy, tenancy in common, joint property, or part ownership does not of itself create
a partnership as to anything so held or owned, whether the tenants of owners do or do not
share any profits made by the use thereof" (Pentony, Graw, Parker, & Whitford, 2013).
As noted in Davis v Davis (1984) that owning property together cannot be an only factor for
being in the partnership. It has to go beyond that as such in this case where partnership was
deemed to be in place due to the fact that their actions in operating the company went beyond
the co-ownership to the partnership in the business (Harris, Hargovan, & Adams, 2011).
3.2 Liability of a Partnership:

Liability in partnership is unlimited. Their business affairs are bound individually and as a
group for the debt while they are in partnership (Parker, Veljanovski, Clarke, & Posthouwer,
2012). In the partnership they are individually and as a group liable for the debt incurred and
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they can be sued individually leaving the other partners to reimburse to the litigant (Pentony,
Graw, Parker, & Whitford, 2013). If only one of the partners is sued than the other partners
can defend as co-defendant or they can contribute to other partner for the amount paid
(Gibson & Fraser, 2009).

As in case Polkinghorne v Holland & Whittington (1934) the plaintiff sued the all the
partners as the partners in fact act in the ordinary course of business affair as the Act WA s
17 defines that all the partners are jointly and severally liable for torts (Pentony, Graw,
Parker, & Whitford, 2013).
3.2.1 Partners Liability- Incoming and Outgoing partners

In partnership incoming partner is not liable for the debt incurred to the creditors before
becoming a partner (Fletcher, 2007). However new partner may agree to the liability incurred
before on the condition as joining the firm by way of express not only in writing but the way
they conduct in the business as such in Rolfe and bank of Australasia v flower salting & Co(
1865) (Vermeesch & Lindgren, 1998). The newly appointed partners T & S continually
operate in the business where they were fully aware of the entries in the accounting book of
the firm (Vermeesch & Lindgren, 1998).

But the retiring partner may still be liable for the debt and obligations incurred during the
partnership (Pentony, Graw, Parker, & Whitford, 2013) or failure to give proper notice to the
creditors of cessation of his partnership with the firm as in the case Hamerhaven Pty Ltd v
Ogge (1996) where the court held the decision that mere alteration of the name in the
company letter head did not constitute cessation of the partnership (Vermeesch & Lindgren,
1998) even though debt has been incurred after Ogges termination of the partnership.
3.3 Partnership duties:

In partnership, relationships between the partners are fiduciary (Vermeesch & Lindgren,
1998). The factors affecting the business must be disclosed to all the partners and to do that
good faith is required in the (Gibson & Fraser, 2009). As such case noted in United
Dominions Corp v Brian Pty Ltd (1985) where partners good faith was ruptured by not
disclosing the profit made.


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4.1 Company limited by share definition:

There are a number of ways to conduct business. The two most important types of companies
are public and proprietary (Gamble, Plesis, & Neal, 2008). As per CA 9, the company
limited by share means, shareholder liability is limited to the company up to the paid amount
on a share and any amount that is unpaid (Parker, Veljanovski, Clarke, & Posthouwer, 2012).
In theory creditors give credit to the company on the funds made up of amounts paid or
payable by members for their share and creditors do not have unlimited remedy on the
liability by the shareholders (Ford, 1990).
4.2 Formalities company limited by share:

The company is created by registration in ASIC and there are number of procedure required
to create a company (Hanrahan, Ramsay, & Stapledon, 2011). It comes into existence under
CA s 119 after registration (Harris, Hargovan, & Adams, 2011). The features includes the
company as separate legal entity, has the capacities of a natural person and when the
company is limited by share, the liability of the shareholders is limited to the amount unpaid
on its share (Parker, Veljanovski, Clarke, & Posthouwer, 2012). Under s 120, the company
must have one director; section 204A must have one secretary with his/ her consent and the
registered address under CA s 121 if the company is public company (Hanrahan, Ramsay, &
Stapledon, 2011).

Company limited by share can be public company or the proprietary company (Morrison &
Anderson, 2010). It is defined in s 9 of Australian Corporations Legislation. Due to the fact
that shareholders have limited liability and creditors do not have access to the personal
property to satisfy their debts. Under CA s 148 (2), the company must have limited at end of
its name unless s 150 or 151 applies (Lipton, Herzberg, & Welsh, 2012).

The benefit of limited liability is the incentive for the business operator to operate under the
limited liability company where as sole trader and partnership cannot take the advantage this
unless they have substantial property (Woodward, Bird, & Sievers, 2005). However creditors
can ask for the personal guarantee from the director of the company if they have doubt
regarding the repayment on the loan (Lipton, Herzberg, & Welsh, 2012).

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4.3 Company liability:

It is not limited liability to creditors by the company (Vermeesch & Lindgren, 1998). Once
the shares are fully paid shareholders cannot be force to contribute any further amount to the
company (Morrison & Anderson, 2010). Under section 515 present or past shareholders are
liable to pay sufficient amount to cover for the debt on winding up the company to the
amount unpaid on the share (Lipton, Herzberg, & Welsh, 2012). But in case of Mining Co of
I ndia Ltd v Roper (1892) where share were issued at one quarter of the share originally
issued at which is 25 pence. At the time of the litigation shareholders limit their liability by
saying that the transaction to sell the share in discount rate was prohibited and thus void
(Ford, 1990).
If there are any further changes regarding the shares acquisition or transfer to be imposed
than it must be imposed under CA s 140(2) with corporate constitution, strict voting and
enforcement requirements (Harris, Hargovan, & Adams, 2011). As in case of Gambotto v
WCP Ltd (1993) where majority of the shareholders were able to alter the article to acquire
the share from the minority shareholders ( Mitchell, 1994).
4.4 Features of the company limited by share:
4.4.1 Separate legal entity:

Company is the separate legal entity with its own legal personality distinct from shareholders
and the company directors (Murray, 1968). Australian Corporations Legislation section 124
(1) supports this theory that company should be treated as separate entity which as powers of
an individual (Parker, Veljanovski, Clarke, & Posthouwer, 2012).

Noted in the case of Salomon v Salomon and Co Ltd even though being the director and the
secured creditor at same time Salmon could claim the debentures without any consequences
due to distinction between company debts, assets and the contract company had with it him as
a member and employee because company was liable in tort to a member (Harris, Hargovan,
& Adams, 2011).

But in case of Regal (hasting) Ltd v Gulliver (1967) where wrong is done to the company,
the company saw fit to bring action against their previous directors because the directors of
the company were in breach of their fiduciary duty to the company (Vermeesch & Lindgren,
1998).
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4.4.2 Corporate Veil:

The members lie behind the Corporate Veil of the separate legal entity as it is illustrated by
George Hudson Pty Ltd v Bank of New South Wales (1978) where a wrong is done to the
company than the company is proper plaintiff and shareholders and member can act on behalf
of the company hiding behind corporate veil. The bank in this case wanted to strike out the
cross claim by one of the substantial shareholder (Harrod) of a company disclosing no
reasonable cause of action by Harrod against the bank but the decision from the Supreme
Court was that of bank had duty of care to the company hence it had duty of care to Harrod
(Vermeesch & Lindgren, 1998).

Another leading case of Briggs v J ames Hardie & Co Pty Ltd (1989) where it was apparent
that legal approach was followed despite the reality indicated otherwise. Due to court case
from Mr. Briggs, it forced the James Hardie group to change its corporate structure that
involves establishing a special purpose fund. Despite this it became obvious that special
establishment would not have sufficient funds to pay out future claimants (Hanrahan,
Ramsay, & Stapledon, 2011). This case indicated that without corporate veil James Hardie, or
its parent company or the shareholders could have been liable for the claimants from past and
would have been liable for the future claims for much more than they were able to get away
with.
4.4.2.1 Piercing the Corporate Veil:


The corporate veil could be lifted under s 254T, paying (dividends) when there is insufficient
funds and payment are authorized by the directors, s 588G trading while insolvent and un-
commercial transactions where entering into the agreement by fear that company that they are
working for might soon be insolvent (Pentony, Graw, Parker, & Whitford, 2013).

Looking through the companys separate legal entity is piercing the corporate veil (Cassidy,
2008). Only in specific condition that veil can be lifted either applying the general law
principle or statutory provision (Woodward, Bird, & Sievers, 2005). The court system rarely
lift the veil to prosecute the unless there is special instructions to do so such as in case of
Green v Bestobell I ndustries Pty Ltd (1982) where the director of the Bestobell was in
breach of fiduciary duty by a registering separate company and winning the bid while not
disclosing to the company they were working for, subsequently the court order was to
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benefits received by his company to be repaid to Bestobell (Pentony, Graw, Parker, &
Whitford, 2013).
Such was the case in Australian Securities & I nvestments Commission v Maxwell the
judgment from the court was of, directors had breached their fiduciary duty by not making
the right decision for the company, did not act in a good faith and did not use their position in
best interest of the company under s 180, 181 and 182 (Pearce, 2013).
4.5 Capacity to sue and be sued

ASIC allocates nine digits Australian Company Number when company is incorporated. With
this company becomes separate legal entity (Lipton, Herzberg, & Welsh, 2012). As discussed
above the company has the power to sue if a wrong is done to the company and it can be sued
if a wrong is done by the company. Leading case where as a separate legal entity, a wrong is
done to the company is Foss v Harbottle (1843). The directors of the company were sued by
the minority shareholders due to mismanagement of the company land but the judgment was
that of when a wrong is done to the company than the company by itself is a proper plaintiff
(Harris, Hargovan, & Adams, 2011).
Such was in case of Cook v Deeks (1916) where a wrong is done to the company by their
directors by transferring valuable contract into their own company for a profit rather than
fulfilling their fiduciary duty for the company they were working for, were sued by the
minority shareholders.

But when the a wrong is done by the company such was in case of H L Bolton (Engineering)
Co Ltd v TJ Graham & Sons Ltd (1957) where it was judged as the directors were the mind
and will of the company and held liable for the offence it caused (Tomasic, Jackson, &
Woellner, 2002).
4.6 Perpetual Succession & Power to hold property

The company comes to its existence once it is registered with ASIC as a Separate legal entity
(Woodward, Bird, & Sievers, 2005). The Corporation Act s 126 provides the power to make
a contract by an individual on behalf of the company by express or implied with or without
common seal (Lipton, Herzberg, & Welsh, 2012). The company shareholders, directors may
come and go but the company continues its operation as a separate legal entity (Parker,
Veljanovski, Clarke, & Posthouwer, 2012). The case noted in Macaura v Northern
Assurance Co Ltd (1925) shareholders owns the share of the company only, and their change
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does not affect the companys ownership of it asset (Vermeesch & Lindgren, 1998). The
company cease to exit once it is deregistered as per s 601AD (1) by ASIC.
5.0 Analysis of Company Creation:
5.1 How are the companies created?
5.1.1 Registration:

There are number of steps provided by ASIC for starting the company such as deciding the
right structure, decide on company name, company operations, legal obligations as an office
holder, consensus with partners , company registration and the legal obligations regarding the
company name, Australian Company Number, and Australian Business Number (Starting a
company, 2013).

Under s 57A, a company registered under the Corporations Act is also a type of corporation
(Lipton, Herzberg, & Welsh, 2012). After lodging the application under s 117 (1) with ASIC a
company must follow three steps prescribed in Corporations ACT (a) ensuring the chosen
name are available under s 1189, 119, 147 (1), 148 (1), 150,152 (b) document lodgment under
s 112, 117 and prescribed payment fees: Corporations (fees) regulations: regs 3, 5 and
schedule, s 1351, 1354 (Tomasic, Jackson, & Woellner, 2002).

The name of the company reservation is essential prerequisite to register a business and the
first step under s 117(2) (b) and s 148 (1)-(5) requires proposed business name to be specified.
The importance of name registration is illustrated in case of F Goldsmith (Sicklemere) Ltd v
Baxter (1969) where Mr. Baxter tried to void the contract due to companys name being not
available. The court decision was to enforce the contract and make decision against Mr. Baxter
because surrounding factor indicated the contract was in fact valid (Cassidy, 2008).

A company must show limited, unlimited or no liability in its name under s 148 (2)-(5) to
differentiate from other entity.

The primary regulator of company is ASIC in Australia (Gamble, Plesis, & Neal, 2008). The
Corporations Act s 115(1) states the number of members it can have in the partnership and s
115(2) regulation 2A.1.01 states some specific regulations regarding the maximum number of
partnership the professional body can have (Hanrahan, Ramsay, & Stapledon, 2011).
Under s 118(1) ASIC, if the all the requirements are met than ASIC may register a company.
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There are many bodies that are similar to corporation but they are not created nor regulated by
Corporations ACT such as universities, statutory corporations, incorporated associations
(Pentony, Graw, Parker, & Whitford, 2013).
5.1.2Shelf Companies:

The companies that are in existence but not yet been traded are the shelf companies
(Woodward, Bird, & Sievers, 2005). If an existing business wants to incorporate a company in
short time they will buy a shelf company due to lack of knowledge on the procedure on
registering the business or various other reasons. The business who acquires the shelf company
must inform the ASIC about the changes of the company in regards to transfer of shares,
changes of directors, and change of registered address (Lipton, Herzberg, & Welsh, 2012).
5.1.3 Registered office:

A company must have a registered office under s 142(1) to communicate in regards to notices.
Under s 121 of Corporations Act, the address given the on the application will be the address
registered office of the business (Hanrahan, Ramsay, & Stapledon, 2011). If the address of the
business is different and not occupied by the business than ASIC must be provided under s
143(1) written consent from the occupier giving consent to use their address as a business
address (Lipton, Herzberg, & Welsh, 2012).
5.1.4 Running of the company:

After the company registration, a company must appoint a director ordinarily residing in
Australia with their consent as per s 204A (1) (Hanrahan, Ramsay, & Stapledon, 2011).
Director must act with care, skill and diligence while performing its duty (Pentony, Graw,
Parker, & Whitford, 2013). Under s180, s 182 and s 183 the directors duties are reinforced as
well as directors duty to avoid conflicts (Harris, Hargovan, & Adams, 2011). One of the cases
Donoghue v Stevenson (1932) clarifies the fact that directors must act according to the
sections mentioned in the Corporate Act above. The lack of care of duty in this case to ensure
that product in the market was safe for the consumers to consume landed the director of the
company to be sued (Vermeesch & Lindgren, 1998).

ASIC reinforces the directors duty as to act honestly, carefully, be aware of the day to day
running of the company, take extra care in handling money as it might be someone elses
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money, pay outstanding debt on time and keep the record the financial states (Your Company
and Law, 2013).
5.2 Change of Company Name:

The company name can be changed only if name of the company is available and not already
registered as well as it is generally acceptable (Changing a Company Name, 2013). The
Corporations Act s 157(3) clarifies that the company name must be available; ASIC must be
provided with approved change of the name application and copy of special resolution under s
157(1) and (2) (Lipton, Herzberg, & Welsh, 2012). Once the application has been submitted,
the notification of resolution form 205 needs to be submitted. The ASIC will notify with accept
or reject of the proposal (Changing a Company Name, 2013).

The changing of the company names are dealt with in s 157-161 (Tomasic, Jackson, &
Woellner, 2002). Under s 157(2) the company cannot change its name after the process of
winding up starts (Lipton, Herzberg, & Welsh, 2012). The case in HDT Special Vehicle
(AUST) Pty Ltd (1991) , where the company tried to change its name between date of
application to change its name to date of winding up the order. The decision on this was of;
purported special resolution to change its company name was insignificant due to winding up
of the company deemed to have already begun.
5.2.1 How to lodge change of name:

There are number of ways to lodge a business: (a) apply online or (b) fill in the form. There
are number of form can be filled depending the requirement of the business such as cease of
the officeholders and cancel shares 484 (Changing a Company Name, 2013).

5.3 Replaceable Rules and Constitutions:

The Corporations Act s 141 outlines basic rules that are set which can be followed by a
company or they can have their own set of replaceable rule and the constitution (Ford, 1990).
Provisions of the Corporations Act will be applicable to a company without those sets of rules
and constitution (Gamble, Plesis, & Neal, 2008) if they wish to. These set of rules may not be
suitable for a company where there are two shareholders who has the particular rights such as
representing on the board of directors (Hanrahan, Ramsay, & Stapledon, 2011).

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5.4 Consent of members and officers:

Under s 120(1) the consent form must be submitted with the application of the directors or the
secretaries (if they are a public company) from the time of the registration (Lipton, Herzberg,
& Welsh, 2012).

5.5 Fees:
The application fees and lodgement form are to submit for the registration. For new company
the fee as per ASIC is: for one year $33.00 and $ 76.00 for three years (Business name
payments and fees, 2013).
5.6 Certificate of registration:

Under s 118(1) once all the requirements are met ASIC may register the company and allot
CAN number with the certificate but ASIC may refuse the application due to breach of act
such as disqualified person being nominated as a company director (Lipton, Herzberg, &
Welsh, 2012).
5.7 Corporate Key:

ASIC will issue with the corporate key once the company is registered. This key will be used
to lodging forms and it must be quoted when doing so.
5.8 Additional information regarding company name(ASIC):

There are other legislations under Corporation Act that the company must be aware of if they
want to operate. They are as follows:
5.3 Omission of Limited from name:

Omission of limited as part of their name is only allowed in some cases such as company
limited by guarantee under s 150(1) under circumstances e.g. charitable companies where
income is promoting the those commitments, distribution of payment to its directors and
members and requires all the payments to be authorize to pay for the other directors (Lipton,
Herzberg, & Welsh, 2012). If in breach of the application, ASIC may revoke the license of the
company (Parker, Veljanovski, Clarke, & Posthouwer, 2012).


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5.4 Display of company name:

As per s 144(1) company must display its name for identification and if it is a public company,
s 144(2) states that word Registered office at its registered office and if the notice was not
able to be viewed by some but not the others than it is no defense to company (Tomasic,
Jackson, & Woellner, 2002).


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6.0 Conclusion

The three types of business entities have different features and their formalities and liability
are different within the structure of business. With respect to their structure there are key
factors in all three types of business entities in regards to their formalities, and liabilities.

Sole Traders enjoys all the benefits gained from its business but has its down fall in regards
to liability where all the liability falls under the Sole Trader. There is no protection as
corporate veil and no sharing of the liability such as in Partnership. In partnership although
liabilities are shared between the partners, there is no certainty that only one of the partner
will be held liable for the claim. Although they will have support and sharing of the duties
there are number of factors that needs to be addressed. Partnership is based on the mutual
trust between the partners and their fiduciary duty is a must.

The company limited by share has its advantages such as raising the funds through the share.
Their liabilities are limited and they are mostly protected by corporate veil until there is a
serious breach of fiduciary duty by the directors when the corporate veil can be lifted. The
company operates as separate legal entity and members can be assured of their personal
information being not exposed. The legislation under the Corporations Act will provide the
courts to act on behalf of the plaintiff to lift the corporate veil in case of any wrong doing to a
company or by the company.

There are number of procedure to follow for the separate legal entity to come into its life.
One of the main important aspects of the company limited by share is to register the company
as per the legislation stated in the Corporate Act. Legislations are there to guide the new
business owners to provide and guide them through the initial stage so they can be better
informed for the pitfall they might get into.

With all the information provided and analysis done, it is the business owners who need to
make a decision on what types of business to acquire.



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Reference:


Business name payments and fees. (2013, 9 18). Retrieved from ASIC:
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Cassidy, J. (2008). Corporations Law Text and Essential Cases. Annandale: The Federation Press.

Changing a Company Name. (2013). Retrieved from ASIC:
http://www.asic.gov.au/asic/asic.nsf/byheadline/Changing+a+company+name?openDocument

Fletcher, K. L. (2007). The Law of partnership in Australia. Pyromont: Law Book Co.

Ford, H. (1990). Principles of Company Law. North Ryde: Butterworths Pty Limited.

Gamble, R., Plesis, J. D., & Neal, L. (2008). Principles of Business Law. Pyrmont: Thomson Lawbook Co.

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Hanrahan, P., Ramsay, I., & Stapledon, G. (2011). Commercial Applications of Company Law. Sydney: CCH
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Harris, J., Hargovan, A., & Adams, M. (2011). Australian corporate Law. China: LexisNexis Butterworths.

Lipton, P., Herzberg, A., & Welsh, M. (2012). Understanding Company Law. Pyrmont: Thomson Reuters
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19

Table of Cases:


No Case Citation Relevant
1 Turnbull v Ah Mouy (1871) 2 AJR 40 Formalities of partnership
2
Canny Gabriel Castle J ackson Advertising Pty Ltd
v Volume Sales (Finance) Pty Ltd(1974) 131 CLR
321
Formalities of partnership
3 Davis v Davis (1894) 1CH 393 Formalities of partnership
4 Polkinghorne v Holland & Whittington (1934) 51
CLR 143
Partnership Liabilities
5 United Dominions Corp v Brian Pty Ltd (1985) 157
CLR 1; 60ALR 741;(1985) HCA 49
Partnership Liabilities
6 Rolfe and bank of Australasia v flower salting &
Co( 1865) LR 1 PC 27
Partners Liability-
Incoming and Outgoing
partners
7 Hamerhaven Pty Ltd v Ogge (1996) 2VR 488 Partners Liability- Incoming
and Outgoing partners
8 Salomon V Salomon and Co Ltd (1897) AC22
House of Lords
Separate Legal Entity
9 Regal (hasting) Ltd v Gulliver (1967) 2 AC 134n;
1 All ER 378
Separate Legal Entity
10 George Hudson Pty Ltd v Bank of New South
Wales (1978) 3 ACLR 366
Corporate Veil
11 Briggs v James Hardie & Co Pty Ltd (1989) 7
ACLC 841;16 NSWLR 549
Corporate Veil
12
Australian Securities & I nvestments Commission v Maxwell
(2006) 59 ACSR 373; [2006] NSWSC 1052
Corporate Veil
13 Mining Co of India Ltd v Roper(1892)AC 125 at 144 Company limited Liability
14 Gambotto v WCP Ltd (1993) 11 ACLC 457 Company limited Liability
15 Green v Bestobell Industries Pty Ltd (1982)WAR 1 Piercing the Corporate Veil
16 Foss v Harbottle (1843) 2Hare 461; 67 ER 189 Capacity to sue and be
sued

17 Cook v Deeks (1916) 1AC 554 Capacity to sue and be sued

18 H L Bolton (Engineering) Co Ltd v TJ Graham &
Sons Ltd (1957)1 QB 159
Capacity to sue and be sued
19 Macaura v Northern Assurance Co Ltd (1925)AC
619
Perpetual Succession

20 F Goldsmith (sicklemere) Ltd v Baxter (1969) 3 all
ER 733; (1970) Ch 85
Analysis :How are the
companies created
21 Donoghue v Stevenson (1932) AC 562 Analysis: Running of the
company
22 HDT Special Vehicle (AUST) Pty Ltd (1991) 9 ACLC
1336
Analysis: Change of
Company name