Question 1: Part a It is legal to enforce Dozey’s charge against Sleepy Head Pty Ltd. Facts: Dozey, a sole trader owns a business called ‘Sleepy Head’. He incorporated a company called ‘Sleepy Head Pty Ltd’ later, and this company purchased the business ‘Sleepy Head’ from Dozey with a substantial block of shares and debentures secured by a charge over all of the company’s assets from Dozey. ‘Sleepy Head Pty Ltd’ was not successful and went insolvent and it is taken care of by the liquidator. Legal issue: Dozey is a secured creditor of the company ‘Sleepy Head Pty Ltd’ and would like to enforce his charge against the company, but the liquidator, who is taking care of the insolvent company, rejected his claim. Relevant Case Law: Salomon v Salomon & Co Ltd [1897] . Discussion: According to the case of Salomon v Salomon & Co Ltd [1897], upon the incorporation of a company, it becomes a separate legal entity from its founders, directors, members and controllers. Debts entered into using the company’s name belong to the company and not to the founder or controller or the director or anyone else who authorised the debt . Thus, even though Dozey is the founder of ‘Sleepy Head Pty Ltd’, they are legally two different entities and their debts are separate. Therefore, Dozey should be treated as the company’s secured creditor for the company’s debenture and he is entitled to enforce his charge against Sleepy Head Pty Ltd for his claim. Part b It is not legal to enforce Risk Ltd for the insurance under the assumption that Dozey did not transfer ownership of the stock to ‘Sleepy Head Pty Ltd’. Facts: Dozey sold his business ‘Sleepy Head’ to ‘Sleepy Head Pty Ltd’ with an insurance with Risk Ltd against fire, theft and the like in the sum of $1... ... middle of paper ... ...s are as follows : 1. Decide whether the company requires a constitution and if so, draft it, 2. Obtain written consent from ease proposed director and new security for the new company, 3. Reserve a name for the company, 4. Locate registered office, 5. Locate a principal place of business, 6. Determine the company’s share structure and members, 7. Complete a Form 201, ensure it is signed and lodged with ASIC 8. Pay registration fee, 9. Receive from ASIC the certificate of registration – company has full legal capacity and powers of an individual: s 124. The company remains in existence until it is deregistered: s119 Bibliography Corporations Act 2001, viewed 19 December 2013, Harris, J, Hargovan, A, & Adams, M, 2013, Australian Corporate Law, 4th ed, LexisNexis Butterworths, Australia
... incident related to misuse of inventory to the manager. He can also be charged of planning to join the scheme later due to which he didn’t reported about the fraud.
This is a complex case, involving multiple parties and several variables that need to be examined thoroughly. The parties mentioned include Knarles operator of the facility maintenance company, his son Barkley, their employee, a licensed plumber, and Mr. Chetum. Although in the end Chetum is suing the facilities maintenance firm for a breach of contract, all factors must be examined to determine proper fault.
Sweeney, B, O'Reilly, J & Coleman, A 2013, Law in Commerce, 5th edition, Lexis Nexis, Australia.
This is similar to the case of Kelner v Baxter (1866), where a team of directors had entered into a contract for a new hotel business, where the hotel business had not been registered, in order to purchase wine. Later when the company got registered, the contract got ratified. Unfortunately, the wine had been consumed before paying the bills, and later the company went into liquidation. The members had been sued. This is because the directors acted without any principal, as the company was not registered at that time of the
The first thing to look at in this paper are the facts about the court’s decision, which deal with John Doe, a “financial advisor” and Pedro Urdemales, a cohort of John Doe, and the investor Secundino Piedra. The original investment was done in the 1990’s and involved Piedra investing $75,000 with John Doe and Urdemales, which resulted in no return. However, in early 2000 John Doe called Piedra and convinced him to send a check for $10,000, which was to be made out to Urdemales. This money was to be used for travel expenses, in order to work towards getting a return for Piedra on the original investment (SNHU BB, 2009, p. 370). Piedra sent an additional check for $5,700 and it was unclear who that was made out to, or what the use would be. Both checks were cashed at a Stuart Any Kind store by a woman named Michael and Joanne Kochakian (SNHU BB, 2009, p. 371).
The Body Shop International case is an interesting case study into the miscommunication of owners and stockholder interests with regard to financial conditions. Anita Roddick, the founder of The Body Shop had no financial experience and thought that all she needed to do was expand her business and the financing would take shape as she developed her business. While Anita’s product concept of a natural skin-care line was good; her lack of experience in financial matters took its toll on her business.
According to Corporation Act 2001 s124(1), it illustrates that ‘’A company has the legal capacity and powers of an individual both in and outside the jurisdiction” . As it were, company as a legal individual must be freely with all its capital contribution shall embrace liability for its legal actions and obligations of the company’s shareholders is limited to its investment to the company. This ‘separate legal entity’ principle was established in the case of Salomon v Salomon & Co Ltd [1987] as company was held to have conducted the business as a legal person and separate from its members. It demonstrated that the debt of company is belonged to the company but not to the shareholders. Shareholders have only right to participate in managing but not in sharing the company property. Besides ,the Macaura v Northern Assurance Co Ltd [1925] demonstrates that the distinction between the shareholders and company assets. It means that even Mr Macaura owned almost all the shares in the company, he had no insurable interest in the company’s asset. The other recent case is the Lee v Lee’s Air Farming Ltd [1961] which illustrates that the distinct legal entities between employee ad director allows Mr.Lee function in dual capacities. It resulted that the corporation can contract with the controlling member of the corporation.
...me a director of the third company within five years after the liquidation of the two companies. The third company was funded by a creditor, Mr. Silverleaf. When the third company was wound up, Mr. Silverleaf then had knowledge of the previous two companies’ failures and claimed a debt of close to ₤135,000 . Mr. Silverleaf was successful in bringing proceedings under sections 216 and 217 of Insolvency Act 1986 even there’s no evidence of any asset transfer between the companies.
Morgenson, G. (2005, September 17). Clues to a Hedge Fund's Collapse. In The New York Times. Retrieved November 1, 2013
Lisa’s insurance broker did not make sure she had the proper coverage to reduce her liability if something were to happen to the art gallery. Lisa’s insurance broker, Homer, broke his fiduciary duty to Lisa by not ensuring she had the proper coverage she needed; given that Lisa was responsible for the safekeeping of the artwork that was on consignment. Homer should have taken into consideration that nearly all her inventory, which was on consignment, would not be insured if a fire occurred. Nonetheless, Homer reassured Lisa that she was “well covered” with her policy when she should have had a policy where she would be covered for losses to artwork on consignment as well as fires that didn’t originate on her building
With the help of Madoff’s father, a retired accountant, the company attracted investors and scored an amazing client list. "Madoff Investment Securities” grew famous for its reliable annual returns of ten p...
In 1911, however, as a result of the outstanding debts that the company had acquired, bankers stepped in and rem...
This project will look at two specific corporate collapses in the U.S. resulting from the Bernie Madoff Ponzie Scheme of 2008 and the Le-Nature Soda Company Pyramid-Ponzie Scandal of 2006. The diverse nature of these organizations (one dealing in financial investments and the other in product manufacturing), yet both their abilities to successfully operate Ponzi schemes , is the primary reason for their selection in this project. This report highlights the accounting and non-accounting frauds conducted within these organizations and analyses the reasons for their collapse.
The Principle of Separate Corporate Personality The principle of separate corporate personality has been firmly established in the common law since the decision in the case of Salomon v Salomon & Co Ltd[1], whereby a corporation has a separate legal personality, rights and obligations totally distinct from those of its shareholders. Legislation and courts nevertheless sometimes "pierce the corporate veil" so as to hold the shareholders personally liable for the liabilities of the corporation. Courts may also "lift the corporate veil", in the conflict of laws in order to determine who actually controls the corporation, and thus to ascertain the corporation's true contacts, and closest and most real connection. Throughout the course of this assignment I will begin by explaining the concept of legal personality and describe the veil of incorporation. I will give examples of when the veil of incorporation can be lifted by the courts and statuary provisions such as s.24 CA 1985 and incorporate the varying views of judges as to when the veil can be lifted.
Secondly, a constitutional term is ‘the memorandum and articles of association of a company formed before 1 July 1998 are taken together to make it the company’s constitution after that date under S1415 of the former Corporations Law, unless they have been repealed or amended since in accordance with S136. The internal governance rule of a company, it can be either replaceable rule of Corporation Act, or the company can develops its own, in addition, it can be the mix of two. However, constitutional term is something that can be added later in the company life with a passed resolution. As S135(2) stated, the adoption of constitutional term is eligible. Also, S136(1) said that after registration adoption must be made through a special resolution.