Business Law for Text & Summarized Cases- myassignmenthelp.com

Question: Discuss about theBusiness Law for Text Summarized Cases. Answer: There are three kinds of business structures which are available to a person for the purpose of carrying out of business activity. These structures can be divided into proprietorship, partnership and company. Each of the business structures have their own pros and cons and therefore before choosing any of the structure the business activity has to be analysed in the light of its features. Proprietorship is a form of business structure where the business and the owner do not have any separate identity (Bourke Wells, 2015). The structure provide immense control over the way in which business is conducted however it has unlimited liability for the owner. In case of partnership where control is distributed among two or more partners the feature of unlimited liability is still present. A proprietorship business should be adopted in situation where the business is relatively small. In the same way a medium category business can be carried out in form of a partnership as it requires additi onal support which is provided to the partners. However when it comes to a business which is relatively large in size the best possible business structure which needs to be selected is that offer company. There are a few key features of a company which distinguishes it from other types of business structures. The Identity of the owner (shareholder) of a company is different from that of the company itself. The company has the capacity to sue and be sued by itself. One of the most prominent features of a company is that of limited liability (Clarke et al., 2015). According to this feature a person who has invested in a company is only liable to extent to which investment has been made by him in the company. In addition a company can be differentiated into a public company or a private company where the public company is allowed to raise capital from the public. It is provided in the scenario that Dan and Ellie are looking to operate a business which is relatively big in size. Therefo re if they select the structure of a public company they would not only be allowed to raise the capital needed for the adventure but also would be able to limit their liability in case of any unwanted situation faced by the company. There is a specific process by which a public limited company is registered in Australia. Firstly form 201 provided by the Australian Securities and Investment Commission needs to be completed and submitted properly for the formation of the public limited company. They have to comply with the provisions of section 112 and 117 of the Corporation Act 2001 (Cth). According to section 112 a public company limited by shares can be registered. As per section 117 an application has to be made by the ASIC for the registration of the company with all details required such as type of company, proposed name, name and address of members and share capital. As per section 118 of the CA the ASIC issues certificate of registration and ACN and the company comes into existence upon registration as per section 119. NO in the situation where the company has been registered and a customer of the company has incurred losses because of the chair, Dan and Ellie would not be personally liable due to the limited liability feature of the company. This is because company can sue and be sued in its own name and the members of the company limited by shares are only liable to the extent they have contributed in the company unless the directors have made a breach of directors duties or have indulged in insolvent trading under section 180-184 and section 588G of the CA respectively. The provisions of fundraising are dealt with under chapter 6D of the Corporation Act. A public company is allowed to raise funds in Australia from the general public to the issuing of securities on the other hand the private companies only allowed raise funds from its existing shareholders and employees. However in order to gain large funds the structure of a public company limited by shares is recommended. While raising funds a company needs to provide disclosure documents to the potential investors. Disclosure document includes every document which is required for issuing securities and regulate fundraising. There are four kinds of disclosure documents which needs to be issued by a public company namely a prospectus, offer information statement, profiles statement, a two part simple corporate Bond prospectus (Miller, 2015). The widest disclosure requirements in relation to a prospectus which is also one of the most popular and common type of disclosure document used by a company. A ll information in relation to the fundraising has to be contained in the prospectus. The prospectus act like an offer and should not contain any misleading or deceptive information or the company and its directors may be liable under section 1041H of the CA. When the fundraising requirements of a company are less than 10 million dollars in aggregate then the company may provide often information statement which generally has less disclosure requirements as compared to the prospectus (Coffee, Sale Henderson, 2015). A public company wishing to use this document for fundraising has to provide along with it a copy of audited financial report as well as a balance date in last 6 months. A profile statement can also be issued by the company if it has been approved by the ASIC. This document contains important information in relation to the offer and the company. A two Parts simple corporate Bond prospectus contains a base prospectus with a 3 years life and offers specific prospectus made in relation to each offer. A disclosure documents have to be lodged with the ASIC before it can be released by the company for the purpose of fundraising. When the preparation of an offer document has been completed the company must use offer list entry for the purpose of recording summary information in relation to the offer which is to be displayed on the offer list. The disclosure document then is to be lodged along with the required fee (Mann Roberts, 2015). If the document is lodged by courier then it has to be address to the ASIC regional office. On the other hand if the company wishes to hand deliver the document then they can do it in ASIC service centre unless the company is based in NSW which requires documents to be lost in NSW regional office. Fees in relation to lodging the documents is determined by the corporation (review fee) regulation 2003. Securities under section 727 cannot be offered without disclosure. In addition where disclosure is required the advertisement restrictions of section 734 of the CA are also applicable. The security Hawking prohibitions which have been provided in section 736 must not be breached in relation to the way in which offer is made to the public. Disclosure is required by any offer in relation to securities other than that of CSF offer as per section 706 unless it is stated otherwise by section 708 and 708 AA. According to Section 708 if the offer does not breach the ceiling of 20 investors and 200 million it does not require a disclosure. Therefore in order to raise both small and large investments from the public Dan and Ellie have to take into consideration these fundraising requirements provided under the Corporation Act. References Bourke, J. F., Lucadou-Wells, R. (2015). Teaching Business Law: Some Ethical Dimensions from Australia. Clarke, E., Griggs, L. D., Cho, G., Hoyle, A., McLaren, J. (2015). Commercial and Economic Law Australia. Coffee Jr, J. C., Sale, H., Henderson, M. T. (2015). Securities regulation: Cases and materials. Corporation Act 2001 (Cth) Mann, R. A., Roberts, B. S. (2015).Business law and the regulation of business. Nelson Education. Miller, R. L. (2015).Business Law Today, Standard: Text Summarized Cases. Nelson Educationa