Corporation Securities and Investment Commission

Question: Discuss about the Corporation Securities and Investment Commission. Answer: Introduction: The abbreviation of Proprietary Limited is Pty Ltd. According to ASIC, there are various steps to form a company. Before starting accompany, the structure has to be decided by the owner of the company. It is necessary to choose a name of a company. The address of the company is needed to be mentioned. The legal obligations of the company have to be discussed by the officeholders. The consent has to be planned about the company (www.legislation.vic.gov.au, 2016). There should be an Australian Company Number (ACN) and Australian Business Number (ABN) which will show the entity of the company after registration. It is necessary in an Australian Proprietary Limited Company that there must be one director whose residence will be in Australia. There should be shareholders not more than 50. This type of company is governed by ASIC (Australian Securities and Investment Commission). The registration is done by lodging a form paper. As per Section 117 of Corporation act 2001, the company is needed to be registered to prove its validity. There are some exemptions which fall under section 150 of Corporation act. Special resolution is needed to be mentioned in 14 days under section 233 of Corporation act if constitution is not adopted. There are some replaceable rules of the act (Austlii.edu.au, 2016). As per section 134 and section 135 of Company act the combination of replaceable rules governs the constitution. As per section 134 of Company act of Australia, the replaceable rules tends to govern the company following the regulations of the company (www.legislation.vic.gov.au, 2016). As per section 135 of Company act, after 1st July 1988 the constitution is repealed after the date and after that the company can modify the constitution (www.legislation.vic.gov.au, 2016). There are different classes of shares and restriction of the share in a Proprietorship company. As per Section 24 of Corporation Act there are certain rights of the share holders. According to section 254A (2) of Corporation act, for attaching shares various rights are required which incorporates: capital repayment; non cumulative and cumulative dividends: voting; assets profit participation with surplus and capital payment with dividend of share. As per section 254A (3) of Corporation act, the liability should be redeemed with preference able shareholders with the approval of all shareholders (Symon, 2006). By all these sections and acts the proprietor limited companys registration process, redeem of shares and replaceable rules are discovered. There are some sections of Corporation law which has some reason to be incorporated and the rules of these sections are needed to be followed after setting or registering a proprietary company. These sections are: As per Sect 198 a of Corporation act 2001 the management of the company is the responsibility of a director. A director has authority to manage the works of a Limited company. Under section 198 E there is a special rules which is applied on single shareholders or a director of proprietary companies (Austlii.edu.au, 2016). All the powers of the company are exercised by the directors of the company. The liability of director and his roles both falls under this section. The reason of incorporating this act is to establish directors duty. There must be a director who should govern the authority of the company and govern the rules of the company. Section 198 A of Corporation Act is made for describing a directors duty and regulations through which the rule should be implied in a company (Austlii.edu.au, 2016). It is important that after an actual authority of a company there should be an apparent authority who should take the decision on behalf of the owner of the company. A managing director has that authority to take decision on behalf of the owner of the company. This is the prior reason of applying this section which falls under Corporation act. As per section 191 of corporation act it is the directors duty to disclose material of personal interest. A director should always protect the liquidated and unliquidated assets of the company under section 191 regulations. If the director is unsuccessful to protect the property of the company then under section 6.1 of Criminal Code strict liability will come on the director of the company. The director is also the guarantor of loan of the company. It is his responsibility to pay the loan on time and check it. All these sections fall under Director Duties and responsibilities (Austlii.edu.au, 2016). The nature and notice of the extent of an interest of a company with its various procedures is undertaken with section 191 of corporation act. In Corporation act, it is the priority of a director to save the assets and the owner can trust the director by giving this responsibility and this is the reason that this section is incorporated in corporation act 2001 which deals the functions of the proprietary ltd company (Austlii.edu.au, 2016). This section is important to be included because a proper responsibility of a director is needed to be showcased by this act. As per section 250R of corporation act 2001, a business meeting of AGM takes place between the board of directors where consideration of annual financial report with auditors and director report is followed (Austlii.edu.au, 2016). The annual financial report; auditors remuneration; appointment of auditors and election of director is incorporated in section 250R. All the resolution procedure is included in this act. As per section 250R (2) of Corporation act, there are resolution of remuneration report which is adopted in Annual General Meeting (AGM) of all listed companies. As per section 250R (3) of Corporation act the directors of company is bound with the vote on resolution of the company (Austlii.edu.au, 2016). Section 250R (2) of Corporation act is incorporated in corporation law to show the decisions rules and procedures are taken to grow the companys function and adopted resolution and remuneration process in a company. The election process of the company with it regulation is followed through section 250R (3) of Corporation act of Australia (Austlii.edu.au, 2016). References: Austlii.edu.au. (2016).Corporations Act 2001 - SECT 191Material personal interest--director's duty to disclose. [online] Available at: https://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s191.html [Accessed 14 Sep. 2016]. Austlii.edu.au. (2016).Corporations Act 2001 - SECT 198APowers of directors (replaceable rule--see section 135). [online] Available at: https://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s198a.html [Accessed 14 Sep. 2016]. Austlii.edu.au. (2016).Corporations Act 2001 - SECT 250RBusiness of AGM. [online] Available at: https://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s250r.html [Accessed 14 Sep. 2016]. Austlii.edu.au. (2016).Corporations Act 2001 - SECT 117Proprietary companies. [online] Available at: https://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s113.html [Accessed 14 Sep. 2016]. Symon, H. (2006). Corporations Act 2001. Melbourne: Leo Cussen Institute. www.legislation.vic.gov.au. (2016). Companies Act 1961. [online] Available at: https://www.legislation.vic.gov.au/domino/Web_notes/LDMS/LTObject_Store/LTObjSt1.nsf/d1a8d8a9bed958efca25761600042ef5/5566133277940eb0ca257761001c5693/$FILE/61-6839a061.pdf [Accessed 14 Sep. 2016].