Types of Companies: Course Notes
Agency
Partnerships and companies contract through agents.
Partners can be agents of the partnership; directors agents of the company.
Most cases agents have actual authority
If no authority then ostensible authority may apply.
Associations
Not for profit for members.
Types:
Unincorporated > 2 members
Liability to outsiders uncertain
Incorporated >5 members
Registered
Members liability limited
Associated can be sued
Sole Trader
One person owns business
Take profit and bear losses
Unlimited personal liability applies
Minimal formalities
Partnership
Relevant statute is in the Partnership Act
Each state of Australia has a Partnership Act
The Partnership Act determines the obligations of the partners to each other and to outsiders
A partnerships where two or more carry on business in common with a view to profit (s.1)
Partners are agents of the partnership (s.5)
Important factor – whether the partner is carrying out the usual Partnership Business
Partners liability to outsiders can be:
Joint (s.9) – contract
Join and several (s.12) tort and fraud
Case: Polkinghorne v Holland
Partners arrangements between themselves do not prejudice outsiders’rights under the partnership act.
Partners have unlimited personal liability
Partners may be liable to outsiders even after leaving the partnership (s.17, s.36)
Partners are fiduciaries (s.29, s.30)
Case: UDC v Brian
Companies legislation originated from England
In Australia:
States passed companies Acts similar to English legislation
In 2nd half of the 20th century, Australia moves towards federal control for company law
Achieving uniform company law failed (due to high court) until the Corporations Act 2001 (Cth).
Section 51 (20) of the Constitution restricted national scheme
Cases: Re Wakim ex parte McNally
R V Hughes
Constant reformation to meet changes.
Eg. CLERP Act 1999, CLERP Act 2004
Government bodies such as CAMAC consider reform proposals and recommend
Partnerships and companies contract through agents.
Partners can be agents of the partnership; directors agents of the company.
Most cases agents have actual authority
If no authority then ostensible authority may apply.
Associations
Not for profit for members.
Types:
Unincorporated > 2 members
Liability to outsiders uncertain
Incorporated >5 members
Registered
Members liability limited
Associated can be sued
Sole Trader
One person owns business
Take profit and bear losses
Unlimited personal liability applies
Minimal formalities
Partnership
Relevant statute is in the Partnership Act
Each state of Australia has a Partnership Act
The Partnership Act determines the obligations of the partners to each other and to outsiders
A partnerships where two or more carry on business in common with a view to profit (s.1)
Partners are agents of the partnership (s.5)
Important factor – whether the partner is carrying out the usual Partnership Business
Partners liability to outsiders can be:
Joint (s.9) – contract
Join and several (s.12) tort and fraud
Case: Polkinghorne v Holland
Partners arrangements between themselves do not prejudice outsiders’rights under the partnership act.
Partners have unlimited personal liability
Partners may be liable to outsiders even after leaving the partnership (s.17, s.36)
Partners are fiduciaries (s.29, s.30)
Case: UDC v Brian
Companies legislation originated from England
In Australia:
States passed companies Acts similar to English legislation
In 2nd half of the 20th century, Australia moves towards federal control for company law
Achieving uniform company law failed (due to high court) until the Corporations Act 2001 (Cth).
Section 51 (20) of the Constitution restricted national scheme
Cases: Re Wakim ex parte McNally
R V Hughes
Constant reformation to meet changes.
Eg. CLERP Act 1999, CLERP Act 2004
Government bodies such as CAMAC consider reform proposals and recommend