A company is a separate legal entity, being an artificial person that only ceases to exist via the hands of its members or via government intervention. A company’s personality is expressed in its constitution and enables the members of the company to combine their resources under the one entity for a common purpose while remaining unexposed to the bankruptcy, death or loss of capacity or one or more of its members.
Legal advice can be obtained regarding the shareholders of a company, the constitution, governance, shareholder agreements, regulatory compliance, internal conflicts and disputes, third party actions and insolvency.
Section 124 of the Corporations Act 2001 (Cth) provides that a company is a separate legal entity, with its rights and obligations entirely separate from its shareholders, directors, managers, employees and agents. The company exists as long as it remains registered.
A company can buy or sell property, enter contracts, sue or be sued.
The two main types of companies that can be registered are proprietary private companies and public companies.
Proprietary private companies are generally smaller than public companies. They are not able to raise capital by issuing securities to the public.
Companies can be unlimited with a share capital, limited by shares or limited by guarantee.
Companies that are limited by shares restrict shareholders’ liability for the company’s debts to any unpaid portion of their issue price.
Companies that are unlimited with share capital are unusual. They do not afford shareholders the same level of protection. Instead, the liability of shareholders is unlimited.
A company limited by guarantee is a specialised public company structure used by non-profit organisations. The company members can specify the limit of their liability by guaranteeing the amount of capital they are liable to contribute to the company on winding up.
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