Corporate Law

Corporate Law

Introduction

This paper has comprehensive and significant findings and discussion over the section 131 of Corporation Act 2001, which focuses on the Pre registration contracts. The pre registration Contracts provides that the organization is not exists or liable for any legal purpose until it is not registered or incorporated. This covers under the common law that restricts a company to bind in any legal contract if it is registered. However, if there is any delay in the registration processes, the company's promoter wishes to enter in a bind a contract 'for' the company before its registration. For instance, a promoter wants to ensure the company's stock in hand, so it will be ready for the operations soon after its registration. He may sign the contract and order stocks in the name of unregistered company. As, the company is not registered it is not allowed to sign or enter into any contract or it is also not able to appoint any agent that may sign on behalf of the company. This problem is complex and it may require different justifications for the question that may rise about enforcement of the contract.

In the light of common law, the company was not allowed to rectify a pre-registration contract even after its incorporation (registration). This existed because the law of agency approval has a retrograde effects and the contract regarded as made the time it was made by the agent when the company was not existed. A company will only be liable for the pre registration contract when it bind into a new contract with the similar conditions as the pre registration contract's registration afterward. This is known as novation.

Discussion

Before discussion section 131 of Corporation Act 2001 it is significant to highlight the crucial concept and understanding of Corporation Act 2001. The Corporation Act, which enforced on July 15, 2001, replaced the Corporation Law and unified the corporate legislation across Australia. The ASIC, which is empowered by the Australian Securities and Investments Commission Act, governs the incorporation of companies and the preservation of public records of the company. Among the various functions it regulates securities trading and conduct of issuers and securities brokers.

The acquisition of shares in listed companies and certain unlisted companies requires that the formal offer documents are filed with the ASIC, whereas acquisition proves in relation to a person who exceed the legal limit of 20% of the target company. Foreign companies already listed can apply to be admitted to listing on the Australian Stock Exchange http://www.asx.com.au , only if this recognizes the quotes on the price lists of other scholarships based on a foreign exchange approved. The classification of foreign companies in a condition of exemption allows the use of a fast and inexpensive way to gain access to trading in Australia. This company must assume the burden of keeping the market informed, and allow an adequate record of the shares and transfer of securities in Australia, but does not need to comply with most ...