10. Company Law

Question 1

What is the main Act which relates to companies?

Answer 1

The Corporations Act 2001

Question 2

What is the Act which gives ASIC its responsibility for administration and enforcement?

Answer 2

The Australian Securities and Investments Commission Act 2001

Question 3

What is ultra vires?

Answer 3

Acting beyond proper powers

Question 4

Is there a limit to share capital?

Answer 4

No. unless limited by its constitution. A company can determine its own terms and conditions on a share issue and rights and regulations attached to those shares

Question 5

What are the three types of debentures?

Answer 5

Mortgage debentures
Debentures
Unsecured debentures

Question 6

What is a prospectus?

Answer 6

A full prospectus
Short prospectus
or Profile statement
These are documents which must be completed in order to raise capital

Question 7

Under the Corporations Act does the company have to hold meetings?

Answer 7

Yes, an annual general meeting if it is a public company. Otherwise companies can hold extraordinary general meetings and directors meetings

Question 8

What is winding up?

Answer 8

When a company comes to an end, either by the courts or voluntary