The Corporations Power

Question 1

What does Corporation’s Power mean?

Answer 1

• Refers to legislative authority granted to the Commonwealth Parliament (s.51)

–> Allows federal parliament to make laws w respect to ‘foreign corporations, and trading or financial corporations, formed within the limits of the Commonwealth

Question 2

What is Foreign Corporations?

Answer 2

• Entity formed under the law of a foreign country and is recognised as having corporate legal personality either by foreign law or AUS law

Question 3

What are Trading Corporations?

Answer 3

• Defined based on activities and functions of corporation
• Engages in SUBSTANTIAL trading activities which generate revenue
• Must have a sufficiently significant proportion of its overall activities devoted to trading

Question 4

What are Financial Corporations?

Answer 4

• Involves money and the generation/loss of money
• More about borrowing, investing or lending money (not trading goods or services)

Question 5

Difference b/w Trading and Financial Corp?

Answer 5

Trading = goods n services
Financial = monetary value

Both are quite similar, however, as long as it significantly engages in financial activities, it doesn’t matter what they’re named

Question 6

What are Inactive Corporations?

Answer 6

• ‘Shelf Company’ = incorporated but does NOT engage in any business activities

–> Significant case is Fenett

Question 7

What does a Broad and Narrow view of legislation mean?

Answer 7

• Broad view grants Commonwealth considerable authority to legislate and regulate corporate activities e.g. trade practices, industrial practices and environmental protection

Narrow view = limited Commonwealth power –> preserving state power over intrastate corporate activities

Broader view = allowed Commonwealth to regulate internal trade practices

Question 8

Significance of Tasmanian Dam’s case?

Answer 8

• Further broadened the Commonwealth’s power to legislate to tackle first-world issues such as Environemental Protection

Question 9

What type of test to use for ‘Broad view?’

Answer 9

• Object of Command Test

Question 10

What type of test to use for ‘Narrow View?’

Answer 10

• Distinctive Character Test

Question 11

What is the Object of Command Test?

Answer 11

• CP can regulate ALL activities of constitutional corporatio

Question 12

What is the Distinctive Character Test?

Answer 12

• Commonwealth ONLY regulate trading activities of trading corporations and financial activities of FINANCIAL corporations

Question 13

What was signficance of the NSW v Commonwealth (2006) Work Choice case?

Answer 13

• Expansion of corp. power = allowed Commonwealth to regulate a mucher broader range of industrial relations matters than previously possible
• Limiting State Power = HC effectively limited states’ ability to regulate industrial relations
• Shift in Federal Balance = decision shifted power b/w commonwealth and states –> Commonwealth gaining MORE authority over areas traditionally managed by state e.g. industrial relations

Question 14

How is corporations power expanded?

Answer 14

• Using incidental power = constitutional power inc. the ability to make laws related to matters that are secondary or connected to the main purpose of the law

Question 15

Can Corporations Power be used to regulate Natural Persons? (2 ways)

Answer 15

• Yes –> when natural persons are regulated as part of a broader law that primarily focuses on corporations
  Incidental Powers:
  Direct Powers: law directly regulates the actions of natural persons b/c these actions are closely connected to the activities of corproations

Question 16

What were the consequences of the Federal Government passing the Corporations Act 1989?

Answer 16

• Act assumed that Federal Government had POWER to form and manage corporations activities
  –> However, States Opposed this act, fearing they would lose control over company incorporations

Question 17

Can Commonwealth setup Payments to Corporations?

Answer 17

• As defined in Williams v Commonwealth –> Commonwealth CANNOT authorise corporation of powers as a payment of money to a constitutional corporation

Question 18

What are some common NON Constitutional Corporations? i.e. Commonwealth CANNOT legislate on that corporation