Corporations Law - Question 1

The simplest of the structures is called as the sole trader according to the Australian Corporation Law. The main advantage is that owing to the only owner, there is complete control over the decisions made in the business. However, on the flipside all the debts as well as the tasks need to be performed by the sole trader only. The business is comparatively has very few reporting requirements as well as has a reasonably low cost operational structure. The tax returns are filed as an individual and hence no separate corporate registration is required respectively.

The second main form of business construct would be that of the partnership. As the name suggests there needs to be 2 or more people those infuse capital to partake in a particular business as well as share the proceeds or the loss from the respective entity. This system is bifurcated into three different sub groups namely the general partnership, limited partnership as well as incorporated limited partnership respectively. The partnership has comparatively heightened level of compliances as well as registrations while requiring a separate tax registration number. The partnerships however are easy to construct as compared to the private companies respectively.

The third and the last type of company which is a separate legal entity as compared to the sole proprietorship and partnership respectively. The members of the company are liable towards the debts of the economic entity only to the extent of the unpaid shares towards the corporation. The set-up is complicated as well as time taking to start with ridded with a number of related compliances respectively. The enterprise is considered to be a separate legal entity and needs to comply with all the provisions of the corporation’s act 2001. Thus companies need to be organised in a detailed manner respectively. With sustainability in perspective.

Corporations Law - Question 2

Partnership is an agreement wherein the persons involved in the business relationship are tied with each other based on contractual arrangements. According to the partnership act 1963 in Australia the type of partnership would decide the nature of liability that would be imposed on the partner those are party to the arrangement. In the present question the nature of the partnership has not been highlighted in a clear manner. This tantamount to a scenario wherein the partner needs to be clarified of his / her liability on the occurrence of a situation respectively.

If the partnership nature according to the agreement amounts to limited partnership, then the liability of the partner would be limited to the amount that is being committed or being held in his form of capital in the institution as contributed by the particular partner. However, on the flipside there are also general partners toes would not be limited by the liability of shares or contributed capital respectively. Hence, the liability of the partner is generally limited with the aid of the tie of partner they are in the given association.

The partnership deed needs to be consulted to understand the rights of the partners for conducting the business. If the deed states that a written consent of each of the partners need to be undertaken for operational decision making then in this case Teresa might have to bear the cost of the wrong decision either to the extent of the capital contribution or outstanding shares or if she is a general partner the loss encountered by the business to the fullest extent. Additionally, she is bound to make good such loss of the other partners if any in terms of market share or goodwill that might have been endured if such an event could be economically quantified.

Corporations Law - Question 3


The facts of the case are like the following. Mr. Salomon had traded his developed shoe business to a corporate entity that has been incorporated for this purpose under the Companies Act. The registration under the Act was finished by making Salomon and his family, as the members of the company and Mr. Salomon received fully-paid shares as well as debt instruments to a tune of £10,000 those were promptly assigned forward. The business slowly started failing and finally arrived at the stage of insolvency. The liquidator was doubtful of the plan thus hatched and hence held Mr. Solomon responsible for the entire ordeal owing to the unfolding f the events in a suspicious manner. Secondly the liquidator also argued that company was in fact to be considered as an agent of Salomon, as a result, he is expected to indemnify all the other stake holders concerned with the company for the loss endured by him owing to the erstwhile insolvency.


According to retracting the corporate veil this transaction seems to be of the nature that is intended to keep the other stake holders to the creation of the company in dark about the perpetrated insolvency of the same. The main rule here would be that of company’s property and debt is not separate from the director as it cannot act by itself. S.399 CA 2006 and .993 CA 2006 offer details as to the criminal offence and this is connected to the act committed in this case.


The separate entity principle was used to argue for Me. Solomon however the very ideology of creation as such is to enable the company escape the biological death applicable to the humans and achieve the goals for which it was incorporated respectively.


The legislature always is created to protect the interests of all the stake holders those are involved with the economic entity. Hence, in this case it was ruled by the judiciary that the act led to the manufactured insolvency of the company and hence Mr. Solomon has the fiduciary responsibility to indemnify all related stakeholders.

Corporations Law - Question 4

The basic legal concept that discriminates in between the individual personality of a corporation as compared to the individual existence of the respective shareholders, and saves them from a situation of being personally getting involved in the company’s debts and other obligations on one hand and at times to reveal the perpetration of an activity that is detrimental to the company is called as the lifting of corporate veil respectively. Hence, mainly in scenarios where the key personnel or certain directors of the company are about to or have commit frauds and improper or illegal acts this process would be used to identify them as well as bringing them to justice. Since an artificial person cannot be held liable for conducting business that happens to be anything illegal or fraudulent, the façade of corporate personality will need to be erased for identification of the individual / group of personnel that might have perpetrated the fraudulent activity.

Hence this results in a situation herein the stake holder that had performed the detrimental act is considered to be responsible hence held liable for its corporation’s debts despite the rule of limited liability inclosing the separated personality. The veil doctrine hence is involved when the above detailed Solomon vs. Solomon case as well detailed the same in a very clear, illustrative as well practical manner respectively. Hence, in essence since a company can act only through human agents any decision made by them that could cast detrimental impact on the functioning of the economic entry and the other related stake holders would be a case to lift the corporate veil of spate personality and to safeguard the assets as well as business of the company.

Corporations Law - Question 5


The Company had hired Mr Lee that was holding majority stakes in the company while also being a director for like. He in fact held 2999 of the 3000 shares of the company and the rest was held by his wife that was a nominee for him. He was the director who was also a pilot and was killed in an accident. The wife wished to claim workers compensation owing to the nature of the accident. Now after careful consideration of all the above detailed factors listed in relation to this case the central question that emerges is whether he was an employee of the economic entity.


According to retracting the corporate veil this transaction seems to be of the nature that is intended to keep the other stake holders to the creation of the company in dark about the perpetrated insolvency of the same. The main rule here would be that of company’s property and debt is not separate from the director as it cannot act by itself. S.399 CA 2006 and .993 CA 2006 offer details as to the criminal offence and this is connected to the act committed in this case.


The council held that since he was acting in a separate capacity and hence could be the employer of the company. Thus the contractual ties between him and the company cannot be negated. Thus it was concluded he was also a worker of the company.

Conclusion on Corporations Law

Considering the above detailed facts a claim was permitted within the limits of the respective statutes.

References for Corporations Law

Felach, T., Ofir, M., & Procaccia, U. (2019). Piercing the Corporate Veil: Theoretical Analysis and Empirical Evidence. Tel Aviv UL Rev., 42, 199.

Hawkins, D. (2018). Bankruptcy-Piercing the Corporate Veil. Wisconsin Law Journal.

Puri, P., Orlova, A., Macklin, A., Seck, S., & Simons, P. (2018). Piercing the Corporate Veil: Multinational Corporate Accountability 2018.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Corporations Law Assignment Help

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