Question:
Write an essay on The ASIC key.
To register a company, the person who planned for such registration needs to apply to the ASIC. The ASIC key is an important aspect in the formation of the business. The ASIC key is one unique number that is used in the ASIC Connect, helping the new registers of the business to protect their business information (Rahman 2013). The key makes and gives the assurance to the new business holders that only they will have an access to the business information, and also only other authorized person or members can get the access to the business. The ASIC mentioned under the section 117 of the corporation act. The primary step is to register concerning the section.
The following step that comes after the registration then the type of company has to be determined as mentioned under the section 112 of the act. Here, we will form a Company of Proprietary Limited (asic.gov.au 2016).
Company type: Proprietary Limited Company (as mentioned under Sec 112 of the Act).
The type of the company is ten referred with the sec 601W of the corporation act:
Next under the clause nine under the section, this defines that other than the ADI body of Australia, it is the duty of the company to affix the name in the painted form. The company also must paint the name in such manner which is visible clearly, and the name must be put in front of all the business premises and also in front of the registered office.
So,
The mention of section 112 of the Act is mandatory for understanding the type of company and also the liability they hold under any pattern of the corporation (Human et al. 2015).
Next step is the vital step for the propitiatory business set up. In this context, the reference from section 117(2) of the Act is mandatory.
The primary step in the registration includes that the company must indicate the liability of every member in the within the name of the business setup:
As, for this situation to set up a proprietary limited company, the suffix usage is an essential step included while the registration done.
Choosing a name of the company in such a way so that it is not registered with the same name in any ongoing business:
The name one chooses for the corporation must be such that it has a chance to get approved from ASIC since sometimes the ASIC rejects the approval when found that the name has some similarity with some ongoing business firm. The ASIC will also reject the registration if they find that the suggested name is offensive or carries the illegal motive. Upon such situations, the there are some suggestive moves from the ASIC to bring necessary amendments.
There is an alternative procedure available to name the company using the ACN or ABN, which means the Australia Company Number or the Australian Business Numbers respectively (australia.gov.au 2016).
While the name choosing of the corporation gets over, then the next step that comes is the valid consent from the members. Under the act of the corporation, the valid consent from the members of the company is an important step during the time of registration.
The following members are liable to produce their valid consent:
It is important to note that under the propitiatory form of the company it is not mandatory to have a post of secretary; the presence of the directors must have at least one with the holder of Australian Citizenship.
After attaining the consent from the members of the acting corporation, then follows the step of registration of the corporation, where certain procedures are followed:
The mentioned pattern will follow for all the business shareholders in the company by the number of shareholder 1 and so on.
Apart from that, the registration form will comprise of:
Additional notes:
Fees: $738 GST.
Mode of payment:
Lastly, accepting the terms and conditions to fulfil the registration.
The company needs to set up a constitution as under section 134, which includes the governing procedures and also the pattern of the internal management (legislation.gov.au 2016).
The constitution comprises the rules mentioned under the replaceable rules concerning sec 135 of the Act.
Although the proprietary business does not need to do not need to set up the constitution, it is advisable for the entire registered corporation to set up a corporation so that it is easy to keep the company record. The clause also includes the necessity of the company preference for issuing the shares, special resolution approval which includes the repayment of the capital, profit participation, and the surplus assets, voting rights and cumulative dividends. Constitutions are mainly based on the redeemable share preference at the time of such occurrence of the events or with the option of the shareholders (Anderson et al. 2015).
The formation of the legislative act comes with the necessity of the occurrence so that there are some specified that can be followed while any procedures carried out. In the corporation law, the act so mentioned explains about the liability or the power. Some sections are amended due to the controversy. The explanation can be carried further:
Section 124: this section defines about the legal capacity of any corporating head with the vested powers to carry on with some activities. The section got a critical role in the formation of the business (Bakan 2012). It is paramount for the members acting since they got the power to issue shares or cancel shares or even issue the debentures. Some situation requires the company to grant some opinion for security interest option. The legal authority provides the company to act in concern with the situation, provided that it is mandatory that they maintain the good faith and belief within the acting members (abr.gov.au 2016).
Sec 129(1): the constitution of the company along with the replaceable rules are compiled together since it is mandatory for the company to maintain a constitution even though that is not mandatory as in the case of the proprietary form of business. The combining of the replaceable rules with the actual constitutions helps the corporation to make essential changes or amendments during the time of absolute necessity (austlii.edu.au 2016).
Section 588(M) (3): the clause arises some necessity to the act after the introduction of this section. Here there is an explanation of the creditor who is not liable to get the damage in means of compensation from the directors of the company. The creditors are also known as the investors of the company; hence, they are liable to get the compensation to the loss occurred to them due to the insolvency of the company as mentioned under the subdivision B concerning the section of the act, and the amount is equal to the amount of loss occurred (Dobson 2014). Also, the liquidator of the company is also liable for the compensation provided that the director has been proved for his insolvency (Wright 2014). So, all the three sections mentioned here hold an important part in the carrying out of the business.
References:
Abr.gov.au. 2016. For Business, Super funds & Charities | Australian Business Register. [online] Available at: https://abr.gov.au/For-Business,-Super-funds—Charities/ [Accessed 23 May 2016].
Anderson, C., Howell, N. and Mason, R.F., 2015. Submission to the Productivity Commission issues paper business set-Up, transfer and closure.
Asic.gov.au. 2016. Lodging paper forms | ASIC – Australian Securities and Investments Commission. [online] Available at: https://asic.gov.au/online-services/lodging-paper-forms/ [Accessed 23 May 2016].
Austlii.edu.au. 2016. CORPORATIONS ACT 2001 – SECT 129Assumptions that can be made under section 128. [online] Available at: https://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s129.html [Accessed 23 May 2016].
Austlii.edu.au. 2016. CORPORATIONS ACT 2001 – SECT 588MRecovery of compensation for loss resulting from insolvent trading. [online] Available at: https://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s588m.html [Accessed 23 May 2016].
Australia.gov.au. 2016. ABN, ACN, business management | australia.gov.au. [online] Available at: https://www.australia.gov.au/information-and-services/business-and-industry/abn-acn-business-management [Accessed 23 May 2016].
Bakan, J., 2012. The corporation: The pathological pursuit of profit and power. Hachette UK.
Dobson, R., 2014. Liquidation Winding up a company. Busidate, 22(4), p.5.
Human, S.E., Clark, T., Baucus, M.S. and Eustis, A.C.S., 2015. Idea or Prime Opportunity? A Framework for Evaluating Business Ideas for New and Small Ventures. Journal of Small Business Strategy, 15(1), pp.59-80.
Legislation.gov.au. 2016. Corporations Act 2001. [online] Available at: https://www.legislation.gov.au/Details/C2014C00519 [Accessed 23 May 2016].
Rahman, A.R., 2013. The Australian Accounting Standards Review Board (RLE Accounting): The Establishment of Its Participative Review Process. Routledge.
Wright, C.J., 2014. A critical enquiry into the need for avoidance provisions in business rescue proceedings.
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