Corporations Law
Short Anwers
a) Any entity which is considered a reporting entity is required to prepare a report in accordance with the requirements of the Corporations Law.
Briefly explain why you agree or disagree with the above statement.
A reporting entity is defined as an entity for which there are users who rely on the financial statements, generated from its financial information, as their major source of financial information . These financial statements are used in the decision making process of both internal and external users, and therefore this information must be both accurate and of appropriate detail. In order for a general standard to be established across the accounting industry, it is important for a set of standards to be upheld by all. Therefore I agree with the statement.
Under section 298 of the Corporations Law, it is stated that all companies which are reporting entities must adhere to the accounting standards issued by the Australian Accounting Standards Board (AASB) . The generation of statements of financial position, financial performance and cash flow are all required under the section and they assist in giving an unbiased picture of the company’s current position. With the use of the International Accounting Standards Board’s conceptual framework, these reporting entities prepare reports using underlying principles in order to clearly articulate relevant information to those with a vested interest in the business. The outcome will be a reduction in the amount of asymmetric information available to external users. Notable recent examples of falsifying financial reports include One.Tel and HIH.
If precise and specific financial reports are not produced in relation to the guidelines set by Corporations Law, it is under the AASB’s jurisdiction to enforce compliance. This compliance allows for a general standard to be upheld on a country-wide basis, and with the introduction of International Accounting Standards in 2005, on a world-wide basis.
Therefore, an entity which is considered a reporting entity is required to prepare a report in accordance with the requirements of the Corporations Law. Without the generation of these reports, a logical and comprehensible overview of the business could not be produced and analysed.
b) On June 28 2004, an advertising agency paid $20,000 for a computer system. The accountant for the advertising agency included the $20,000 payment as an expense in the financial reports prepared for the year ending 30 June 2004.
Using relevant accounting concepts, briefly explain why you agree, or disagree, with the accounting treatment adopted by the accountant for the above transaction.
the liquidator. Legal issue: Dozey is a secured creditor of the company ‘Sleepy Head Pty Ltd’ and would like to enforce his charge against the company, but the liquidator, who is taking care of the insolvent company, rejected his claim. Relevant Case Law: Salomon v Salomon & Co Ltd [1897] . Discussion: According to the case of Salomon v Salomon & Co Ltd [1897], upon the incorporation of a company, it becomes a separate legal entity from its founders, directors, members and controllers. Debts entered
The case study in question is associated with the area of Company Law. Company Law is concerned with the regulation of powers, rights, duties and liabilities of the company and constituencies that are closely linked to the company . Company Law incorporates the Companies Act 2006, which regulates the relationship between the company and its managers. The company is a separate legal entity, through the Articles of Association the powers of a company are designated and exercised by the board of directors
be lifted when a corporation and members form a single economic unit. Adams v Cape Industries and Petrodel Resources Ltd accepted that the 'only ground for lifting the veil' by Woolfson v Stratchclyde which is the participation of a corporation is a 'mere façade hide the truth'. Below will discuss the Fraud, Façade or Sham, Agency and the last one is Single Economic Unit. Fraud, Façade or Sham means that the courts will inspect from behind of the corporation where the corporation was found purely
situation. Under S246B of Corporation Law, a class meeting is needed to approve a variation or cancellation of class rights. Also, the attendance of general meeting may not meet the requirement of the variation and cancellation of shares. Secondly, a constitutional term is ‘the memorandum and articles of association of a company formed before 1 July 1998 are taken together to make it the company’s constitution after that date under S1415 of the former Corporations Law, unless they have been repealed
director of a company, as stated under section 9 of the Corporations Act, is a person who is appointed to the position of a director or alternate director regardless of the name given to the position . As a director, there are several duties which must be undertaken to ensure that the company is in proper control. Some of these powers relate to 'good faith ' and ensure that any decisions made are for the best interests of the corporation. This ideology of 'good faith ' is a very broad and controversial
partnership or LLC, a corporation, “is a legal entity formed compliance with statutory requirements. The entity is distinct from its shareholders-owners.” Officers and directors are responsible for managing and directing the corporation; as a result, to aid officers and directors perform business decisions without fear of liability, it was create The Business Judgment Rule (BJR). Because it is presume that officers and directors will execute due care and best interest of the corporation success, this doctrine
Base on the summary House of lord in the case of salmon and compacts act 2006 section 16(2) and 15(1) Separate legal entity can be defined as when the company at law is an invisible and intangible artificial person created due to the incorporation of a business, and it must be treated like any other dependent person with its right and liabilities appropriate to itself. Furthermore, from a combination of sources
Separate legal entity A company is separate from its employees, shareholders or members in that the connection between them is usually a mere contract of employment which may be terminated leaving both parties to go their own ways. The same generally applies however to those businesses which are not companies. There is also more importantly usually a separation between the company and its owners. Shareholders are the owners of one or more units of equal value into which the company is divided and
Personality is that a company is a separate legal entity to its owners, who share limited liability for it, unless the court rules against it. It is one the most defying concepts for company law and was first established in Solomon v Solomon case in 1912, where the house of lords ruled that " the company is at law a different person altogether from the subscribers to the memorandum " thus creating the concept of “Corporate Veil”. Currently, under the Company Act 2006, once the company fills in all the
corporate personhood, that corporations can be granted many of the same constitutional rights and protections as natural persons, has become increasingly controversial as the law has been reinterpreted to expand the purview of corporate personhood more than any other time in American history. To address this concern, I argue that corporations should be considered to have legal personhood less equal than to that of a human because, relative to a natural person, corporations exist and operate in an inherently
purposes in different contexts. And we rightfully treat humans and corporations differently. For example, individual and corporate taxes are not one in the same. Unlike most individuals, corporations end up saving money each year when it comes to taxation, as Catherine Rampell points out in her opinion article, “Corporations are people. So what if people were corporations?” But in recent years, the United States has accorded corporations more rights on the grounds that they are, in a
that shareholders are the main drivers of the corporations and he believes that it is to them corporations must be socially responsible to. The goal of any corporation is to maximize profits and return the portion of these profits to shareholders for investing in the corporation. The shareholders can themselves decide which social causes to take part in rather than assigning a corporate executive to decide on their behalf. Friedman argues that a corporation must have no social responsibility to society
the farms in Iowa become 225,000 acre farms, there will be only 140 farms in the entire state' (Abbey, 2002). Large corporations are coming in and taking over the farming industry. They are making it almost impossible for small, family operated farms to survive. 'The six and a half million small farms of 1935 decreased to 575,000 by 1998? (Abbey, 2002). The large corporations are using the land like miners-they strip it down and get what they need, but they don't put anything back to it. Studies
when we lack knowledge we perform practices unknowingly which could lead to major lawsuits. Ownership of a business can be formed as sole proprietorship, partnership, or corporation. Potential great profit is the reason most people want to start and some do start corporations. One must have knowledge, and understand business law in order to have a positive outcome with operating an organization (Clarkson & Miller, 2012). Many people desire to
Brennan brothers he held personally liable, because they mislead their attorney? Why or why not? The benefits of a corporation The pierce corporate veil is exposing the shareholders to personal liabilities{RMBCA}. Brennan’s Inc. is a family owned restaurant that has family members as owners and shareholders. The court case involves a dispute with another family member. The corporation is the legal entity and it separates individuals who comprise; therefore, protecting the shareholders from personal