Company Law MCQ Final Exam 2023.

Company Law MCQ Final Exam 2023. From a shareholder's point of view, the purchase of shares in a Pty Ltd company may be an attractive option because: - ANSWER The investor has limited liability. Jim has purchased 25% of the shares in Zig Zag Pty Ltd, a small proprietary company. The legal effect of this transaction is that - ANSWER Jim has acquired certain rights, such as voting rights and the right to receive a dividend (once declared) A company is a separate legal entity. This means that - ANSWER The company is separate from its shareholders. The company is separate from its directors/officers. The company is separate from its employees. Concerning the application of the Corporations Act 2001 (Cth), select the most appropriate statement - ANSWER The Corporations Act 2001 (Cth) applies uniformly throughout Australia. What are the roles of ASIC - ANSWER Register and regulate companies Receive and process information Register company auditors and liquidators Regulate financial markets Regulate providers of financial services Investigate contraventions of corporations legislation and provisions of the consumer law In the case of Salomon v Salomon & Co Ltd (1897) the High Court of England held that - ANSWER The company was a separate legal entity (separate from its director) and it incurred debts in its own right The case of Lee v Lee's Air Farming Ltd (1961) illustrates that - ANSWER Both: A company is a separate person from its founder(s) and director(s). b. A company can contract with its founder(s) and director(s). Corporate veil - ANSWER It is terminology used to separate the company from its members and directors/officers The courts are generally reluctant to 'lift the corporate veil' because - ANSWER All: a. The company is a separate legal entity. b. The company contracts in its own right.