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Corporate Law

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Restriction on the sale of the shares in the company
Ted can restrict the sale of the shares in the company due to few reasons. The first reason is to minimum subscription of shares. According to section 723 (2), the shares will not be issued till it receive the minimum number of shares or the minimum amount is raised. It means that the person making offer will not issue any shares till it reaches the minimum subscription condition is fulfilled. If the minimum subscription is not satisfied within the four months from the date of the disclosure, the company needs to take a few actions. The first action is to repay the money received to the applicants. Or need to hand the applicants a supplementary disclosure by changing the terms of the offer and give one month time to withdraw their applications and repaid or to issue securities and produce them a supplementary or different disclosure by changing the terms of the offer and one month time period will be given to return the securities and be repaid. All these compile under section 724.
The next reason is stock exchange listing. It brings more value when the shares are listed on the stock exchange. It also gives a protection to the securities holders once it complies with ASX listing requirements. Henceforth, if Ted’s Corporate Service written on disclosure documents that the securities will apply for listing in the stock exchange market; therefore, it should follow every procedure to be listed. If the securities not listed within the given time period, the issue will be invalid and Ted Corporate Service needs to repaid according to the disclosures.
The last reason is the expiration of disclosure documents. Each and every disclosure will be expired within 13 months after the date of issuing the shares. Based on Section 725 (3), if the application was obtained by Ted’s Corporate Service after the expiry date, the company must act accordingly. It is either the company pay back the money received to the applicants or produce the applicants a different disclosure by changing the offer and give one month time period to withdraw the applications and repaid. The last action can be taken by Ted’s Corporate Service is to issue securities and produce them a supplementary or different disclosure by changing the terms of the offer and one month time period will be given to return the securities and be repaid. It shows that Ted can restrict the sale of the shares in his company.
Further advice on establishment of a company
There are few advice would like to give to Ted on the establishment of a company. Firstly, Ted can choose on the company name. The company name can be its Australian Company Number (ACN), a nine digit number given by the ASIC based on the registration. Ted can even check the proposed company name is similar with the name have been registered before in Identical Names Check provided by ASIC. Once it’s registered, the company needs to display its name outside the building where the business is been carried out. Ted’s Corporate Service must make sure the company name and it’s CAN must appear in the each and every public document such as invoices, cheques and the company’s letterheads based on Section 153(1). Furthermore, a director should be appointed after the registration. The company needs to inform to ASIC by providing the personal details of the directors within 28 days of the appointments. And if the directors want to resign or retire, he/she need to submit a letter to ASIC. Before operating the business, Ted needs to employ a public officer, who will be responsible to make sure everything the company should be done comply with Act; within 3 months. Companies must keep a minute book to record the meeting with the members and directors for every month. This book can stored in computer or written form and must be presented at anytime it has been asked for. Apart from that, all companies need to have a financial record. It should be record properly. This record is useful to analyze the company’s performance and its position. Ted must remember to keep the cheque butts, bank statements and invoices for a reference. According to section 327(1), the director needs to employ one auditor within one month after registration. Hence, it’s very important for a company to open a bank account. It will be helpful for its daily transaction. These advices will be very important and useful to Ted in order to establish a company.…...

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