Corporate law Master Case Study Example | Topics and Well Written Essays - 2000 words

Corporate law Master - Case Study ExampleThus, from any appearances the association is indeed a close one.If it was not utter that the spouses Paul and bloody shame had registered the company in 1980 with the name Scott Enterprises PTY. Ltd., the first thing that would come to the mind is that the spouses must have formed a partnership quite because the business originally involved only the two of them i.e. the spouses. Most partnerships involve only two business partners (Clifford 2006, p.7). But such is not the effect here, although if I were the spouses adviser at the time they contemplated to form a business entity, I would have suggested a partnership instead because a partnership is simpler and entails no come along elaborate requirements to satisfy the requirementsof the Corporation Act. Besides, it entails less expenses than incorporating and gives them more leeway and freedom of action than incorporation, which congeals one to the reins of government control. If the s pouses chose partnership instead, either Paul or Mary can bind the partnership by any legitimate contract in the ordinary course of business of their manufacturing concern.But probably, the spouses had in mind the succeeding(a) of the company. ... ey might be forced to retire from the business due to old age, debility, sickness, incapacity or even worse death to any or both(prenominal) of them (Humphreys 1998, p.6-1). Corporation provides more stability because it affords the right of succession, in which case if any of the above occurs, they can safely ensconce the corporation in the hands of the trio children - Suzy, Peter and Sam (Dine 2000, p.101). A corporation ensures continuity and permits transfer of shares of their declinations to the three children if any of the above happens. Perhaps, the spouses want to see the company they laboured hard to put up go a long way and they desire to experience the fruits of their hard work when this company is already in the hands of th eir children. A corporation just cannot be dissolved voluntarily because it requires a vote of two thirds of the stock and its dissolution can only take place by roughly judicial or administrative act of the government ( Davis 2000, p.6). 3The form of corporation can only be a close corporation because all of the corporations issued stocks are held of record by only 5 persons, with the three children holding each 30% of the shares and the 10% share being retained by the spouses. Although the case is silent about any action to make a public offering of the shares of the corporation or to enlist the corporate shares in any stock exchange, yet the tenor of the case strongly suggest that the spouses never did any of these acts nor have any intention to make one in the future (Moye 2004, p.209). The propose to keep the business within exclusive family control is so strong we can just surmise that the