Business Law - Toan, Brookland Greens Company - Assignment Example

Business Law Student’s name Course Institution Date Introduction The Corporation’s Act of 2001 governs all companies established in Australia. Further the Australian Securities and Investment Commission is charged with the responsibility to administering the Act. A company is considered a legal person having rights of a living person. A company under the Australian law is defined as a legal entity that enjoys the rights of holding property, can sue in its own name and can as well be sued in its name. Thus, a company holds the legal privileges as well as liabilities similar to those held by a living person. Question1 Case summary Toan had individually bought land in government auctions. He could not procure additional land in his name as it had been prohibited. Thus Toan resorted to bid for the government land in the name of his company where they are both shareholders. However, some government officials claimed that the company and Toan was virtually the same person. Companies are used by their proprietors to conduct business dealings in the case that they are not willing to take up trade activities in their names. Under the Australian law, there are various forms of companies. First, a proprietary company, this is a company that has one to fifty shareholders. Secondly a public company, that has a minimum of two persons but does not have a limit to the number of subscribers. Besides the difference in the number of maximum shareholders, public lodgment of prospectus forms the second basis for differentiating the two forms of companies. A proprietary company cannot place a prospectus to the public to raise funds. This is unlike a public, which can raise funds by trading in the stock exchange. In the case of Toan, the nature of company formed was a proprietary company, having him and his wife as the sole shareholders. Further, Toans Company has the following features. Properties of a company as a legal person A company has a separate legal identity from that of its shareholders. It has both criminal responsibility and liability. Secondly, a company has the right to own property in its own name. Thirdly, a company can sue as an independent entity. The company can be sued as well. A company also has financial obligation that among others include, tax obligations and can bid for loans in its own name. a company also has limited liability, this is to mean that the shareholders to a company are only obliged to meet the company’s financial obligations to an amount limited to their capital contribution to the company. This is in the case of winding up (Pendleton, 2009, p. 100). In the case, Toan had formed a proprietary company that had him and his wife as the sole shareholders. As the company had a separate legal identity from its shareholders, it had the right to bid for the government land. Toans mere obligation at the auction was to facilitate the dealing, as the company could not physically present itself at the auction. The company could thus initiate the proceedings against the government officials on the defenses of, separate legal entity, the right to own property and separate financial obligations. Question 2 Case summary Brookland Greens Company developed residential houses on a piece of land, which was an old garbage fill. The accumulated methane gas led to the explosion of one of the five ho-uses built leading to the death of all the five occupants of the houses. The company could be sued for criminal killing. Negligence is the failure of to exercise reasonable caution the result for which is bodily harm or death of individuals. Criminal liability in Australian law can be established through the identification or the agency doctrines. Based on the agency theory, employees to include the directors are considered as agents to a company. Acts committed by the employees on behalf of the company bind the company if such acts are done in execution of employee contact. Based on the identification model, a company is liable for serious offences such as manslaughter. This model requires explicit identification of the act that the act or omission was done by one with as much authority as to be acting as the company itself. In order to charge a company with criminal negligence for manslaughter, the defendant must prove that the act, in this case development of residential houses, caused death. That the accused voluntarily but without intent to cause bodily harm led to the circumstantial death of persons due to gross negligence on his part to take reasonable care. Reasonable care means the standard care that any ordinary person, under the circumstances, would take having considered the great degree of risk posed by failure to take such care. Thus, company negligence is hedged on an individual’s negligence. In this case, assuming that there is a crime such as criminally negligent killing, Brookland Greens Company would not be held liable. The directors had no way of knowing that the land for which they had purchased and subsequently sold off for residential building was originally a garbage landfill. He had taken all reasonable care in developing the pieces of land. The company could plead on the defense of inevitable accident as he had exercised ordinary diligence and caution in building the houses (Pendleton, 2009, p. 129). Doctrines/techniques of imposing corporate liability The identity doctrine; this doctrine postulates that the actions by individuals with significant authority in a corporation are considered to be the actions of the corporation. This is to say that offences by such individuals can also be said to be offences committed by the company. This doctrine would apply, as Toan was the controlling mind of the company thus the company would have been charged for manslaughter had it not been deemed as not taken reasonable care /negligent in developing the piece of land. Agency doctrine; this doctrine puts forward that individuals actions by representatives of the institution acting within the employment contract, are considered as the actions of the company. Actions that are ultra vires are charged onto the employee or director who perpetrated such crime. In this doctrine, the company enjoys strict liability. Corporate as a separate legal entity This doctrine postulates that the firm is an independent authorized being. This means that transactions executed by the company should be charged on the company, as it is legally capable of suing and being sued. Thus, crimes committed by the directors are considered those of the company. Aggregation technique; this doctrine sums all the actions of all persons having knowledge and charges criminal liability if several employees were the controlling minds that led to the crime. This doctrine would not be applicable as only one person was involved in the development of the land (Pendleton, 2009, p. 2011) Reference Pendleton, V 2009, Australian Business Law, Pearson Education Australia, Sydney. Read More