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Corporations Law

Issue:

• Whether the creation of a company absolutely remove James from any potential liability?

• Whether James need any interactions with the ASIC or ASX if he set up a company?

Rules:

Corporations Act, 2001(Cth)

Application:

• Incorporation of a company will remove James from liability, loss, or contracts made by his company (as the company is a separate legal entity)[1], if he does the business with principles and as per the law established, but the liability will arise if they indulge in any fraudulent activity. The liability of James being a shareholder will be limited to the amount of shares held by him which remain unpaid and no further liability can be established[2]. As per[3], the director of the company may be held responsible if there is any breach of directors’ duty[4] . Therefore, if any breach and fraudulent activity occur then only the dir....