Essay about Problem Set 1

1638 Words7 Pages
CACL 2014 Case studies and problem sets Problem Set 1 The following problems and questions should be answered after you have read Chapters 1 and 2. 1. GML is a public company. Its shares are listed for quotation on the ASX. What does it mean to say that a company is listed? Are all public companies listed on the ASX? See [¶1-120], [¶1-140] and key terms [¶1-500] If a public company is listed on the ASX, members of the public can buy and sell securities (such as shares) issued by the company on the secondary market conducted by the ASX. People wishing to buy or sell securities must do so through a broker who is a participant in the ASX. Listed companies are required to comply with the ASX’s Listing Rules, which impose some…show more content…
Because it is a separate person, it has its own legal identity or personality, which means that it can, for example, hold property in its own name and enter into contracts in its own name. It can also commence or defend legal proceedings in its own name. Importantly, its liabilities are its own and not those of its members or officers. Historically, commercial companies developed as a means of allowing a number of people to pool their resources (in the form of capital or management skills) to undertake an enterprise too large for a single individual. Creating a separate legal person to hold and incur the rights and obligations of the enterprise simplified dealings between the enterprise and those with whom it conducted business. With the introduction of limited liability in the middle of the 19th Century, participants in an enterprise could limit the extent to which their own personal wealth was put at risk if the enterprise failed. In short, limited liability means that even if a company is unable to pay all of its liabilities, then those participants who have invested money in the company are not liable to contribute any more than what they have already paid (or agreed to pay) to acquire their shares in order for the company to meet those liabilities. Application of law to the facts Although one of the key drivers of the development of companies was to
Open Document