Essay on "Company Law the Functions"

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There are several statutory provisions that must be considered in light of the case laws in question. For instance, s 131 (1) and s 131 (2) of the Corporation Act. s 131 (1) which deals with the Ratification after the registration of company notes that if an individual enters or purports to have entered into a contract for the benefit of as well as on behalf of a company prior to its registration, then the company/corporation becomes bound by the given contract. This contract entitles the individual to benefit should the company or a company that is identifiable reasonably is registered and then effectively ratifies the given contract within the time which was agreed upon by the parties to the given contract as well as if there is no time which is agreed after the contract is effectively entered into.

s 131 (2) deals with liability for the damages should the company not ratify or register. The statute law notes that an individual is not liable to pay damages to any other person to the pre-registration should the company not be registered. This is also the case if the company is registered but does not effectively ratify the contract

Conclusion

Even though the pre-registration contracts are formally being replaced with the Corporation Act taking over with full effects, it is worth noting that several incidents of the pre-registration contracts are included in the Corporation Act. Every legal entity must therefore be ready for a bruising battle for the supremacy on the basis of performances and merit. As noted by Courtney (2010) the tension that exists between the practical reality and legal logic in regard to the arrangement of contracts on behalf of corporations that are not yet in existence can only be solved in most jurisdictions by statutes. The relevant provisions are contained between s 131 to 133 in the Australian Corporations Act 2001.

References

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