Corporation Law: The Commercial Scallop Essay

Question:

Describe about the Corporation Law for The Commercial Scallop.

Answer:

1: In the given case, Bob Beech is a scallop fisherman, who is engaged in the commercial scallop fishing in the coastal water of Jervis Bay in New South Wales. The subject of scallops fishing in the coastal water comes under the protective legislation that ensures the diferent rules and regulation in the concern of this activity. Scallop Fishing and Marketing Act provide a quota system for each fisherman. Under the quota system, fisherman’s can apply for a permit to catch 50 tonnes scallops in a year. Further, the act provides the power to Scallop Marketing Authority to purchase scallops up to a limit for the fisherman.

As per the regulation and act of Scallop finishing and marketing, no one fisherman has right to beynod than fixed quota. If authority provides, fishing scallop more than the quota limit then it is offensive. Along with this, if the New South Wales government establishes the high scallop production then variable recruitment problem of juvenile scallops must be addressed. Therefore, New South Wales will need to establish a substantial scallop farming industry for the scallop fishermen. It implies fisherman and authority don’t have right to produce excess Scallop fishing beyond the Quota then it is an offense. If anyone goes over the quota then it can be a matter of the penalty that may be up to $100,000. As per the capacity of Bob Beech, his daughter Alice tells to Bob that by the incorporating a company they can double their catch.

In the case of Bob Beech, the main issue is that whether Bob can double his catch by the incorporating a company. According to Australian corporation act 2001, corporation is a legal entity. This defines that liability of corporation is similar to an individual. Cause behind this, Australian corporation act is separated from the corporation rights and corporation owners (Bottomley, 2016). Corporation and owner can work independently on the basis of their situation in the case. According to Scallop Marketing Authority’s act, it is not possible that individual can get an exemption to a corporation. Because Australian corporation act says that an individual can get 50 tonnes quota of Scallops in a calendar year. It indicates that if an individual is a genuine person and legal entity can set catching quota according to allotted quota.

Moreover, Scallop finishing and marketing act statement includes specific and particular word to him or her. It indicates that regulation and laws of Australia don’t allow to the corporation to enter into catching the double Scallop. And Scallop finishing and marketing act statement defines that quota of catching Scallop will be allotted to a legal person and genuine person. This means a person is not eligible to get the quota of catching the Scallop after incorporating a company. According to Australian corporation act 2001, an incorporated association is a legal entity that will be registered with the state and territory authority.

Therefore, it can be said that suggestion of Bob’s daughter is not correct because the suggestion of Alice is opposite to Australian Scallop fishing and marketing act. Australian Scallop fishing and marketing act does not consider the fishing activity of the corporation. Along with this, area of the Jervis Bay in New South Wales is for the regeneration because stock of scallops in this water is limited (NSW Department of primary Industry, 2016). So, allocation of more quotas can affect the eco-system of Jervis Bay and regeneration policy of the New South Wales. The area of Jervis Bay of Scallop fishing has the limited availability of Scallop stock. It means, if New South Wales increases the limit of quota in a calendar year it can affect the regeneration policy and process.

2: In the given scenario, New Nirvana limited named company formulates the band that basically focused on the hard rock songs. The company has so many subsidiaries which handles all types of functions of the company. All the working policies and ideologies of the company are formed by the New Nirvana limited company and also all the guide lines of its subsidiaries are made by its parent company as well (ALRC, 2016). As all know that any incident in the subsidiary will impact the entire company. In the same way an incident in the subsidiary company named Nuclear Blast Sounds Limited affected the audiences who were at the event of the company and suffered the hearing problems forever in their life. Now the matter is that the affected persons are claiming insurance from the subsidiary Nuclear Blast sound limited. The following case will be explained with the following arguments that will the subsidiary company give the insurance claim to the affected person or not. And if yes, then will it be given by the subsidiary company or by the parent company.

According to the corporation law of Australia mentioned in the 5th part of section 588 to 10th part of the section 588, the subsidiary company will need to acquire the claim from the parent company and will give it to the affected persons during any incident happened at the site of the subsidiary company (Insurance Law, 2016). In that case it is the responsibility of the parent company to maintain its reputation to deal with the entire problem and help the subsidiary in that matter. But if the parent company refused to pay the claim, then the subsidiary company do not have the right to force the parent company to pay the compensations to the affected persons. According to the laws, the subsidiary company will be treated as the separate company and also the decisions or rules of the parent company cannot be inter related to each other as all the decisions are taken by the different teams of the higher authorities.

From the above discussion, one needs to keep following points in mind while dealing with the present case study that is given. The points can be:

As all know that the revenues of the subsidiary company can be assumed as the revenues of the parent company. In the same way the profits earned by New Nirvana Limited will be assumed to be of the profits of Nuclear Blast sound limited. Further the business ideology of the subsidiary should be regulated by the parent company (Puig, 2000). The following concept is raised in the case of New Nirvana Limited and Nuclear Blast sound limited company.

The business values and visions are set by the parent company. In the given case study, it is the moral value of the parent company to give the compensation to the affected people. Also it is well known that the entire business of a company is always regulated by the parent company only and no matters how much subsidiaries it have (Morris Black Burn, 2016). The profits in the business are always shared in between the parent company and the subsidiary company.


From the following points, it is concluded that the parent company is liable to give the insurance claim to the affected persons in case the subsidiary company is refused to give the claim. Also, it is the parent company named New Nirvana Limited who have assigned the event to be completed by its subsidiary company named Nuclear Blast sound limited (Morrison and Anderson, 2015). And it is the moral duty of the parent company in case of any miss happens in the site of its subsidiary company and gives the relief to the affected persons.

3: In the given scenario, Millennium Private limited company formed by the three persons named Simon, Don and Michael for the work of the management of the projects. According to the given case, Don is given the responsibility to deal with all the matter of property or lands (Legislation, 2016). According to the company laws, the company needs to appoint an arbitrator to solve the matter in between the company and the employees before going to the court. But after a period Michael and Simon decided to terminate the position of Don from the company because they are not satisfied by the work performance of Don. Now the issue is that the decision of Simon and Michael is acceptable or not and will the decision will impact the company laws or not.

The law related to the corporation in Australia is responsible for all the legal issues related to the internal composition of any company and can work on the basis of following two rules that are corporation’s provision act of 2001 and the law regarding the constitution of the company. Both the laws have their criteria and worked according to that only. Both the law followed by some sections like section 135 and 136 and according to that main idea of the corporation law is to process the business as well as to run on the basis of the constitution that is set to run the entire company. In the same way according to the law of corporation of 2001, all the changes that are made in the constitution must be reminded to all the employees or the members of the company in a gap of seven days and is mentioned in 139th section of the corporation law (ASIC, 2016). Finally it is concluded that all the changes in the legal aspects of the company must be according to the constitution and must be followed by the company in any prospective.

Form the entire scenario one can easily find that all the issues of the changes made in the company were done by Simon and Michael and both of them did not follow the entire process of the constitution of the company in terminating the responsibility of the third member named Don. According to all the statements made by both the members it is clear that that wanted the new member in the team who can earn more profit for the company than Bob and more efficient to take the entire responsibility for the beneficial of the company (Austlii, 2016). Rather all the situation they assured that Don will not be avoided to get his part of share in the profit earned by the company. But the issue got worse when Don reached in the court to take the legal against the other two members where both of them showed the entire case and stated that all the matter regarding the issue was informed to don earlier and all the issue was resolved according to the law of the corporations and do not abide any law that opposed the legal aspects of constitution that were formed to run the business of the company.

They also stated in the court that all the matter is clearly mentioned in front of all the members of the company and all have given their acceptance in the matter. The decisions taken are in favor of the company growth and to increase the reliability or effectiveness of the company in front of all the shareholders of the company. The decision to add new member in the company is taken to reduce the burden of Don as the entire responsibly cannot be taken by an individual (Mitchell et al, 2016). Simon and Michael also argued in the court that decision to take the legal against the company by Don is not right as Don had to follow all the company law’s in the best member and should not go beyond the constitution established by the company.

As according to the corporation law Don did not have the right to go in the court first. Don must meet the arbitrator first as formed by all the members of the company and if the matter is not resolved then only had the right to move in the court to get some assistance. So both the members named Simon and Michael can appeal in the court to reject the plea made by Don as Don had violated all the law regarding the corporations and also not follow the constitution of the company (Unimelb, 2016). Also stated that the legal aspects of the company need to be followed properly and also assured in the court that profits of Don must be properly shared by the company rather than to terminate Don from his job. This showed that how the company takes the legal aspect in the right way and proves their decisions to be right in the end.

References:

ASIC (2016) Constitution and replaceable rules. [Online]. Available at: (Accessed: 20 October 2016).

Bottomley, S. (2016) The Constitutional Corporation: Rethinking Corporate Governance.UK: Routledge.

Mitchell, R., O'Donnell, A., Marshall, S., and Ramsay, I. (2016) Law, Corporate Governance and Partnerships at Work: A Study of Australian Regulatory Style and Business Practice. UK: Routledge.

Morrison, D. and Anderson, C. (2015) Is corporate rescue a realistic ideal? Business as usual in Australia and the United Kingdom. Nottingham Insolvency and Business Law e-Journal, 2015(3), pp. 417-435.

NSW Department of primary Industry (2016) Scallops - research information sheet. [Online]. Available at: (Accessed: 20 October 2016).

Puig, G. (2000) A two-edged sword: Salomon and the Separate Legal Entity Doctrine. Murdoch University Electronic Journal of Law, 7(3).

ALRC (2016) Insurance in Australia. [Online]. Available at: (Accessed: 20 October 2016).

Insurance law (2016) Insurance law service. [Online]. Available at: (Accessed: 20 October 2016).

Maurice Black Burn (2016) Insurance claim lawyers. [Online]. Available at: (Accessed: 20 October 2016).

Legislation (2016) Corporation Act 2001. [Online]. Available at: (Accessed: 20 October 2016).

Austlii (2016) Corporations law. [Online]. Available at: (Accessed: 20 October 2016).

ASIC (2016) Your company and the law. [Online]. Available at: (Accessed: 20 October 2016).

Unimelb (2016) Key documents in history of Australian corporation law. [Online]. Available at: (Accessed: 20 October 2016).

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