What is a Company?
By SmallStocks on Jul 31, 2008 in Uncategorized
In Australia, all companies are regulated by the Corporations Act 2001. There have been many previous derivations of this legislation but this is the most recent and therefore worth discussion. Before undertaking any investment on the share market it is important to understand a company’s fundamental structure so that you understanding where exactly your money is going.
A company is effectively an artificial individual recognized by the law as a legal person with its own rights and liabilities. It is regarded as totally distinct and separate from its owners – whether they are shareholders or members – and from its management, whom include its directors and officers. There are two main different types of companies, public and private which are summarized below with appropriate Corporations Legislation 2001 sections. It is not important whether you understand all of the legislation below – but as long as you can see the main differences between the two different sorts of companies, then you are doing well.
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