Companies
Limited Liability
•	The shareholders of a company have limited liability for the debts and liabilities of the company
•	Directors and shareholders are not personally liable for the debts or actions of the company (Salomon v A Salomon & Co Ltd)
Capacity
•	A company has full legal capacity and can do all things a natural person can such as buy and sell property, enter contracts, sue and be sued
•	It can also issue shares and debentures:
•	see s.124 Corporations Act
Agency
•	As a company is an artificial entity it must act through its human agents: directors, employees, and authorised agents
•	For a company to be bound, two director signatures or a director and a company secretary signature (can be same person if a one director Pty company) are required on the contract (s.127 Corporations Act)
•	Alternatively, a company can be bound where the contract is entered into by an authorised agent on behalf of the company (s.126 Corporations Act)
•	A company can confer three types of authority on an agent:
o	Actual express authority
o	Actual implied authority
o	Ostensible authority:
(refer to Agency for more information)
Governance
•	Companies may be governed internally by following a set of rules called the replaceable rules
•	Alternatively, companies may create and follow their own internal governance rules by adopting their own Constitution
•	see s.134 Corporations Act
Public v Proprietary Companies
•	For companies increased participation in financial markets such as issuing shares to the public or listing on the Australian Securities Exchange requires increased submission to government oversight and surveillance 
•	Companies may be either proprietary or public
•	A proprietary company is a privately held company restricted in what it can and cannot do
•	A public company is a publicly owned company with fewer restrictions but greater oversight and surveillance
A proprietary company (s.113 Corporations Act):
o	May have as few as one director
o	Cannot have more than 50 non-employee shareholders
o	Cannot issue shares or securities to the public, raise funds from the public or list on the Australian Securities Exchange:
•	Public Company
o	Must have a minimum of three directors
o	Can have an unlimited number of shareholders
o	Can issue shares and securities to the public, raise funds from the public and list on the Australian Securities Exchange
Statutory Assumptions
•	Although assumptions may be incorrect they can provide a starting position where independent enquiry is not practical or possible
•	Third parties contracting with companies can make certain assumptions regarding company conduct and the authority of company agents
•	Third parties contracting with companies can assume that:
o	The company’s internal governance rules are being complied with (s.129(1) Corporations Act)
o	A director appearing in ASIC records has been duly appointed and has the usual powers of a director in that kind of company (s.129(2) Corporations Act)
o	Anyone held out by the company as an officer or agent has been duly appointed and has the usual powers of an officer or agent in that kind of company (s.129(3) Corporations Act)
o	The officers and agents of the company properly perform their duties to the company (s.129(4) Corporations Act)
•	However, third parties contracting with companies are not entitled to make these assumptions if they know they are not true (s.128(4) Corporations Act)