Corporations law tutoring

Make Corporations Law click.

Corporations Law involves a large volume of statute, and that is where many students struggle. Strong answers connect each argument to a section of the Corporations Act and apply it to the facts. The method is what makes the volume workable in an exam.

Browse all subjects New · Practice bank: 100 exam style drills across every Corporations Law topic plus 20 integrated exam scenarios, each with Pass and H1 model answers and examiner's comments. →
10 flowcharts100 drills20 exam scenarios10 module guides
Module flowchartsPractice bank

The subject, module by module

Study Corporations Law one module at a time

Each module has a one page guide, a decision flowchart and a drill bank with Pass and H1 model answers and examiner's comments.

1Separate legal personality and the veil
Salomon, the recognised categories and the statutory routesGuide · Flowchart · Drills (8)
2Internal governance, division of power and meetings
The constitution, replaceable rules and members in general meetingGuide · Flowchart · Drills (9)
3Corporate contracting, authority and assumptions
Actual and apparent authority and the statutory assumptionsGuide · Flowchart · Drills (10)
4Duties framework and characterisation
Directors, officers and who each duty bindsGuide · Flowchart · Drills (10)
5Good faith and proper purpose
The two limbs and how purpose is testedGuide · Flowchart · Drills (10)
6Care, diligence and the business judgment rule
The standard of care and the s 180(2) defenceGuide · Flowchart · Drills (10)
7Insolvent trading
The elements, the defences and the compensation pathwayGuide · Flowchart · Drills (12)
8Conflicts, profits and related party benefits
Disclosure, Chapter 2E and the general law overlayGuide · Flowchart · Drills (12)
9Shareholder actions and remedies
Oppression, the derivative action and winding upGuide · Flowchart · Drills (12)
10Share capital transactions
Reductions, buy backs and financial assistanceGuide · Flowchart · Drills (7)
★Exam tier: 20 scenarios in the format of the real papers, 700 marks in totalExam tier

How to use this subject

1 · Read the guide. Each module has a one page guide with the rules, the cases and a dissected worked example.
2 · Plan on the flowchart. Each module has a decision flowchart. Plan the answer on the chart before writing a word.
3 · Drill the bank. Write your answer, then compare it against the Pass and H1 models and the examiner's comments. The method behind all of it is at six shapes and one twist.

The challenge

Where students get stuck

The doctrines are not conceptually difficult, but they require precision. The topics include separate legal personality and the corporate veil, the directors' duties in sections 180 to 184 covering care and diligence, good faith, proper purpose and conflicts, and members' remedies, including the statutory derivative action and oppression under section 232. Marks are lost by citing the wrong section, omitting an element, or treating the duties as interchangeable when each has its own test.

How I help

We anchor each issue to a section: identify the provision, state the test, apply each element to the facts, then conclude. The directors' duties are strict statutory tests, and we practise applying each one and keeping the general law and statutory duties distinct. We cover the leading cases and work through past problems so the answer stays tied to the Act and clear to follow.

The method in action

See the four steps applied to a real Corporations Law problem

A worked H1 answer against a Pass answer, dissected line by line, with one to try yourself. Tap to open.

The method in action

One method, every problem

A reliable answer under exam pressure comes from a fixed routine, not from inspiration. The same four steps run every argument. A small set of rule shapes tells each argument what it has to do. Below is the routine, then a worked problem that puts it to work. The method is the same for any problem.

The four steps, every time

The precise thing you have to decide. Name it before you state any law, so the marker knows what each paragraph is for.
The principle that decides the issue. It always comes from a section or a case, and every rule is tied to its authority.
Run the facts through the rule, point by point. Do not describe the facts on their own.
Answer the issue, stated only as firmly as the facts allow. Finish one issue before the next begins.

Know the shape of the rule

What it means

A rule that is a single statement with no working parts. It either covers the facts or it does not.

What it makes you do

State it and apply it in a sentence or two. Then move on. Do not build machinery the rule does not have.

What it means

Several requirements and every one must be met. One unticked box and the whole rule fails, however strong the rest of the page looks.

What it makes you do

Run every item in turn. Then give the quiet item the closest look. This is because strength on three items cannot repair a fourth.

What it means

One ring holding several keys. The rule is satisfied if any one key turns the lock. Every key opens the same door.

What it makes you do

Claiming? Turn your best key and mention the spares. Defending? You must strip every key off the ring. This is because ruling out one key proves nothing about the others.

What it means

Steps applied in a fixed order, where each step conditions the next. The order is part of the law. Step two does not exist until you have stood on step one.

What it makes you do

Take the stairs in order and show at each step why the next is reached. Where a step is arguable, conclude it and bridge with an if. If the direction is made out, did the board act on it?

What it means

One standard read through several factors. No single factor decides and none is required. A factor can be missing without changing where the needle settles.

What it makes you do

Argue several factors and argue them both ways. Then read the needle. In law the facts are the magnet. The needle settles differently in every case. Ignore the factors the facts never engage, because raising a dead factor wastes time and can cost marks.

What it means

Two competing interests weighed against each other. The conclusion is wherever the scales come to rest.

What it makes you do

Weigh like a shopkeeper. Start with the heaviest weight on each side and move to and fro, answering each point with the other side's best. Fine tune last and stop at close enough. The scales never sit perfectly level. State the balance only as firmly as they show.

What it means

Not a seventh shape. A fold that any shape can carry. The rule applies unless a defined exception is made out. Sometimes it holds as a default until it is displaced.

What it makes you do

State the rule first and give it its authority. Then test only the exceptions the facts make live, each on its own requirements. And always ask who must untwist it. This is because the party relying on the exception usually carries that burden. Planted material that merely looks bad is often legally insufficient to displace the default.

See the six shapes and one twist →

Worked example

The factsNadia runs a courier business through QuickCo Pty Ltd, of which she is the sole director and shareholder. She sets up a second company, HoldCo, to own the delivery vans, which HoldCo then leases to QuickCo. A QuickCo driver negligently injures a pedestrian. QuickCo "has no assets" and is wound up. The injured pedestrian argues that Nadia and HoldCo should be liable, because QuickCo was "just Nadia in another form" and was "deliberately kept asset poor".
The full answer

The pedestrian wants to reach Nadia or HoldCo. Each step is taken in turn.

Is QuickCo's liability separate from Nadia and HoldCo?

A company is a separate legal person, and its members and directors are not liable for its debts (Salomon v Salomon). QuickCo's liability is QuickCo's own. Incorporation exists so the people behind a company are not personally liable. On the general rule, neither Nadia nor HoldCo is liable.

Does keeping QuickCo "asset poor" justify piercing the veil?

The veil is pierced only for a sham or facade, or where a company is used to evade an existing obligation (Gilford Motor v Horne). Mere undercapitalisation or a group structure is not enough (Briggs v James Hardie). QuickCo was "deliberately kept asset poor", but that is lawful structuring. The "just Nadia in another form" point is really a complaint about sole ownership, which Salomon permits.

Is HoldCo liable for the driver's negligence?

A separate company is liable for the driver's negligence only if it was the employer or QuickCo was its agent (Salomon v Salomon). Nothing on the facts shows either. Liability follows the entity that employed the driver. That was QuickCo.

What is the result?

QuickCo alone is liable, and it has no assets. The veil is unlikely to be pierced. This is because a group structure that keeps one company asset poor is lawful, and falls short of a sham.

Now the same answer, dissected step by step.

The pedestrian wants to reach Nadia or HoldCo. Each step is taken in turn.

Sets out the issues and the order they are taken.

General rule

Is QuickCo's liability separate from Nadia and HoldCo?

A company is a separate legal person, and its members and directors are not liable for its debts (Salomon v Salomon). QuickCo's liability is QuickCo's own. Incorporation exists so the people behind a company are not personally liable. On the general rule, neither Nadia nor HoldCo is liable.

States Salomon and applies it before reaching for exceptions.

Narrow exceptions

Does keeping QuickCo "asset poor" justify piercing the veil?

The veil is pierced only for a sham or facade, or where a company is used to evade an existing obligation (Gilford Motor v Horne). Mere undercapitalisation or a group structure is not enough (Briggs v James Hardie). QuickCo was "deliberately kept asset poor", but that is lawful structuring. The "just Nadia in another form" point is really a complaint about sole ownership, which Salomon permits.

Tests the actual exceptions against the facts rather than arguing fairness.

Checklist

Is HoldCo liable for the driver's negligence?

A separate company is liable for the driver's negligence only if it was the employer or QuickCo was its agent (Salomon v Salomon). Nothing on the facts shows either. Liability follows the entity that employed the driver. That was QuickCo.

Disposes of HoldCo on employment and agency.

What is the result?

QuickCo alone is liable, and it has no assets. The veil is unlikely to be pierced. This is because a group structure that keeps one company asset poor is lawful, and falls short of a sham.

Concludes on the general rule and why the exceptions fail.

The full answer

QuickCo is a separate company, so normally Nadia is not liable because of Salomon's case. But she set it up to have no assets and kept all the money in HoldCo, which is unfair to the pedestrian. The court can lift the corporate veil when a company is used to avoid liability, so Nadia and HoldCo should be liable. The pedestrian wins.

This is a pass-level answer. Click each line to see where the marks are lost.

QuickCo is a separate company, so normally Nadia is not liable (Salomon).
States Salomon correctly, then abandons it for a fairness argument.
She kept all the money in HoldCo, which is unfair to the pedestrian.
Treats "kept asset poor" as automatically wrong, missing that undercapitalisation and group structuring are lawful (Walker v Wimborne).
The court can lift the veil when a company is used to avoid liability.
Asserts a broad exception without confining it to a sham or the evasion of an existing obligation (Gilford Motor; Jones v Lipman).
So Nadia and HoldCo should be liable.
Makes HoldCo liable with no basis such as agency or employment.

Spending your time under pressure

Read & plan8 min
Separate personality11 min
Piercing the veil11 min
HoldCo11 min
Review5 min

A workable time split for a 45 minute problem. Adjust it to suit your exam.

Now try one

Your problemTom is the sole director and shareholder of BuildCo, which owes a supplier "$200,000". Before the debt falls due, Tom forms NewCo, transfers BuildCo's business and contracts to NewCo "for almost nothing", and lets BuildCo collapse. The supplier wants to reach NewCo and Tom.

Work it yourself using IRAC. Fill in each step, then submit to self-check and reveal the model answer. This is a quick check for the essentials. Rubric self-marking is coming this semester.

Model answer

Issue. Whether the supplier can reach NewCo or Tom for BuildCo's debt.

Rule. A company is a separate legal person (Salomon v Salomon). The veil is pierced for a sham or to evade an existing obligation (Gilford Motor v Horne).

Application. The debt is BuildCo's. But Tom transferred the business to NewCo "for almost nothing" to defeat an existing debt. That looks like evading an existing obligation, not ordinary structuring.

Conclusion. The veil may be pierced here. This is because the transfer was made to evade an existing obligation, so the supplier may reach NewCo.

Common questions

Corporations Law tutoring FAQ

Do you cover duties and members' remedies?

Yes. The statutory and general law duties, the corporate veil, the derivative action and oppression.

There is so much statute. How do I structure it?

Anchor every argument to the section. Prove each element on the facts. The method is built for it.

Can you help before the exam?

Yes. Focused problem practice. Book early.

Related subjects: Contracts, Equity & Trusts, Remedies. See all subjects, or read the publication on practice hypotheticals.

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