Small Technology Business

Alexander, Marika and Jeremy (who have been friends since they were all at university together) decide to set up a small technology business. Alexander is an experienced computer programmer, Marika is a lawyer and Jeremy is an accountant. Alexander, Marika and Jeremy decide that Alexander will look after the technological aspects of the business, while Marika and Jeremy attend to all contractual and commercial arrangements. They also decide that they will incorporate a company through which they will run the business, which they intend to call Silver Bullet Pty Ltd ("Silver Bullet"). Each of them will be a director and be issued two shares. They agree that because the business is small there will be no need to have a managing director.

Jeremy decides that Silver Bullet will need suitable business premises. He finds a property in Rozelle which he thinks is ideal. The landlord, Olaf, warns him that there are several people interested in leasing the property. Olaf tells Jeremy that if he wants to lease the property, he will need to get the lease signed that day. Jeremy cannot get into contact with Marika or Alexander, so he puts Silver Bullet's name as the tenant on a three year lease for $2,000 rent per month (even though the company has not yet been formed) and then executes the lease by signing his own name as a director of Silver Bullet. Jeremy gives Olaf a cash payment of $2,000 for the first months' rent (asking for a receipt in the name of Silver Bullet). The lease provides that the next rental payment is due in a month.

The next day, Jeremy and Marika get around to submitting the relevant incorporation documents to ASIC. They find out that the name "Silver Bullet Pty Ltd" is already taken, so they decide instead to call the company Lead Balloon Pty Ltd ("Lead Balloon"). The board and shareholding arrangements are as originally planned. Lead Balloon is incorporated using the replaceable rules as its constitution, but with an additional clause which provides that unanimous board approval is required for entry into any contract involving expenditure of $10,000 or more. ASIC sends the certificate of registration the next day. Lead Balloon's ACN is 989 712 452.