Common Wealth Governance governs Australian commercial law. In the Corporation Act 2001 (Cth) the law was mainly codified. Common wealth was found to have less authority in company formation in Australia, Section 51 only facilitated foreign companies and provided sufficient authority, the federal government created a new law for companies. The Corporation Act of 2001 is the largest law in the world, it is the law on the governance of common wealth. The main purpose of the law covers corporations but also other entities related to the law such as partnerships and managed investments. This law is adopted by all states. Corporation Act 2001(Cth) is the main legislative body in Australia. He deals with all corporate matters. This law gives many constitutional powers and many other tasks to the director of the company. Violation of duties can land them in trouble and some serious fines ranging from $220,000. In both common law and the Corporation Act 2001, directors will also be obliged to pay compensation (www.apla.com). Types of Companies in Australia Sole trader; It is the simplest type of association. Sole proprietorship does not require certain formalities: only one person can own the property and employ other people in the organization. Business assets and liabilities do not have an existence separate from the owner. In the sole proprietorship the owner does not pay any corporate taxes, but rather the owner pays personal income taxes. In sole proprietorship the owner controls the entire business and does not share the profits with anyone. the only legal requirement for this type of business is to obtain an Australian Business Number (ABN) and in some cases registration for Materials and Services Tax (GST). If the owner does not wish to carry on the business in his own name, the person may only be required to register the name under a valid trading law (state or territory). The owner of the company is responsible for the company's losses. If the business encounters difficulties, the owner's personal property will be sold to pay off all loans. Furthermore, there is no legal process that allows another to take possession. The death of the owner can put an end to the business (woodward et al,2005:18).Partnership; “The relationship that exists between two companies or organizations that operate the business jointly with the objective of earning an income. According to the Partnership Act of 1958, partnership is the collection of individual traders who come together to earn income points.