Essay On Business Law

 

There has been the achievement of a lot of progress in connection to modernization of the Australian legal statutes relating to the business corporations over the course of the past half century. However, in spite of few inspiring and remarkable progressions and advancements, there has been a lot less achievement in relation to the enforcement or implementation of the laws relating to business corporations in the nation of Australia. When one is in quest of speculating and venturing about the future, it shall always be necessary to observe the past and former instances because the seeds or grains of the future progress and development can usually be discovered in the past conducts. Up to a certain degree, this can be said to be an expression or a terminology of the supposed or alleged ‘path reliance’ argument that has been exemplified by the distinguishing features of the legal system of every nation. The ‘Australian Securities and Investments Commission’ (also known as ASIC), being in the role of the ‘markets, corporate and financial services regulator’ of the nation of Australia, plays a chief role in the maintenance of the integrity or veracity of the Australian market as well as the well-being of the economy of the nation of Australian economy. Therefore, it can be said that it is of greatest significance that ASIC is actually directed or steered in an appropriate manner so that the ASIC can be facilitated into properly discharging its regulatory roles or functions (Bottomley 2020). This essay shall forward a discussion in connection to the challenges that are faced in case of the enforcement or implementation of the corporate laws in the nation of Australia, which can be considered as a contemporary issue relating to the corporate law.

 

 

At the same time as the nation of Australia evidently does possess its distinguishing corporate law characteristics that separate its governance plannings, arrangements and measures from the typical Anglo-American processes, the Australian nation also possess a huge number of shared or mutual features that it has in common with the other developed nations. Possibly, the most vital or significant of such features can be said to be the ethical values, the circumstantial business culture, and the legal institutes or organizations in connection to which the corporate laws function. Such features can be said to be the most significant elements in confirming the enforcement as well as the effectiveness of such regulations and laws. The laws relating to the business corporations in the nation of Australia encompass most of the rudiments that have been perceived by the modern legal theorists as being necessary in a contemporary body and structure of the company law. However, with the augmenting globalization as well as the reduction of the function of the nation (or government) in the economic markets, the function of the law as well as the nature of newness or modernism have altered substantially ever since the enactment and sanction of the initial largely constructed company laws and regulations of the mid-19th century (Gindis, Veldman and Willmott 2020).

 

As a consequence, the contemporary company regulations and laws have been modified, and shall be modified as well as adjusted furthermore in order to suit the altering legal and economic situations. In the nation of Australia, over the course of the past half century, the modernization, upgrading and transformation of the company law has shifted from the progression or development of more consistent and more uniform entities of the legislation all over the states of the Australian nation, ensued or trailed by the route of an all-inclusive general Corporations Act (Cth) in the year of 2001. As opposed to the nation of United States, the Australian nation has not perceived much indication of competition amongst the states of the Australian nation for the company incorporations, thereby resulting in dramatic variances in the content or form of the corporate law statutes of the states. However, it should be noted that the States have made an attempt to safeguard their own company registration returns by establishing favorable and advantageous agreements/accords with the central government as a specific condition to refer the state incorporation authorities to the central government. One can be said to have also perceived the shifts to simplify as well as reorganize or update the content of the entity of the company law, and also to cause a reduction of the economic load of such regulations and laws upon the medium and small sized businesses (Nordberg 2020).

 

Numerous theoretical models are present in relation to the literature concerning the regulation of the corporate laws in the nation of Australia. One such specific model can be said to have been forwarded by the strategic regulation theory, which actually reinforced the fundamental reforms that were made in the year of 1993 to the administration and command of the sanctions for the purposes of the implementation of the statutory responsibilities of the corporate officials in the nation of Australia during the time when the civil penalty administration and command had been introduced. Through the adoption of this particular approach or method, which identifies and acknowledges that it shall not be possible for any specific regulatory body to notice as well as impose every infringement of the particular law that it regulates, and which also causes a reduction in the dependance upon the criminal law, it had been expected that the ASIC could regulate the corporate misconduct in a lot more effective manner (Lai and Stacchezzini 2021). The strategic regulation theory can be said to be an economic theory relating to regulation, which delivers a macro-outlook or a macro-viewpoint in relation to the function of the enforcement sanctions in realizing and attaining the regulatory compliance or acquiescence. It promotes and endorses that the regulatory adherence shall be possible to secure in the most effective manner with the help of persuasion, instead of legal enforcement, as the legal proceedings can be said to be expensive, while cooperation amidst the regulated and the regulator can be said to be cheap. Generally, the strategic regulation theory can be said to be graphically represented with the help of the ‘pyramidal enforcement model’. The fundamental strategic notion of any pyramid of implementation or enforcement had been developed and forwarded by Braithwaite. It had been argued by Braithwaite that compliance or adherence is mostly expected when any regulatory agency demonstrates any kind of explicit enforcement pyramid. The specific pyramid model mandates the concerned regulator to be equipped with an extensive assortment of sanctions that intensify in strictness from persuasion and education at the base, through the numerous other steps to the criminal sanctions as well as incapacitation at the peak or top of the specific pyramid for the constant non-compliance or for grave violations of the law. The particular regulator must shift from one stage to another, starting at the lowermost stage in most of the cases (Braithwaite et. al. 2019).

 

Very recently, it has been observed that the efforts for simplifying the administration or regulation of the company law of the Australian nation and for causing a reduction in the utilization of litigation as a method of enforcing such entity of law, particularly in the fields like voluntary administration as well as takeovers of the insolvent business corporations. Section 659AA, as provided in the Corporations Act (Cth) of 2001, mentions that the Takeover Panel (and certainly not the courts) should be the chief forum for giving effect to the resolution of the disputes concerning any takeover bid in the nation of Australia. This particular reform actually pursues to overcome the disproportionate utilization of the courts in the takeover disputes in the nation of Australia that has transpired in the past 2 decades (Loosemore et. al. 2018). In the light of such matter, it must be noted that while the corporate regulation in the Australian nation has perceived the particular corporate regulator (Australian Securities and Investments Commission) taking any specific action for enforcing and giving effect to the specific laws of Commonwealth, which confer powers and functions upon it, this can be regarded as one of the extensive functional zones that the Commission is required to poise and balance (with its inadequate possessions and resources) with the other wider functions (Fordham and Robinson 2018).

 

The utilization of the civil as well as the administrative remedies instead of the criminal penalties in relation to the violation of the corporate law has more and more gained favor and support in the nation of Australia. Concurrently and parallelly, efforts have also been perceived to cause a reduction in the burdens of the ones who all are actually affected by the new legal responsibilities and processes by the enactment or sanction of a huge quantum of exceptions as well as defenses that are aimed at providing protection in respect of the officers and directors, like the way of the laws relating to business judgement with the objective of providing a ‘safe harbour’ in respect of the officers who are believed to have conducted themselves in a reasonable manner when giving effect to any specific decision (Landau and Marshall 2018). However, in a milieu of restricted regulatory resources for monitoring the corporate misconduct as well as for bringing legal action against the ones who cause a violation of the law, the issue relating to the implementation as well as enforcement of the Corporations Act of the Australian nation has become progressively vital. It is essentially one thing to possess a comprehensive and an elegant company law act or entity of official law, it is an entirely another thing to confirm and guarantee that such law is actually enforced in an effective manner. This can be said to be a theme that can be regarded as vital in the developed nations like Australia, and also in several other developing Asian nations, like China (Chen 2019).

 

The history concerning corporate collapse as well as associated misconduct in the nation of Australia can be said to be extensive. Such collapses or downfalls have usually resulted in the formation of the commissions of inquiry. Such commissions have often endorsed and suggested reforms for the improvement of the enforcement or implementation of the securities and corporate laws in the nation of Australia. Such reports have commended that attention should be given to the fundamental causes relating to corporate collapse, however, the government has seldom tackled such causes in an effective manner. In the year of 1990, the Australian corporate regulator organized and gave effect to a “hit list” of sixteen high profile and distinguished corporate cases that had been perceived as the “priority” areas of concern on the basis of the corporate collapses that transpired in the 1980s. Regrettably, it was not possible to bring successful and efficacious criminal cases against every such matter. This eventually emphasized the necessity for more quick enforcement strategies or policies because it was evident that the effective criminal prosecutions were problematic. It shall be valuable to pursue to examine as to whether the academic theory relating to the corporate social control could be beneficial regarding the matter. For instance, while not explicitly concerned with the procedural corporation law violations, Professor John Braithwaite as well as his numerous colleagues and students have written papers about strategic corporate regulation and corporate crime. These works have been persuasive a significant in affecting the manner in which few business regulatory bodies, like the Australian Taxation office and the Australian Trade Practices Commission, have utilized their restricted resources into dealing with the problems (in a more effective manner) of the corporate law adherence or compliance (Christ and Burritt 2018).

 

Regarding the mater, this pyramid relating to the regulatory enforcement can be said to have been a powerful and persuasive model. this particular model has been utilized by numerous business regulators. At the base of the particular pyramid, there is the utilization of less costly, less punitive as well as less intrusive compliance approaches (like the voluntary compliance as well as persuasion). When one ascends to the peak or top of the particular pyramid, such compliance methods or approaches become more and more intrusive, costly and punitive. In accordance to this particular approach or method, one actually goes up the pyramid with the help of more severe and complex measures like the warning letters in relation to the civil penalties, resulting in a lot more stigmatizing and costly measures like the utilization of the criminal penalties as well as to license suspension and finally to license imprisonment and revocation (Hardy 2021).

 

As per the punishment-based regulatory method or approach, the specific nature of the sanctions gradually intensifies with the criminal authorization of incarceration being utilized in the form of a last resort. This particular regulatory model has actually been defined as the ‘strategic regulation theory’. This particular theory was stated and denoted favorably in 2 reports of the Australian parliament that have wanted to establish the fundamentals for the fresh new provision relating to corporation law concerning the misconduct by the directors, with an advanced variety of sanctions being favored as the means and methods of dealing with the offences relating to corporate law. This particular regulatory pyramid might also be perceived in terms of the fundamental regulatory assumptions that can be equated with the new emphasis upon the risk assessment that has more and more guided the method or approach to the enforcement or implementation that has been adopted by the regulatory agencies (Nieto Martín 2022). However, in the recent times, the courts of the Australian nation have struggled with the inferences and insinuations of the strategic regulatory theory as replicated in the particular regulatory pyramid. Such issue has ascended in the milieu of the legislature in quest of creating the enforcement techniques that undertake a clear difference amidst the criminal and the civil actions (Matthews et. al. 2019). This has actually ascended in the milieu of the cases regarding the civil penalty administration, which is presently found in Part 9.4B as provided in the Corporations Act of the Australian nation. Prior to the decision that was forwarded by the Australian High Court in the case of Rich & Anor v Australian Securities and Investments Commission (2004) 220 CLR 129, it had been argued by the Commission that the proceedings like the ones encompassing the disqualification of the directors had been ‘protective’ of the particular community and certainly not ‘punitive’ in the nature. However, such distinction had been rejected by the High Court and it was noted by the High Court that, similar to the civil-criminal difference, the difference amidst the protective and the punitive proceedings had been unstable and indefinable. In the instance of the impacts of any disqualification order in connection to a director, such measures had been punitive as well as protective (Kashyap et. al. 2019).

 

To conclude, it can be said that even though there has been the achievement of a lot of progress in connection to modernization of the Australian legal statutes relating to the business corporations over the course of the past half century, there has been a lot less achievement in relation to the enforcement or implementation of the laws relating to business corporations in the nation of Australia. This essay has forwarded a discussion in connection to the challenges that are faced in case of the enforcement or implementation of the corporate laws in the nation of Australia, which can be considered as a contemporary issue relating to the corporate law.

 

Bottomley, S., 2020. Corporate law, complexity and cartography. Complexity and Cartography (July 2020), 35(2).

 

 

Chen, V., 2019. Enforcement of directors’ duties in Malaysia and Australia: the implications of context. Oxford University Commonwealth Law Journal, 19(1), pp.91-117.

 

 

Christ, K.L. and Burritt, R.L., 2018. Current perceptions on the problem of modern slavery in business. Business Strategy & Development, 1(2), pp.103-114.

 

 

Fordham, A.E. and Robinson, G.M., 2018. Mapping meanings of corporate social responsibility–an Australian case study. International Journal of Corporate Social Responsibility, 3(1), pp.1-20.

 

 

Gindis, D., Veldman, J. and Willmott, H., 2020. Convergent and divergent trajectories of corporate governance. Competition & Change, 24(5), pp.399-407.

 

 

Hardy, T., 2021. Digging Into Deterrence: An Examination of Deterrence-Based Theories and Evidence in Employment Standards Enforcement. International Journal of Comparative Labour Law and Industrial Relations, 37(2/3).

 

 

Kashyap, A.K., Jaswani, U., Bhandari, A. and Dixit, Y.S., 2019. An Introduction to Corporate Insolvency Law and Reforms in Australia. In Corporate Insolvency Law and Bankruptcy Reforms in the Global Economy (pp. 107-131). IGI Global.

 

 

Lai, A. and Stacchezzini, R., 2021. Organisational and professional challenges amid the evolution of sustainability reporting: a theoretical framework and an agenda for future research. Meditari Accountancy Research.

 

 

Landau, I. and Marshall, S., 2018. Should Australia be embracing the modern slavery model of regulation?. Federal Law Review, 46(2), pp.313-339.

 

 

Loosemore, M., Lim, B.T.H., Ling, F.Y.Y. and Zeng, H.Y., 2018. A comparison of corporate social responsibility practices in the Singapore, Australia and New Zealand construction industries. Journal of cleaner production, 190, pp.149-159.

 

 

Matthews, L.R., Johnstone, R., Quinlan, M., Rawlings-Way, O. and Bohle, P., 2019. Work fatalities, bereaved families and the enforcement of OHS legislation. Journal of Industrial Relations, 61(5), pp.637-656.

 

 

Nieto Martín, A., 2022. Stakeholders’ Compliance Programs: From Management of Legality to Legitimacy. In Corporate Compliance on a Global Scale (pp. 287-311). Springer, Cham.

 

 

Nordberg, D., 2020. The Problems and Remedies in Corporate Governance. In The Cadbury Code and Recurrent Crisis (pp. 15-27). Palgrave Macmillan, Cham.
Rich & Anor v Australian Securities and Investments Commission (2004) 220 CLR 129.

 

 

Wood, C., Ivec, M., Job, J. and Braithwaite, V., 2019. Applications of reponsive regulatory theory in Australia and overseas.