Australian Company Law: Fostering or Hindering Corporate Growth?

This report provides a comprehensive analysis of Australian company law and its influence on corporate activities. It examines how the law, particularly the Corporations Act, either promotes or constrains corporate growth and ethical compliance. The report discusses the importance of registration for foreign companies, the stringent nature of the laws, and their modernization to meet dynamic business requirements. It also highlights the role of the law in facilitating the financial system, promoting investor confidence, and administering laws effectively. The report further emphasizes the need for improvements in areas like statutory derivative action procedures, auditor duties, and actions against corporate misconduct, concluding that well-formulated company law is crucial for fostering ethical business practices and continuous growth within the Australian corporate environment. The report references various books and journals to support the analysis.

Company Law

TABLE OF CONTENTS
Question 5: Australian company law constraining or promoting corporate activity.......................1
REFERENCES................................................................................................................................4

QUESTION 5: AUSTRALIAN COMPANY LAW CONSTRAINING OR
PROMOTING CORPORATE ACTIVITY
The companies functioning in Australia have always been able toget a back from
corporate law that has been functioning in the country. It is due to the reason that it has always
promoted improvements and adjustments in statutes and provisions as per the changing business
environments. The report will make comprehensive discussion regarding various laws that act as
a barrierin fostering growth in company and other aspects that are directly orindirectly related to
its growth.
Australian company law discusses the provision that is frequently traced in the form of
legislations with respect to the organizations that are being established in the territory. If any
company plans to function in Australia or have a branch office in the territory, belonging to some
other country, in this scenario, it must be registered as a foreign company under Corporation Act
of Australia (Hanrahan, Ramsay and Stapledon, 2013). It acts as a public record and registration
of company’s presence in the Australian territory. Since, allthe legislations regarding business
activities are discussed in this law, it can be stated that, it helps in appropriate promotion of the
organization in such a manner that no misleading activity takes place in the nation. Hence, it
helps to promote ethical compliance of the business.
The laws being established in relation to functioning of the organizations arequite
stringent, however, it has only fostered growth of corporate activities in the territory in a well-
defined manner. The authorities have also been able to achieve adequate amount of success in
practicing this law in a manner that the legislations and statutes included in it are modernised and
improvised as per the dynamic requirements of society and existing culture of conducting
business activity.It has distinctive feature of arrangement of governance from that usual Anglo-
American model due to which it is able to share various common features with the other
countries as well. In order to ensure effective compliance of law, the mostimportant determinants
that are required to be considered by authorities arebackground business culture, ethical values
and application of legal institutions against the corporate law operations (Muchlinski, 2012).
Theorists have been able to prove that the provisions and statutes in Corporation law have been
able tofulfil most of the elements that a contemporary theoristwould have ever seen in
desirablemodern body of company law.
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However, an overall increase in globalization and contraction of the role of state in
economic market hasadequately altered the nature of modernity in law that requiresadequate
changes to be applied in Corporation law as well. Due to this reason, it constantly generates the
requirements of alterations, modifications and adjustments as per the changing legal as well as
economical circumstances. Most recently, the authorities have involved in simplifying
administration of Australian law and reduced using litigation as a means of enforcement in its
body of law. Adequate emphasis has been put on specific areas of takeovers and voluntary
administration of insolvent companies (Esposito, 2012).
Main aim of company law of Australia is to facilitate and improve the performance of
financial system. It also helps in promoting confident and informed participation of investors and
consumers in the system. Corporate law of Australia also plays an important role in
administration of laws in an effective and efficient manner.It also plays an important role in
collecting and storing relevant information abut companies that are functioning in the territories
whether it belongs to Australia or not. The authorities also involve in putting constant efforts to
improve its mechanism in such a manner that all the defaults being present in the room of
provisions can be assessed and corrective actions for the same can be undertaken. Hence, it is
now important for authorities to give an introduction to statutory derivative action procedures
and impose liabilities on directors in the same manner for the debts of organization, in case of
insolvent trading aspect. It is also important that the duties that have been mentioned regarding
auditors must be enhanced that can help in reducingnumber of companies that may collapsedue
to their ineffective presentation of financial statements (Tricker and Tricker, 2015).
It has alsobecome important for the corporationlaw to take actions against limited
regulatory resources as well whose main role is to monitor corporate misconduct and bring them
into legal actions who breaches the law. However, there isincreasing range of financial and
custodial punishments that are given to the corporations involved in breaching law. Introduction
of new measures in the form of infringement notice with respect to civil penalty order
procedure.It can be stated that overall improvements and preparation of stringent laws in the
corporate functions can help in reducing unethical practices in environment where business
judgement can be taken by team in a well-defined manner (Lindorff, Jonson and McGuire,
2012). It can prove to be effective for both; the law makers and law seekers.
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Adequate amount of changeshas been experienced in law in the years based on the
changing circumstances and conditions of corporate culturein the country. It helps in reducing
misconduct that isrelated to organizations functioning in Australia. Italso helps in bringing minor
breaches to regulatory attention. It can help in improving the overall civil and administrative
functions of law (The challenge of corporate law enforcement: future directions for
corporation’s law in Australia, 2016).
From the above report, it can be concluded that company law that is functioning in
Australia have been prepared to foster growth in business activities. It helps in ensuring that all
the business functions are ethically conducted by all the corporations functioning within the
territory of Australia. The report also outlined that there are various aspects where changes are
requiredto be made as it can act as a barrier to organizations to promote growth due toineffective
formulation of laws. Bringing changes in the same can be helpful in continuous fostering of
growth in business activities of Australian corporations.
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REFERENCES
Books and Journals
Esposito, R. T., 2012. The social enterprise revolution in corporate law: A primer on emerging
corporate entities in Europe and the United States and the case for the benefit
corporation. Wm. & Mary Bus. L. Rev.. 4. p.639.
Hanrahan, P. F., Ramsay, I. and Stapledon, G. P., 2013. Commercial applications of company
law.
Lindorff, M., Jonson, E. P. and McGuire, L., 2012. Strategic corporate social responsibility in
controversial industry sectors: The social value of harm minimisation. Journal of
Business Ethics. 110(4). pp.457-467.
Muchlinski, P., 2012. Implementing the new UN corporate human rights framework:
Implications for corporate law, governance, and regulation. Business Ethics
Quarterly. 22(1). pp.145-177.
Tricker, R. B. and Tricker, R. I., 2015. Corporate governance: Principles, policies, and
practices. Oxford University Press, USA.
Online
The challenge of corporate law enforcement: future directions for corporation’s law in
Australia.2016. [Online]. Available through:
<http://classic.austlii.edu.au/au/journals/UWSLawRw/2006/1.html>.
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