Corporations Law
1.0 Areas of law
Corporate social responsibility (CSR) has long been a touchy issue for governments not just in Australia, but around the world as well. Companies in Australia are governed by the corporation’s act, which outlines the legal capacity and power of a company. The Corporations Act 2001 (Cth) s 57A1, defines a corporation as a separate legal entity, that includes any corporate body and unincorporated bodies that may sue, be sued or hold property in the name of an office holder appointed for that purpose. In context of corporate governance, the main issue is with the current legislation is in regards to director’s duties. Under the Corporations Act 2001 (Cth) s1802, directors have a civil obligation to act with due care and diligence, with best interest of the corporation in mind. This civil obligation however, does not extend to certain classes of stakeholders other then shareholders. Modern day companies often have a great impact on society at large, through the various activities they conduct. Given the broad economic, environmental and social impacts they have, it is understandable that a push has been made for director’s duties to extend beyond shareholders, and include stakeholders at large.
The Corporations Act 2001 (Cth) s124, also outlines the legal capacity and powers of a company. S 124(1) states, “ a company has the legal capacity and power of an individual both in and outside this jurisdiction”. A company can also be held primarily3 or secondarily4 accountable for torts and crimes. To think of a corporation as solely an instrument of business, fails to account for social changes, which has taken place over the past century. 5 It is therefore vital that amendments be made to the Corporations Act 2001 (Cth), so as to bring accountability and responsibility of corporations and directors up to date with societal change that has occurred over the past decade.
2.0 Problems associated with the law
The current law governing companies and
Corporate social responsibility (CSR) has long been a touchy issue for governments not just in Australia, but around the world as well. Companies in Australia are governed by the corporation’s act, which outlines the legal capacity and power of a company. The Corporations Act 2001 (Cth) s 57A1, defines a corporation as a separate legal entity, that includes any corporate body and unincorporated bodies that may sue, be sued or hold property in the name of an office holder appointed for that purpose. In context of corporate governance, the main issue is with the current legislation is in regards to director’s duties. Under the Corporations Act 2001 (Cth) s1802, directors have a civil obligation to act with due care and diligence, with best interest of the corporation in mind. This civil obligation however, does not extend to certain classes of stakeholders other then shareholders. Modern day companies often have a great impact on society at large, through the various activities they conduct. Given the broad economic, environmental and social impacts they have, it is understandable that a push has been made for director’s duties to extend beyond shareholders, and include stakeholders at large.
The Corporations Act 2001 (Cth) s124, also outlines the legal capacity and powers of a company. S 124(1) states, “ a company has the legal capacity and power of an individual both in and outside this jurisdiction”. A company can also be held primarily3 or secondarily4 accountable for torts and crimes. To think of a corporation as solely an instrument of business, fails to account for social changes, which has taken place over the past century. 5 It is therefore vital that amendments be made to the Corporations Act 2001 (Cth), so as to bring accountability and responsibility of corporations and directors up to date with societal change that has occurred over the past decade.
2.0 Problems associated with the law
The current law governing companies and