Sample BUS3004 Corporations Law T1 2023 Essay 1

BUS3004 Corporations Law T1 2023 Essay 1 Sample

Essay

An essay on contemporary issues of corporation law.

Assessment 1 Detail

This is an individual task, and student must complete the task individually. The Topic will be given in week 3 which is like a real-life case which a company may face. Based on multiple legal issues which the company is facing, students must prepare the essay including introduction, body paragraphs, recommendations, conclusions, and references.

Solution

Introduction

The Annual general meeting is supportive of allowing the shareholders to the selection of the board of directors and also for voting on the company issues. For Assignment Help, Most of the large companies in Canada arrange the Annual General Meeting at a specific time of the year, in which the executives and shareholders interact with each other (Aguilera et al, 2021). However, the rules and regulations of the Annual General Meeting vary based on the country's jurisdiction. The Law of Corporation provides the outline of AGM in country Canada for both public and private companies.

The respective essay aims to identify various legal issues that are faced by the company Norda Stelo regarding the Corporation Law and related principles and discuss that in the Annual General meeting. Norda Stelo is an industrial-based company. The company has successfully managed its business in the sector of Construction and Materials for almost sixty years. The headquarters of the company is in Quebec City, Canada (norda.com, 2023).

The essay is not only focusing upon the legal issues in AGM, but it is also going to enlighten various principles of Corporation Law for solving the issues that are facing the respective company in current days. There are appropriate recommendations that will be listed in the essay before concluding the final findings.

Body Paragraph

Identifying the issues and understanding the relevant Corporation laws and principles to the topic
The company is nowadays facing some legal issues, increasing the chances of various lawsuits against the company. That is, it is needed to solve the issues on an urgent basis. The issues are as follows:

Dissatisfied Customer

Customers have the right for filing lawsuits against the company if they face inadequate services and unfulfilled promises. Previous few days the company Norda Stelo was facing some queries and trying to prevent the management team from continuously trying to prevent those from going out of hand for maintaining the company's reputation. As per the view of Poturak and Softic (2019), customers have the power of breaking the reputation of the company. Most importantly one disappointed customer can gather a group of customers against the company and grab the media attention. Other competitors of Norda Stelo can benefit from all of this. Various mechanisms are already adopted by the company like assisting customers through calls and emails for keeping the business in touch with the customer and for providing time-to-time solutions.

Copyrights and Patent

Copyright and patent are other issues due to the digitalization and introduction of new technologies within the company (Komljenovic, 2022). The company research and development department is still struggling to appropriately manage the respective rights for avoiding potential lawsuits of infringement as well as to protect their own copyright and related intellectual property rights.

Competition Related Issues

As per the Canadian Corporation Act, Business organizations are supportive of the development and economic growth of the country Canada. The Canadian institutional structure and use of policy instruments are examined in the Role of Competition Policy in Regulatory Reform (Oecd.org, 2020). Additionally, it contains the country-specific policy suggestions created by the OECD throughout the review process. However, the directors of the company are failing to comply with this. The changes in competition policy and related Competition Act of the country is amended, it is right but still, the directors do not take any steps for allowing this Act within the system of the company.

Fiduciary Duty Related Issues

Post pandemic era changed the whole system regarding communication. It is right, but it can not deny the maintenance of fiduciary duties of a company like Norda Stelo. The history of the company clearly shows that the cooperation of the stakeholders, shareholders, and directors equally contributes to the company's success (norda.com, 2023). The business judgment rule is not supported and is developing the chances of elimination of liabilities. As the pandemic era develops a huge economic loss for every business organization throughout the world, therefore, improper and unscrutinized decision processes need to be checked on an urgent basis.

Disgruntled Employees

Post pandemic era also evolved the issues of lack of proper workforce for the company. There are already many projects going on and there are requirements for a continuous flow of the workflow. However, the employees of Country Canada as per the Corporation Act and related employment act have various rights (Canada.ca, 2023). Hence, at the time of hiring the company needs to understand this as asking any employee to give their resignation increases the risk of a lawsuit against the company. The documents that are drafted on the dismissal still need to be approved for avoiding any kind of future controversies.
Application of the corporations’ law principles (based on the Corporations Act and Case law) to solve the legal issues of the given topic

The Annual General Meeting provides a chance to discuss all other issues that the company is facing since last year and also for exploring some new ideas and also of existing ideas for solving those issues properly.

The Corporation Act of Canada Clearly States That

As per section 71 of the Canadian Corporation Act, every business organization in the country of Canada is needed to comply with the delivery of security. It is also stated that the selling to customers must be followed with the delivery duty. However, the selling can be direct to the customer or a broker. According to Fourcade and Kluttz (2020), a broker is the assigned person or organization by a company that has the rights of selling company products or services. There are clear instructions that the selling broker and other correspondent brokers also fulfill the duty to deliver.

The case law of “Martel Building Ltd. v. Canada” (2000) is one of the most important examples in which the court clearly states that it is not only related to the tort of contract, if the customer is not satisfied and the organisation fails to maintain its promise about delivery of security then that is a breach of the Corporation Act (Scc-csc.lexum.com, 2022).

The Corporation Act of Canada clearly states that the director of the company or business organisation has to maintain some particular role within the organization. The managing of duties as well as supervising the activities of the organisation such as proper compilation of relevant laws for doing business in country Canada and so on (Laws-lois.justice.gc.ca, 2021). The respective act also clearly states that acting honestly and always trying to be in a good faith to implement the best interests of the organisation is also the duty of a director. However, acting within the power and promoting the success journey of the company also falls under the duty of a director.

Governments, regulators, and proxy advisors have increased their focus on ESG issues, and major investors continue to place sustainability at the center of their investment decisions. Such areas of focus continue to be of major interest as the world emerges from the COVID-19 pandemic, despite growing criticism of corporate attention to social factors.

The Canada Business Corporations Act (CBCA) amendments that took effect on 1 January 2020 mandate that public companies incorporated under the CBCA provide shareholders with certain prescribed diversity information about the directors and senior management, as well as disclosure regarding board renewal initiatives, at each annual shareholders meeting, hence that is also needed to be managed (Laws-lois.justice.gc.ca, 2021).

Appropriate management of the duty of the directors of Norda Stelo is effective in avoiding situations like customer dissatisfaction, and unethical dismissal of employees. Directors need to take the opinion of the shareholders and some of the internal stakeholders like the team members of the company before proving any judgment within a private limited company as per the Corporation Act of the country Canada. As opined by Directors' duties (2020), the exercise of independent judgment is important for the company, but as the company is running upon the money of shares then the decisions of the shareholders play the most important role otherwise there are the chances of dissolving the position of director.

Acting based on reasonable care also came under the duty of the director and was effective in managing the internal and external stakeholders as well as the shareholders of the company. The duty of loyalty and duty of care is also associated with the role of director in Canada. Duty of Disclosure is important for directors to maintain the copyright and patent issues and related lawsuits of the company.

All the fiduciary duties also a director needs to maintain. The Fiduciary duties include the duty of care, the duty of obedience, the Duty of Loyalty, and the Duty of Disclosure. Proper implementation of the duty of the board of directors is supportive for avoiding the situation of lawsuits for the company Norda Stelo as the company is expanding with time and the territory of the organization is also increasing day by day.

The issues of the company regarding the law develops due to changes and a new addition of policies regarding the Company Act of country Canada. However, appropriate steps and compilation with the law support the company to avoid lawsuits related to the Employment Act, Duty of Care, Duty of Negligence, Duty of obedience, Duty of loyalty, and so on.

Use The Relevant Resources and Literature Review To Support The Issues

Requirements and Annual General Meeting

According to the Danoshana, and Ravivathani, 2019, the economic crisis all over the world has created a special ground for corporate governance(Danoshana and Ravivathani., 2019). Corporate governance helps the company to achieve the performance metric required by the company. In this study, the author has taken a financial institution to understand the requirement of corporate governance within a workplace. In this particular study, the requirement of corporate governance has been highlighted. To proceed with corporate governance annual general meeting is required to be fulfilled. In the annual general meeting, the objectives of the firm are discussed and every company has different notions regarding the objectives they want to fulfill. The whole board member of the audit committee is required to be present in the annual board meeting. The objective and all the dilemmas are discussed and solved through this annual general meeting. Despite having such a positive notion regarding the annual general meeting, there is a negative relationship based on the meeting frequency. Annual general meetings are important to ascertain the issues and set corporate goals, however, frequent meetings can create negative situations.

Pandemic and Annual General Meeting

In the words of Khatib and Nour, 2021, corporate governance is crucial in determining the firm's performance. The recent COVID-19 situation has changed the structure of the economy as well as the organization (Khatib and Nour, 2021). In this particular study, the authors have noticed that during the pandemic notion of the corporate structure, performance metric, leveraging and so on has changed significantly. In this order, corporate governance has also changed in a significant manner. In this scenario, the size of the board members does not matter, but the diversity of the board matters the most. During the time of crisis, corporate governance changed from a matter of employee management to a feudal crisis. In this respect, companies need to change their way or structure or the objectives of corporate governance to ensure stability within the workplace.

Relationship Between Board Size and Performance

According to Rikka, 2020, there is a positive correlation between the board size and the performance of the meeting. The board meeting is required to set the objectives and its process visualization(Rikka, 2020). In this aspect, the authors have concluded that board size and performance are positively correlated. Annual general meetings and other meetings are important to determine the performance and its process toward the objective of the firm. The author has studied the Nordic region for analysis of the requirements of corporate governance. This is a proven circumstance that the frequency of meetings results in negative circumstances. The study has suggested that the company needs to address frequent meetings under volatile situations only. Pandemic, recession, and other unforeseen events. Frequent meetings in these events have given the results of positive improvements within the organizations. The performance during these unforeseen events has the possibility of creating negative influences(Iliev et al. 2021). Getting frequent meetings will solve the problems and help the company to reach its goals.

Recommendations

The importance of the annual general meeting is non-negotiable; through these meetings, the company can resolve its issues in a non-disruptive manner. The annual general meeting is different in every company. Every company is different and according to its location, the rules and regulations vary (Cao et al. 2019). The appropriate corporate governance is crucial to determine the problems and dissolving their issues effectively. As mentioned earlier, disgruntled employees are the reason for developing corporate governance. Without the appropriate corporate governance, the company cannot function and restore its more functional assets. This essay is based on the company Norda Stelo and its corporate principles. This company belongs to a different region, as its principle is also different from the other companies situated in different locations. Despite the different locations, the problems of the companies like disgruntled employees and competitive issues are likely to be the same. Corporate governance needs to be stable enough to understand the critical aspects of these problems, but according to the regional differences, the dissolving methods are different (Dat et al. 2020). The Canadian government has different laws and perspectives which do not match the principle and corporate governance objectives which other countries follow. In this scenario, the company is recommended to use the basic empathy methods to deal with the common problem, but with different principles. Corporate patents and copyrights are the same problems dissolved with different principles. The reasons for taking up copyrights are the same, however, every region has different principles and corporate rules to solve these problems. Through these empathetic methods, companies all over the region solve the problems effectively. The cultural differences may have provoked different corporate governance, but with the same mindful principles, the companies are capable of solving their issues with due diligence.

Conclusion

Understanding the above points has given the conclusion that the maintenance of corporate governance is crucial for maintaining decorum among the stakeholders. Every company belonging to different areas has different corporate objectives completely based on the regional taste and attitudes. The problems are the same and relevant with every religion and cultural difference. Due to the different tastes of people and their different perspectives, the corporate rules and regulations tend to be different also. In this context the corporate meetings generally the annual general meeting should be conducted on a particular interval basis. Annual general meetings help to clarify the corporate objective delicately. Despite its positive characteristics, the annual general meeting needs to be conducted on a limited basis (Abdullah et al. 2019). Frequent meetings can deliver a negative perspective on corporate governance and objectives. To understand corporate governance in a significant manner, a Canadian company has been taken into consideration. This company is situated in the Nordic region based on different cultures and beliefs. Analysis of this company has derived that the problems are the same but this company dissolves these issues based on its corporate beliefs. Furthermore, this aspect has helped the company to achieve its goals effectively.

References List