Corporate Law Essay -- Business, Free Market

Harmonization of private international law aspects concerning corporations is the best way to resolve the uncertainties surrounding corporate cross-border mobility. Harmonization of substantive laws concerning corporations is, on the other hand, unattainable and undesirable? Discuss in relation to: (i) Regulating company law matters; AND (ii) Regulating their insolvency. 1. Introduction Modern day corporations with their multilateral nature have created their owned corporate governance regime. Proponents argue that this corporation are replacing states and brining their own current in world’s economy especially the free market. Further, with the wave of globalization these firms have established themselves so firmly in the local and cross border markets that are beyond the imagination as to compare to the perception when the idea of company was formally conceived in legislative instrument. The ongoing process of globalization has also provided corporation with profound changes in the way they conduct their business. Today international transactions are not merely exchange of goods with the foreigner as was in the recent past. Now, corporations are involved in every transaction and there are number of agreements and process going in between such transactions. Comparatively there are more complex legal regimes on one hand, and liberty of abolition of national b arriers with great competition. Today, corporations have a number of methods to capture any market around the globe. There are thin line for demarcation of the area of private international law and public international law as both govern the relationship between international person and states or international person with international person or both depending on th... ...ng. [FN9] That is, the con-tracts between shareholders and other constituencies and the constitution between shareholders and managers create appropriate incentives for the value of the firm to be maximised and distributed amongst the various claimants. The need for judicial intervention should be limited to exceptional cases (although the definition of ‘exceptional’ may be debated). Much attention has been paid to the role of contracts in the theory of the firm, but the role of the constitution as a regulator of collective action by shareholders has not been analysed systematically. [FN10] In the section that follows, I initially *422 analyse the role of organisational constitutions in regulating collective action in general terms, having regard to the constitutional economics of James Buchanan and Gordon Tullock. [FN11] I then apply this model to corporations.