Question:
Your task is to research analyse and synthesise current issues facing companies,directors and boards in AustraliaThe analysis and recommendations are to be presented in a professionally presented report of 2500 + words.
Executive summary
The particular report introduces company’s law and regulations based on which the business activities are performance in more deliverable manner. In the analysis, the company law includes set of legislations and rules that provides authentications in every business activities performed. It is also assessed that the law making are adopted and implicated for measuring and taking liable actions against any business errors, miscounts or issues. The report includes a case study of Chaser Ltd, which a wine manufacturing company desires to develop its business in the Australian market place, hence there are high competitions in the market, the directors of business entity has made decision on diversifications and investment in different business areas. Soon a proposal comes from Wayne an individuals working in Tribal energy for making partnership and introduce generates manifested based on the energy in Australian market. Within few months, the Chaser and tribal energy face huge loss due to failure of the project of tribal energy due to unsuitably of product with Australian water. There are some issues identified such as lack of market research, poor experiences, poor business planning and lack of investment evaluations that has reasoned the loss for company. The engagement of company act 2001 and general act, there are certain director’s duties that have been breached by Anthony and other directors of Chaser Ltd. In the analysis a proper advisory and identifications of breach based on company’s law has been provided to the directors of Chaser Ltd.
The company law and regulations are formed in relations enhance certain legislations and rules to execute the business activities more legal and authorized manner (Dignam and Lowry, 2009). In the analysis, every business entities desire to make growth and development in a structured and proper manner. Implications of these regulations provide the business entities such rules to follow for enhancing the business in more professional manner. The report is based on the case study of Chaser Limited, a wine manufacturing company experienced huge loss in a wrong investment decisions on a Norway based company Tidal energy. Implications of the company act 2001. It will include a brief discussions on the issues identified, factors that has influenced the issues and advisories based on the issues faced by company and its directors.
A wine bottling company Chaser Ltd has managing directors Anthony, Ben, Catherine and Daniel. The board of directors has experienced a massive competition in the wine market, due which the directors has made decision on the diversifications of their business. In the way of diversifying, there is delusions has been made on the investment on different business field to enhances the growth and sustainable development of company. In the analysis of the case study one of the directors of the company has met with one of their friend Wayne who has been working for Tidal energy. As per the assessment, the Tidal energy is been a developing company that has made a pace in its growth in Europe, Atlantic and coast of United States of America. In the evaluations, the energy produced by Tidal energy is more eco-friendly and environmental free. In the Australian market, no other business organizations are currently using such energy as per the current analysis.
Wayne has formed a company name Westpool Pty. Ltd that manufactures stream generators using Tidal energy and resources. Soon Wayne represented the directors of Chaser Ltd in concern of introducing the open up the tidal energy proposal in the Australian market place. The directors have decided to make an investment of $ 20 million on the venture of Wayne without making further detailed discussion and evaluations. After the three months of business, the Tidal energy and Chaser Ltd business start losing the market providing huge loss figures to both the companies. In the analysis, it has assessed that the Aurelian water is not suitable for Tidal energy resources that has made a huge failure for the companies. The directors of the Chaser companies has soon identified that Wayne claimed to be a higher positioning holder in Tidal energy company is actually do not have any such positioning and experience to hold. It has also evaluated that one of the directors of Chaser Ltd has been major shareholder of West Pool which was the formed company of Wayne.
The company’s laws and regulations are adopted and implemented to enhance the business activities more relevant manner (Langford, 2011). In verge of making development and improvement of the business, some boyishness decisions becomes wrong for the most of the business entities that brings loss and market creditability. As per the case study, it has been assessed that there are few issues and challenges that hands been identified to be reason on the failure of Chaser Ltd and Tidal energy in Australian market. Some of the major reasoning for the loss faced by Chaser Ltd in the Australian market is as following:
Figure: Issues of business failure
(Source: Warchol, 2011, pp- 36)
The business expansions development and growth are always depended on the market research that is based in market analysis. It includes customer analysis and segmentations of the product or services to be introduced (Gale, 2007). As per the analysis, it has been seen that the company’s management are not able to evaluate and assess trends, needs and demands of the market. Thus, the introduction of some of the product and services fails and results to huge losses for the business. In the case study, the directors of the company have faced issues of lack proper market research and customer segmentations for tidal energy proposed by Wayne. It has assessed three would have been a critical market analysis that might have provided information on unsuitability of Tidal eco-friendly energy on Australian water due to Great Barrier Reef.
As per the companies rules and regulation act, the partnership is based on several factors such as product line, resources, polices, market competitions and forecasting’s (Kanamugire and Chimuka, 2014). These factors are included in proper market plan while making introduction of new product with a new company partnership in the market place. In the business filed, there is several partnership failures has been experienced due to lack of proper business plan. Thus, it is necessary to identify the goals, objectives targets for the making a proper focus and allocations of resources based on it (Mitchell, 2011). The case of Chaser limited, has engaged such lack of business planning while making partnership with the Tidal energy. In the analysis, the failure of the business proposal and energy product in Australian market has evaluated due to issue of lack of proper goals and objective to achieve by the business.
The factor that defines issue for a failure in business proposal to enter in new market and expand its business is under evaluations of investment and lack of experiences (Hannigan, 2009). Most of the retimes it has been seen in the business entities fails in the market due to out of money to be invested by the business entities. As per the assessment, the investment research is necessary for management of every business entities to make proper analysis on possibilities of profitability and returns on project to be invested (Bruno, 2012).
It has been assessed that the lack of experiences learning and knowledge also evaluated as a prominent issue of failure of business in the market (Rutter, 2010). The analysis evaluates that poor knowledge and learning on the market situations, trends and proper investment modules can result to wrong decision-making (Dean, 2013). In the case study, it is assessed that Chaser Ltd directors has not made a proper investment analysis and research before making investments. As a result the Tidal energy project has been failed in Australian market place. The valuations also assess the Wayne and Anthony’s lack of experience, knowledge and learning has made an impact on failure. The ingredients of Tidal energy have also made an issue that has made a loss of $ 20 million for Chaser Ltd in Australian market place investments.
As per the assessment, there are certain issues that have been identified in concern to the companies act and general act of the business entities. The issues been signified due to which the business failure occurs are addressed in the rule and regulations of the company law (Robb, 2011). Lack of market researching, improper analysis of investments, irregular or sudden partnership deals poor experiences in investment. The market learning is some of the major issues that results to loss and failure of business. Thus, analysis and evaluations of the factors that influence such issues are needed to be identified to mitigate or reduce such risks in business. Some of the factors that influences this issues can be evaluated an assessed as following:
Figure 2: Factors influencing business failure
(Source: Lowry, 2012, pp- 71)
The market research is evaluated to be an important phase in development and growth of new product or service in the market place (Tonkin, 2011). As per the analysis, the factors that influence the market research are market trends, customer segmenting, and demands. In the analysis, the managers of the business entities need to assess these factors while making a critical research in development or introduction of new product. Lack of information on these factors results to wrong market research thus end to loss or failure of product or services for the business (Warchol, 2011). The directors of Chaser Ltd has made a lacking in assessment of market trends and demands that has lead to loss of partnership with the Tidal energy.
The business planning includes some relevant factors such as investment modules, engagement of stakeholders, proper plan, forecasting of market and competitive environment. When any of the interpreted factors in business planning remains absent, the failure to business growth and development is more possible. It has analyzed that lack of resource and forecasting and research are one of the influencing factors that provides success or failure of a business plan (KarlíÄÂek and Drábik, 2012). The chaser Ltd business plan of introducing Tidal energy in Australia has failed due to lack of information on unsuitable circumstance of Australian water system.
Every business entities uses certain capital budgeting and investment appraisal tools and techniques to analyze the profitability, forecasting and valuations of project they estimated or interest to invest (Harvey, 2009). As per the assessment, the information generated from the forecasting and valuations analysis of project returns. They are used for making critical decision on investment in project and amount of funding to be introduced in the project. In the analysis, the directors of Chaser Ltd might have lacking improper evaluations and analysis of the investment forecasting that has resulted in wring investment decision making. Lack of learning knowledge and improper research of Anthony and Wayne has resulted introduction of Tribal energy in wrong market place. It has made loss in the investment for both of the business entities.
The company’s act of 2001 provides different form of business entities that to be introduced in the market place. In the law and regulations formations of the business, it includes certain jurisdictions for different purpose and goals to be achieved (Charles, 2010). It has been assessed that different form of law has been established for different form of business such as limited companies, partnership and sole proprietorship. In accordance to companies act 2001 (Cth), the partnership business are need to be formed based on certain documentations, guarantees and proper analytical research (Szörényi, 2010). As per Australian companies Act 2001, the directors have some judiciary dies towards the business organization. In section 181, the directors need to be believers, good faith and interested towards providing profitability to firm. As per sections 182, the director’s duty is to not to misuse the high position of business and engage the positioning for personal interest and advantages (Lowry, 2009). There should not be any leakage of company information conducted by directors for getting personal gains has addressed in section 184. The company act 2001, directors duties section 184 evaluate the person to be faced criminal penalties on violations of all the sections mentioned as director’s duties in a business entity.
Figure 3: Business directors Duty as per Company laws
(Source Robb, 2011, pp- 96)
As per the assessment, the director’s duties in the business organizations are mostly relate to specifying and retention of interest in growth and development of business entity (Dong, 2011). In the general corporate law of Australian companies act, the director’s duties are equally similar to the companies act and their respective sections presented for the directors duties. As per the assessment, the general law and regulations in Australian companies evaluate that a director needs to be honest faithful and trust worthy towards its firm (Siljander, 2008). It has also analyzed that the directors must not make acceptability of any gains to be provided by third party who is not related or related indirectly to the company. As per the assessment, every activities and business action need to be taken by critical analysis and investigations not based on single proposals made by another third persons (Harvey, 2009). The executives must not use the positioning of being a director of company for any other inappropriate purposes. It has also described that must been need to proper retentions in judgment in business decisions. Duty of staying away or neglecting many personal interest conflicts with the business activities (Taylor, 2010).
As per the analysis and evaluation of directors duties assessed in companies act 2001 and general company act, there are some braches has been identified commenced by directors of Chaser Ltd. The case study has evaluated some of the issues and challenges that have lead to loss of Chaser and Tribal energy loss in Australian market. In the analysis, Anthony one of the directors of company has breached law of conflict of interest as providing opportunity to convincing other directors for investment on Tribal energy. As per the analysis, the directors of the company need to make more proper critical analysis and market research on the investment proposals made by any third parties. Based on the critical analysis and evaluations provide proper idea on profitability and reliably of the project in the future. It has also assessed that director’s positions has also been misused to enhance the advantage. As the other directors of the business has elaborated that Anthony has majority shareholder in Wayans business a partnership with Chaser Ltd would have enhances the share of individuals from both the companies.
In the analysis, the directors of Chaser Ltd have also able to make proper judgment on the project proposal of tribal energy. The breach of retention on judgment of directors has been made as the top executives of company has made decisions based on poor experiences of Wayne, improper analysis on market research of Australia. It has been analyzed that as per the section 181 and 184, the breach in faithful and honesty to interest in increasing profitability of company has made. As per the assessment, it has been analyzed that the directors of company need to make proper market evaluations, business planning and use investment appraisal techniques to assess profit returns on project to be invested. The directors of Caser Ltd need to follow proper rules regulations and law of Companies act and general law on director’s need to provide efficient contributions in development of business.
Conclusions
The report provides critical evaluations on Companies and securities law, which is defined as set of regulations and legislations. It provides proper guideline on partnerships, business activities shareholding and other business related operations. These laws are usually assessed as the corporate acts that introduced information and evaluations on the guideline and framework on investment modules limited liabilities. The report is based on Chaser Ltd a wine manufacturing company loss face due to lack proper judgments of directors of company. With the engagement of Company’s act 2001 and general act some of the prominent issues, reactors influencing and breach of directors duties has been identified in report.
References
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Hannigan, B. (2009). Company law. Oxford: Oxford University Press.
Harvey, C. (2009). Cornerstones of Australian law. Prahran, Vic.: Tilde University Press.
Mitchell, R. (2011). Law, corporate governance and partnerships at work. Farnham, Surrey, England: Ashgate Pub.
Siljander, R. (2008). Introduction to Business and Industrial Security and Loss Control. Springfield: Charles C Thomas Publisher, LTD.
Tonkin, H. (2011). State control over private military and security companies in armed conflict. Cambridge, U.K.: Cambridge University Press.
Bruno, S. (2012). “Directors’ Versus Shareholders’ Primacy in U.S. Corporations Through the Eyes of History: Is Directors’ Power “Inherent”?”. European Company and Financial Law Review, 9(4).
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Robb, G. (2011). “Rob McQueen, A Social History of Company Law: Great Britain and the Australian Colonies, 1854–1920”, Surrey: Ashgate Publishing, 2009. Pp. 374. $124.95 (ISBN 978-0-754-62168-3). Law and History Review, 29(02), pp.63-80.
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