Corporate Law Revised Polished

Running Head: CORPORATION LAW 1

Corporation law

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CORPORATION LAW 2

Apple Inc.’s Corporate Governance

As an electronics giant, Apple has in recent years focused on intensive inventions and

innovations as a way of staying ahead of its competitors in the market. However, the journey

towards achieving its ultimate goal has seen Apple encounter numerous, unique, and more

unexplored aspects of the law (Lazonick et al, 2013). The decision by the company to hire over

five hundred attorneys is essential in winning worldwide support to Apple’s products, ensuring

adequate compliance with its high ethical, moral, and corporate standards. Ideally, the company’s

legal team is mandated to streamline the operations of the company and intervene in case of legal

issues.

Companies come in different sizes, shapes, and identities, but there exists a unique

component in Apple’s corporate management that makes the company outstanding. One

significant element in the company’s success strategy is its patent rights (Waller, 2010). Notably,

Apple’s corporate structure entails its workforce, resources, and global links in the market. Its

diverse workforce attributes to the remarkable innovations in the technological world, hence the

need to safeguard its resource through legal fronts. The patent rights granted to Apple allows it to

exclude its competitors in the market from using its inventive ideas (Waller, 2010). By doing this

Apple manages to firmly position itself in the market environment and also helps design a positive

image. It is for this reason that Apple has a battery of lawyers who work for the interests of the

company in case of infringements on its ideas and creativity. Ideally, Apple has developed a culture

in its workforce where the employees inclusive of its attorneys have the interests of the company

at heart and work in good faith for the overall success of the entire team

Owners and employees should not have worries about their properties and assets in case of

lawsuits (Berzins et al, 2008). Limited liability is a clause within Apple’s constitution that makes

CORPORATION LAW 3

it outstanding in the corporate world. Essentially, officers or owners of Apple cannot be forced to

use their resources and assets to pay any damages in a lawsuit. The principle constrains the

obligations of Apple within its assets and financial frameworks. In this case, the plaintiff is limited

from accessing individual assets of Apple’s shareholders, and it is only the company’s assets that

are put in line. Apple may be sued until its assets get exhausted, but no creditor can turn to the

owners or directors and request them to meet any deficit (Erickson, 2009). For instance, when

there is a $50,000 award to a plaintiff, Apple’s Chief Executive Officers cannot be forced to

auction or sell their homes to cover the expense (Lin, 2011). The significant element about this

clause is that it allows owners of Apple to take risks to spur and diversify the corporation’s

investments.

The company property belongs to it and not its owners, directors, or managers (Rugman &

Verbeke, 2017). Legal personality is a legal framework that every owner or shareholder of Apple

has to cope with and understand. The clause works to enhance separate heritage in Apple’s asset

management. The principle is essential in demarcating a pool of assets owned by Apple,

completely separating them from other assets owned by shareholders. The law directs Apple itself,

acting through designated directors or managers to be the legal owner of the pool of assets. The

significant element about this corporate clause is that it awards Apple infinite authority to use the

assets within the pool, sell them, or make them available to its creditors for attachment in case of

insolvency (Mäntysaari, 2011). Notably, since Apple is under its designated directors through

unanimous autonomy, an individual shareholder has no legal basis for attaching the firm’s assets

to their private creditors. Even if in the case, Apple remains with a single shareholder, the law

prohibits such an individual from using its assets for personal gain. In the event the sole owner

violets the clause and exits Apple, liquidators and future owners have a right to pursue claims of

CORPORATION LAW 4

theft or misuse of Apple’s assets in the legal and justice systems. Additionally, Apple’s employees

who are found misusing, misappropriating, swindling or plundering the company’s assets can be

pursued through courts based on this legal principle.

Proper delegation of duties is significant for any entity that wishes to succeed in business

(Kraakman, 2017). Apple corporation fancy’s delegated management approach in its operations.

Delegating enables the company’s workforce to share and transfer responsibilities across and

downward its management system (Thompson et al, 2015). Delegation is a plus to Apple’s

operations as it helps develop trust, accountability, and loyalty to the ultimate goal of the

organization. As per the law, Apple’s workforce structure comprises of shareholders, directors,

managers, and other junior employees. Typically, the senior officers in Apple delegate duties to

their juniors giving them ultimate authority to make decisions and act in the best interest of the

organization. Concisely, Apple’s owners usually elect its directors, giving them autonomy and

power to make significant decisions that affect the growth of the entity. However, the delegation

of duties in Apple is characterized by extreme care, skill, and diligence to protect the company’s

interests (Banerjee, 2008). All employees are supposed to work for a great purpose, avoid conflicts

of interests, and make use of their powers to promote the company’s sustainability and growth.

Under the guidance of its attorneys, accountability mindset extends across all ranks of Apple

making it easier to establish the quality of its products. Ideally, entrusting junior workers with

different tasks works to boost morale and develop their experience.

An increase in a corporation’s value of shares necessitates its growth and expansion

(Armour et al, 2017). Transferable share is a corporate clause that allows Apple’s shareholders to

transfer their shares with a lot of ease without difficulties like those witnessed in business

partnerships and other corporations. The provision is beneficial to the perpetual existence of Apple

CORPORATION LAW 5

as its shares are internally traded giving owners who are willing to leave an opportunity to

profitability transfer their shares to shareholders who are eager to sustain the growth of Apple. The

law prohibits shareholders from selling their shares to outsiders to minimize hitches in the

company’s capital value (Huang, & Thiruvadi, 2010). The essence of the law is to caution the

company against massive exits that can warrant its collapse. Typically, the law on transferable

shares functions to sustain the creditworthiness of Apple and its market ratings.

Conclusion

In conclusion, corporate law is essential for any sound economy, especially in the corporate front.

It is for this reason that Apple has decided to adhere to the laid down procedures on corporate

governance in an attempt to minimize uncalled friction and challenges. When a corporation faces

a legal battle, either due to substandard products or unethical actions of its officers, it requires the

services of an experienced corporate attorney with a sharp mind to defeat a threat to the

corporation’s survival. Corporate legal advice is essential at any stage of the business from

formation to liquidation. Whatever the challenges a business faces, the owners should seek the

services of an attorney who knows and understands the needs of the corporation.

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References

Armour, J., Enriques, L., Hansmann, H., & Kraakman, R. (2017). The basic governance

structure: the interests of shareholders as a class.

Banerjee, S. B. (2008). Corporate social responsibility: The good, the bad and the ugly. Critical

sociology, 34(1), 51-79.

Berzins, J., Bøhren, Ø., & Rydland, P. (2008). Corporate finance and governance in firms with

limited liability: Basic characteristics.

Erickson, J. (2009). Corporate governance in the courtroom: An empirical analysis. Wm. & Mary

L. Rev., 51, 1749.

Huang, H. W., & Thiruvadi, S. (2010). Audit committee characteristics and corporate

fraud. International Journal of Public Information Systems, 6(1).

Kraakman, R. (2017). The anatomy of corporate law: A comparative and functional approach.

Oxford University Press.

Lazonick, W., Mazzucato, M., & Tulum, Ö. (2013, December). Apple's changing business model:

What should the world's richest company do with all those profits?. In Accounting

Forum (Vol. 37, No. 4, pp. 249-267). Taylor & Francis.

Lin, T. C. (2011). The corporate governance of iconic executives. Notre Dame L. Rev., 87, 351.

Mäntysaari, P. (2011). Organising the firm: theories of commercial law, corporate governance

and corporate law. Springer Science & Business Media.

Rugman, A., & Verbeke, A. (2017). Global corporate strategy and trade policy. Routledge.

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Thompson, A., Strickland, A. J., & Gamble, J. (2015). Crafting and executing strategy: Concepts

and readings. McGraw-Hill Education.

Waller, S. W. (2010). Corporate governance and competition policy. Geo. Mason L. Rev., 18, 833.

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