|
Company Law and Corporate Governance
Company Law is crucial in market economies; it sets the legal environment for the creation and operation of privately-owned businesses. Good Company Law is especially critical in transition-economy countries. It can encourage entrepreneurship by making it easy to start up and register a company; it can encourage businesses to come out of the underground economy into the publicly-registered taxpaying economy; and it can encourage new investment – and provide investor protection – by setting forth clear and objective rules for a company’s ongoing internal governance.
In most countries the rules for starting up a new company are a small and simple part of the Company Law, while the rules for the company’s continuing operation and governance are vastly more important and more detailed. In Laos, however, the start-up process is lengthy and unpredictable – so much so that this can be considered the number one problem under the Lao Company Law. But start-up is not the only issue; the law also lacks many of the basic provisions for investor control and protection which are found in other Company Laws and which, increasingly, are needed to attract outside investment and meet international best practice.
Accordingly, the company start-up process in Laos should be completely revamped and streamlined. Beyond that, an all-new Lao Company Law is needed on other points. It is understood that such a new law is already being drafted and is at an advanced stage of review. Even if that draft contains a simplified registration process, however, work will remain considering how deeply entrenched the present company start-up system is.
|
