Global Approaches to Corporate Entities Business International

BUSINESS INTERNATIONAL

Business International: Global Approaches to Corporate Entities

Lease is used to acquiring special property rights so that the beneficiary can attain an asset (Merrill, 2020). Various types of leases have their specified policies and details, which the involved parties have to abide by. Since it is a special agreement, the legal commitment and ownership have to be looked into carefully. This paper aims at reflecting upon a selected country’s lease agreements, distinguishing between a corporate entity and sole proprietors, and the extent to which the country’s government identified and enforced the rules for corporate social responsibility.

Enforcement of Lease for Real Property

Germany enforces its lease for real property in two ways. The commercial property is leased for a fixed term, for instance, ten years or an indefinite time that could be decided by the two parties (Will & Emery, 2020). The lease agreements for residential properties could be decided for an unlimited term so that the termination rights for the tenant and the landlord could be specified. The restrictions in termination rights are also formulated for protecting the tenant when a residential property is concerned.

These agreements include installing certain facilities, such as telephone lines and internet connections in Germany. A written official agreement is created to register these facilities so that the property can be equipped with encumbrances (Will & Emery, 2020). The local building authorities would have to comply with the local laws. To avoid confusion, the public registers could elucidate federal laws for installation and investors’ real estate acquisition matters.

Difference between Corporate Entity and Sole Proprietorship

The differentiation of a corporate entity and sole proprietorship is done easily in Germany since sole proprietorship is the most common business type in the country (Steem It, 2016). The country even considers freelancers or self-employed persons as the sole proprietors as they own their particular type of work and are involved in some trade. A sole proprietorship has unlimited liability and assets, which is also possible in a joint partnership. As a person who starts his entrepreneurial venture on his own, he is the owner of his own business, and hence, the requirement of minimum capital is not there.

There are different rules for a corporate entity or corporation. When several people are involved in the stakes of a single company, then a high risk is involved. The shareholders have to abide by the limited liability policy in Germany, which pertains to the fact that the shareholders are only liable to what they own or possess as assets. Moreover, raising funds for new ventures in Germany is another important characteristic of a corporate entity. The shareholders are invited to invest their money into a new corporation in which they would not be taking part actively. The various legal forms of a corporation in Germany are GmbH (limited liability company), UG (limited liability company), AG (small stock corporation), and the SE (Steem It, 2016).

Country’s Corporate Social Responsibility Rules

The federal government in Germany has enforced corporate social responsibility rules for the companies. The policies even got stricter when the country faced the economic and financial crisis; people were more assertive that the companies should be responsible towards the society and environment (Federal Ministry of Labor and Social Affairs, n.a.). In 2007, the efforts of the Federal Ministry of Labor and Social Affairs formulated the National CSR strategy in which recommendations were put forth for this purpose.

The key challenge in the globalized world is to stick with the internationally recognized standards for social and environmental protection. Germany needs a crucial contribution from the companies, so the firms carry out that environmentally safe practices. As the country has realized that the greater emergence of Western companies within the region has ended in tragic disasters, the country’s economic development calls for increased severe enforcement of the CSR laws for the businesses to ensure labor and social standards to be observed.

Furthermore, the non-financial disclosure of the companies’ management reports was made mandatory on 10th March 2017 to certify that the businesses comply with Germany’s enforced CSR laws (Hi4CSR, n.a.). It was prioritized since the issue is gaining more importance in each coming day. Companies from various countries and cultural influences operating in another country, like Germany, must abide by the host country’s socially and ecologically responsible regulations (Katharina, 2012). CSR creates a greater impact on the consumers and the profitability earned by the companies because they create an image in the eyes of their customers that they care for them and their living environment and do not mean to harm them by using their social resources.

Germany has even taken considerable care of the cross-border CSR strategy so that national human rights are not violated. For this matter, UN guiding principles are kept in line with the German CSR policy for providing the framework for the cross-border firms to operate accordingly. Most of the part of the CSR strategy is voluntary for the companies. However, implementing the human rights CSR strategy is mandatory, particularly by 2020, with the rightful due conscientiousness. Therefore, the German companies are urged to show their willingness in this aspect, identify their risks, and communicate their CSR aims clearly to protect society.