Outsourcing in subcontracting all that cannot be treated by the company

The outsourcing in subcontracting within a company arises out of necessity. Usually, with a large company or a group of companies, it is fairly hard for the director to manage all the affairs of the entity. He might lack the time or resources to take on the obligations of the company by himself. A prudent director will, therefore, delegate some of these powers to other employees of the organization.

Delegated management and agents

Even though a company is a separate legal entity, it cannot act by itself. Through the rules and laws, there are real people who make the contracts, deal with property, and so on. The board of governors is usually given the duty to collect, manage and represent the company. The director of the company represents the organization and carries the personal, legal, and criminal liability for acts or omissions that may arise from the performance of his duty. The directors and officers of a company have the authority under state laws and company by laws to hire and delegate duties to employees.

The legal implication of outsourcing in subcontracting 

The outsourcing in subcontracting within a corporation is a delicate process that must be conducted with care and caution.  This is because the acts of a director, board, or the employees of a company are binding on the corporation depending on different laws and the principles of vicarious liability. It is worth noting, however, that an employee or director who works beyond the scope of their mandate may perform that acts are not binding. The director cannot also, under some circumstances, transfer his liability to his employees.

A written delegation is prudent practice in any corporation. It details the powers and duties conferred thus the need for a document that sets out the terms of the outsourcing. The document also provides evidence of delegation and is proper managerial practice.