Legal Issues in Business Organizations, Tourism and Events Organizations

This essay covers formation of different types of business organizations and appropriate legal solutions in order to resolve the disputes. It also discusses alternative dispute resolution mechanisms which may be used to solve the range of disputes.

Legal Issues in
Business
Organizations,
Tourism and Events
Organizations
Contents

INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The legal system in UK comprises of the statutory as well as common law. There are
different legislations being enacted in order to regulate the working of different sectors so that
they can function effectively. There are various types of business organizations which are
formed that includes sole proprietorship, partnership, corporation and companies. These have a
significant impact on the economy as they contribute in the GDP of the nation by fulfilling job
opportunities in the country and raise the standard of living of the people. there are many legal
issues also faced by the businesses which includes compliance with standards and policies, and
many others (Ono, 2019). This essay shall cover formation of different types of business
organizations and appropriate legal solutions in order to resolve the disputes.
MAIN BODY
The business organization can be referred to as the entity which is formed with a sole
purpose to carry out the commercial enterprise. These are predicted on the system of law which
is governed by the contracts, exchange, incorporation and property right. They have the sole aim
to generate maximum profits and revenues by undertaking the commercial activity such as
trading or manufacturing.
There are various types of business organizations which are legally formed in UK which
includes firstly the sole proprietorship. It is an entity which is suitable normally for the small
scale business and has only one single owner. There sole trader is responsible for the functioning
of the business and has the decision making powers. There is a personal liability of the owner for
all the debts of the firm which means that its personal assets may be sold in order to repay the
debt and liability of the firm. The sole owner takes all charge right from running the business to
making all decisions for the benefit of the firm (Mishulina and et. al., 2019). The main advantage
of incorporating this business includes that the decision making power rest in the hands of owner
but its disadvantage is that there is personal unlimited liability of the owner. The formation of
sole trader involves a simple process which includes making registration at HMRC with the
suitable name. it takes less cost and time to make the registration of the sole proprietorship.
Another organization is partnership which involves two or more than two members who
mutually decides to establish the firm. They are known as partners who agrees to share the profit
and loss of the firm. The partners also share cost, risk, responsibilities and benefits of running the

business. These are the unincorporated entities wherein the partners are self-employed as they
have to pay personal tax from the earning of the firm which they receive from their share. There
is personal and unlimited liability of the partners for the debts and losses which may incur from
the business undertaken. There are mainly two types of partnership which includes firstly
general partnership wherein the partners have personal liability for the firm in an unlimited
manner and its formation involves registration at HMRC and the partnership agreement. Its
advantage involves that there is easiness in raising the capital of the firm as the partners
contribute in the capital of partnership while its disadvantage includes that the partners are
responsible for the misconduct or negligence of other partner (Nöda, 2020). Second is limited
liability partnership. As the name suggest that it is a partnership, but there is a slight difference
between the two types of partnership which involves that in LLP, the partners have limited
liability for the loss and debt of the firm and their liability is only to the extent of the share of the
partner. its legal formation involves registration at HMRC and Companies House and the LLP
agreement so that the terms of working is fixed. It is also mandatory for the firm to prepare and
file the annual accounts of the business. The members are required to submit the personal self-
assessment tax return on annual basis and must pay the income tax on the profit share received
and also pay the national insurance to the HMRC.
Third is company which is not formed simply by the agreement which is entered I to
between the members unlike partnership, rather it should be registered at the court or public
office. As per English company law, the companies are required to be formed by filing the
constitution of the company which includes Memorandum of Association and Article of
Association which is signed by the first members at Companies Registry. The companies are the
separate legal entity which are distinct from the owners. It is the artificial personality which has
its own common seal (Westwood, 2017). There are mainly two types of companies, first is
private which are formed when there is no requirement to appeal from public to subscribe the
shares of the company. It has private people who share the ownership of the company. It is a
privately managed business which is owned by its directors. Second is public company which
are formed by conversion of the private company into public when it becomes necessary to raise
the capital from public by subscribing to the shares of the company by publishing the prospectus.
It undergoes the formal process to set up the company which involves registration at Companies
House and compliance with associated rules. It also involves filing the Constitution of company

which includes MoA and AoA (Kisi and et. al., 2020). Its step of formation involves firstly to
check the type of the entity that is applicable and then search for the name of the company as
there must not be the name of such company which is already taken. Then the directors as well
as shareholders are appointed and the necessary documents are prepared for the running of
business. Lastly, after filing the documents, the company is registered.
There may be instances when the business organizations may face different range of
disputes. These conflicts may be resolved by way of litigation which is the traditional method of
bring solution to the dispute. It is considered as the time consuming and costly process as there is
a formal process to resolve the dispute. It also takes a lot of formality to solve the dispute. Apart
from this, there are other alternative dispute resolution mechanisms which may be used to solve
the range of disputes. These are enumerated under Civil Procedure Rules, 1986 which provides
that these legal solutions offer speedy disposal as well as cost effective solution to the business
organizations. These are out of court settlement mechanism which are aimed to resolve dispute
of businesses in short span of time. In UK, the ADRs are encouraged by HMRC for the disputes
relating to tax payers (Gherghina, 2017).
There are some common features of the alternate dispute resolutions which includes firstly
that it is the consensual process which means that the court cannot compel any party to refer its
dispute to the ADR rather, it is their own choice. But there are some instances when the court
may compel and in case they refuse in an unreasonable manner, it may penalize them. Second is
it is an inexpensive and quick method of resolving the dispute. Third important feature of this is
that it is flexible in nature. It simply means that the form of the procedure may be tailored in
order to suit needs of parties. The alternate dispute resolution can occur either during or at the
beginning of the litigation or the arbitration proceedings. The parties to dispute are free to agree
as to whether the proceedings must continue or also be stayed during the process of ADR.
The first legal solution is negotiation wherein an independent third party is appointed who
tries to negotiate between the parties so that the amicable solution is brought between them. The
aim of this resolution is to put both the parties at win-win situation so that no one is loses
anything. It is the flexible and informal method of ADR process which involves the parties to
make an attempt to reach the agreement on the matter in the dispute (Sharma 2021).
Second is mediation which involves a process wherein the parties appoint the neutral third
party in order to identify key issues in the disputes and an attempt is made in order to bring the

parties to the agreed resolution. This form of dispute resolution is also encouraged by the courts
and it is cheaper as well as quicker. When the mediation is reached for resolution, it shall be put
in the formal agreement and also signed by parties. Once the signature is taken, it is cheaper and
quicker. If one of the party refuses to abide by agreement, other party may enforce it. If the
resolution is not reached, anything which is discussed at mediation may not be referred to in any
of the court proceedings.
Third is arbitration which is more of the formal kind of alternate dispute resolution that
involves the tribunal process and the independent arbitrator is appointed by the parties on mutual
basis who hear both sides of the parties to the dispute before coming to the decision. It is a
flexible method of dispute resolution wherein the parties decide the date, time and place of the
arbitration and also the arbitrators are appointed by the parties. These are required to be in odd
number and not in even number so that majority decision is brought. It has the enforceability
same as court judgement. The decision is given by the independent arbitrator which is known as
an award and the decision is given after examining the facts as well as evidence on record. It is
enforceable as the court judgement (ROBERT-TISSOT, 2019).
Then is conciliation which involves appointing the independent person for brining
conciliation among the parties. They may be appointed in maximum 3 numbers and are required
to bring settlement between the parties. the conciliator, after examining the facts of the case and
the evidence on record, pass the decision which is mentioned in the settlement agreement. The
parties have the flexibility to prepare their own settlement agreement or make bring changes in
the settlement agreement made by the conciliator. After signing the agreement, it is enforceable
against the parties as it is binding in nature. It is commonly used in the family or the employment
related disputes.
Hence, it can be said that there are many methods of resolving the disputes apart from
litigation which includes arbitration, conciliation, mediation and negotiation which offers speed
disposal of the case and is cost effective method.

CONCLUSION
It is concluded from this essay that there are different types of business organizations which
are legally formed in UK that includes sole proprietorship., partnership and company. The first
two are unincorporated entities while the company is incorporated entity. Whenever any dispute
is arisen in the business, there are dispute resolution which may opted by them so that the
conflict is solved among them. These include arbitration, mediation, conciliation as well as
negotiation. They offer speedy disposal of the case and is cost effective.

REFERENCES
Books and Journals
Gherghina, O.R., 2017. Comparative study between FIDIC Dispute Adjudication and
Negotiation as Alternative Dispute Resolution methods. Conferința Internațională de
Drept, Studii Europene și Relații Internaționale, (V), pp.252-260.
Kisi, K.P., and et. al., 2020. Alternative dispute resolution practices in international road
construction contracts. Journal of Legal Affairs and Dispute Resolution in Engineering
and Construction. 12(2). p.04520001.
Mishulina, O.V., and et. al., 2019. Comprehensive assessment of business activity of a
commercial organization. J. Advanced Res. L. & Econ.. 10. p.1824.
Nöda, K., 2020. Big Business Organization. In Modern Japanese Organization and Decision-
Making (pp. 115-145). University of California Press.
Ono, T., 2019. Types of business organization of agricultural organized management entities:
according to labor indicator by using microdata from 2015 agricultural census. Journal
of Rural Economics. 90(4). pp.339-344.
ROBERT-TISSOT, F., 2019. INTERNATIONAL ARBITRATION AND ALTERNATIVE
DISPUTE RESOLUTION.
Sharma, R., 2021. Information and communication technology in alternative dispute resolution:
Is it facilitative or disruptive?. In Social Media in Legal Practice (No. 15, pp. 259-274).
RMIT University.
Westwood, R., 2017. Culture, business organization and managerial behaviour in east Asia.
In The People Link (pp. 13-72). University of Toronto Press.