Legal Issues in Business Organizations, Tourism & Events Report

This report examines the legal aspects of business organizations, focusing on three primary types: sole proprietorships, partnerships, and corporations. It details the formation of each type, outlining their characteristics, advantages, and disadvantages. The report further explores the legal solutions available for resolving business disputes, with a particular emphasis on Alternative Dispute Resolution (ADR) methods. It describes the processes of arbitration, conciliation, and mediation as effective means of resolving conflicts outside of court, highlighting their cost-effectiveness and efficiency compared to traditional litigation. The report emphasizes the importance of ADR in providing timely and accessible justice for parties involved in business disputes, contributing to a more efficient and less burdensome resolution process. The report concludes by summarizing the key differences between the business organization types and the benefits of ADR.

LFBM104 & LFTE104
Legal Issues in
Business
Organizations Tourism
and Events
Organizations

Table of Contents
INTRODUCTION ..........................................................................................................................5
TASK ..............................................................................................................................................5
Describe the formation of three different types of business organizations of your choice and
explain the appropriate legal solutions to resolve different types of disputes ...........................5
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
An organisation that runs a business for the conduct of commercial activities is known as
business organisation. In order to conduct a business of any type it is essential for a person to
have an organisation through which business can be conducted and therefore arises the need of
organisations. The activities of such business are conducted in a legal manner by incorporating
the company through authorisation of contracts and property rights and acts. A company or
organisation that has its office in United Kingdom or a person who lives in such country can
make a UK based company. The main purpose of business organisation is to organise a business
in a proper and authorised manner in order to have a record of the tasks and activity in an
organised manner through its legal authorisation. The business organisation can help in having a
good reputation in the market for further growth and development of business. This essay will
cover different types business organisations with its effective legal solutions for resolution of
different legal disputes.
TASK
Describe the formation of three different types of business organizations of your choice and
explain the appropriate legal solutions to resolve different types of disputes
The commercial activities of any business is conducted through the business organisations that
enables in establishing business in the market. A business is run to provide products and services
to common people with the ability of produce, manufacture and distribute the product in the
market. The products and services are then sold in the market in order to achieve profit and
higher income for growth in the market as the high selling of such products and services also
helps in building a good reputation in the market. There are three different types of business
organisations which includes Sole proprietorship, Partnership and Corporation. The business is
run in different way in different kinds of business organisations. These different business
organisations help in understanding the different way or approach through which business can be
conducted.
Sole proprietorship is a business organisation through which business is run through an
individual or a single person. A self employed person is a sole proprietor who runs the business
through himself in order to completely own the business. A sole proprietor or sole trader is a
person who owns an unincorporated business that is run by himself in order to have a sole

ownership of such business. The profit of business of sole proprietorship can be enjoyed by the
sole proprietor after the payment of tax. The losses in business are beard by the sole trader as
being the sole owner of a business. A whole responsibility of business is beard by a sole trader in
order to control and run a business by an individual. There are no partners or co owners in sole
proprietorship. A sole trader does not have any responsibility towards any other owner or partner
in business as he single handedly manages the business. The are some important characteristics
of a sole trader which includes the sole ownership in the business, sole decision making,
unlimited liability, no separate legal entity and does not have any responsibility towards others
and can wind up the business at their own desire. Generally the business of sole proprietorship is
done in small kind of business which does not require huge amount of investment. The losses in
the business are beard by the sole proprietor and is responsible and liable towards whole activity
of sole proprietorship. Local stores, artists, freelancers consultants and designers are some of the
examples of sole proprietorship.
Partnership is the relationship among two or more than two persons with the purpose to gain
profit in business while conducting a business. The partnership must be registered for Self
Assessment under HMRC. The registration of partners in partnership exudes the responsibility of
all partners towards each other in order to bear the responsibility of payment of tax. The return of
tax will be paid out by the partners separately as individuals. In order to start a business through
partnership, there is no limit on the numbers of partners to join in a partnership. There can be as
many partners in the business of partnership in UK. A partnership is not a legal person in law in
the state of England, Wales or Northern Ireland. The responsibility with liability, profit and loss
are equally shared among the partners in a partnership. There are three kinds of partnership
which includes General partnership, limited partnership and limited liability partnership. General
partnership is the general relation between the partners while initiating a partnership where the
responsibilities are equally shared among the partners. Limited partnership and limited liability
partnership is an extension of general partnership where the liability of partners is limited. The
partners are liable up to their contribution in the partnership and is one of the best kind of
partnership. The only disadvantage is that that there is disclosure of the financial status of
members of partnership in public.
Corporation is an entity which is a body of authorised people who act as one person by law and
imposes such rights and liabilities which are separate or different from individuals. A corporation

is created through Royal Charter, State and Common law. The business is incorporated through
corporation where the ownership of corporation is shared through group of shareholders who
represent the shares in order to pursue a business and achieve the set goals and objectives of
business. The main owner of corporation are the shareholders who has a huge interest in business
in order to have a hold of the business. The profit generated through the business of corporation
is returned to the shareholders for further growth in business. The procedure of corporation is a
very lengthy process with various protocols and formalities. The business of corporation is very
expensive and can also have huge tax returns on the basis of structure of corporation. The five
main characteristics of organisation are the ownership of shareholder, limited liability, continuos
lifespan, double taxation, professional management and continuos lifespan of the organisation. A
corporation is a separate legal entity where there is unlimited life of the organisation with its
limited liability. A corporation includes various regulations of the government in order to fulfil
the legal formalities for the maintenance of their position in the market. The main purpose of the
corporation is to provide benefit to its shareholders in order to increase the economic benefit for
the shareholders. The managers of the corporation focus on increasing the wealth of the
shareholders of the organisation. It mainly works on generating profit for growth of the the
organisation. There are various facilities provided to a corporation which enables it to enter into
contracts and has the power to sue any organisation and can also be sued from any organisation.
It can borrow money from various financial institutions in order to fulfil their financial needs for
economic growth of the organisation.
The main advantage of corporation is that it provides protection in personal liability in order to
secure the operational activities of the organisation. It also provides smooth and easy access for
generation of capital in the organisation. The main disadvantage of corporation is that it takes
and consumes a lot of time to maintain the operational activities of the organisation with
imposition of double taxation and rigid formalities which is a very complicated process.
The most effective type of legal solution to solve different types of disputes is the method of
Alternative Dispute Resolution. The way manner or method through which effective solution can
be imparted to the affected parties is the method of Alternative dispute resolution. It solves the
disputes between the consumers and traders without the involvement of court. The parties are not
required to appear in the procedure of Alternative dispute resolution and its decisions are legally

binding on the parties. As the disputes between the consumers and traders are increasing day by
day, there was an immense need to have effective and speedy remedy for solving of issues
between the parties. The solution of ADR aims to provide effective remedy through fast and
speedy trial without any delay or longer proceedings of the court. It is a very cost friendly and
cheaper method for solving disputes between the parties and is a very great alternative of the
long and tedious proceedings of the court. The method of ADR is not used in criminal cases as
they are the cases of high intensity of crimes which need to be dealt out only by criminal courts
or courts of higher authority. The method of ADR is so effective that it helps the parties to
resolve their disputes out of the court in a very cost friendly way. This method also consumes
less time which removes the excess burden on both the parties. There are three methods through
which the method of Alternative Dispute Resolution can be executed which includes arbitration,
conciliation and mediation.
The process through which the disputes of the parties can be resolved in an effective through the
Arbitrator with the issuance of award is known as the process of Arbitration.
The process through which the disputes of the parties can be solves in mutual and friendly
manner in order to prevent the tedious method of litigation is known as the process of
Conciliation.
The voluntary process through which the parties are able to resolve their disputes through a third
person who is neutral and independent and known as mediator is the process of mediation.
The effective solution of ADR is the most convenient and appropriate method for solving
disputes among the parties as it is inexpensive by being cost friendly and less time consuming. It
is a very non hassling procedure which is less formal in order to provide effective remedy to the
parties. The main purpose of Alternative Dispute Resolution is to resolve and settle disputes of
the parties in an impartial manner through a third party who is neutral, independent and non
biased towards the parties. The independent and neutral effect of the third party helps in
providing effective and reasonable justice to the parties without any involuntary or biased
influence. This process helps the parties in reaching a common point through which there can be
a mutual agreement between the parties in order to provide reasonable justice to the parties.

CONCLUSION
From the above essay it is concluded that the conduct of commercial activities is run through
organisation that conducts business in the form of business organisations. The expansion of any
business is done through the repudiated status of business organisations in the market. There are
different kinds of business organisations that help in running a business with different ways and
methods. The three main different types of business organisations are Sole proprietorship,
Partnership and Corporation. A single person who single handedly runs a business is known as
sole trader or sole proprietor. The whole responsibility of business is beard by a sole trader or a
single owner who bears the responsibilities with liabilities and losses occurred in such business.
When two or more than two person runs a business, then it is known as partnership. The
responsibility of the business of partnership is beard equally among the partners and losses,
profits, shares and liabilities are equally shared among the partners. The best kind of partnership
is limited liability partnership as there is limited liability of the partners. Corporation is an entity
which is run through a single authorized person in order to impose the rights and liabilities from
others. The most effective solution for solving the disputes among the parties is the method of
Alternative dispute resolution which provides fast and speedy trial.

REFERENCES
Books and Journals