Sample on Importance Business Law In Organization

Business Law for Managers

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Table of Contents Introduction ..................................................................................................................................... 1 Question 1 ....................................................................................................................................... 2 Alteration dispute resolution ....................................................................................................... 2 Arbitration ................................................................................................................................... 2 Mediation .................................................................................................................................... 3 Question 2 ....................................................................................................................................... 4 Question 3 ....................................................................................................................................... 8 Partnership Act 1890................................................................................................................... 8 Companies Act 2006 ................................................................................................................. 11 Conclusion .................................................................................................................................... 13 references ...................................................................................................................................... 14

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INTRODUCTION Business law is part of civil law which is applied on issues of commercial criteria regarding conduction of persons and organizations. Several schemes related to organization structure and behavior is regulated by this law. It deals with establishment of new businesses and issues arise in existing businesses such as partnerships and corporations (Rush and Ottley, 2006). Present project report is based on “Business law for managers�. Other popular areas are also included in business laws which are insurance, planning, contracts of employees, management of business etc.

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Project report will comprises of description of mechanisms of litigation in the event of dispute among management and employees. It will include practices of mediation and arbitration. Along with it, key strategies will be discussed which can be used for cross-cultural and domestic negotiation. In last part of project explanation will be provided for partnership and companies Act which are established by parliament of UK with its positive and negative factors.

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QUESTION 1 Alteration dispute resolution (ADR) Alternative dispute resolution is wider term which includes techniques arbitration and mediation and other techniques to resolve issues. These methods are replacement to legal proceedings which is in informal manner (Rimmington, Smith, and Hawkins, 2006). In modern economy all business organizations desires to prevent legal issues and binding and prefer non judicial methods for solution. Such techniques are cost and time effective and it is less critical in comparison to traditional litigation. Concept of ADR is highly promoted by legislatures due to its convenience. This approach is beneficial for clients as it created mutual understanding among them.

ADR is usually classified into four terms which are negotiation, mediation, collaborative law and arbitration. Along with legal proceedings ADR can also be used within jurisdictions of common law. In this solution to disputes are provided outside official judicial mechanisms by using informal methods (Schaffer, 2009). It is combination of informal and formal tribunal and meditative processes. Use of ADR is increasing even on international level. Procedure of these techniques is flexible and can be molded according to requirement. It has less complexity and cost while execution. By this preservations can be made in relationships and reputation.

In modern economy employment issues are in general practices. For resolving issues following techniques can be used by business organizationsArbitration It is technique to resolve issues without inserting legal parties. In this settlement is made outside the court. Parties under arbitration are known as arbitrators. In this third party is appointed which should be neutral and capable to impose decisions. Judgment given by third party created obligations for arbitrators which is enforceable by law (Slapper,

and Kelly,

2011). Arbitration is the hearing done for settlement of dispute between parties by a person chosen by them. In event of employment issues managers and employers are allowed to select an 2|Page

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unbiased and independent outsider to determination of solution of problem of business. Role of arbitrator is like a judge who provides decision for the case.

Arbitration is quick way which can be selected by management and employee for resolving problem. It is time and cost efficient in comparison of procedure of employment tribunal. It is less formal way to solve dispute. According to scheme of arbitration of Acas (Advisory, Conciliation and Arbitration Service) cases are solved for issues of unfair dismissal and dispute regarding to flexible working. It is suitable in situation where there are not critical legal issues.

Suggestions for such option can be taken by local Citizens Advice Bureau (CAB) who will provide free and unbiased advice.

For the given situation manager and junior employee can refer technique of arbitration to resolve the issue. In this option arbitrator can be appointed by either party. If any of the party is not agreeing for arbitrator, in that situation they can go to chief justice officer for selection of person who will judge the situation. After appointment of arbitrator evidence and facts will be presented by both manger and junior employee which will use for discussion regarding to issue.

By facts problem will be identified by arbitrator and solution will be provided.

Mediation Mediation is procedure which helps in finding of solution which can be accepted by both sides. It is done to create win-win situation where both parties will be satisfied with judgment.

For this procedure an impartial expert is appointed (i.e. mediator) who will have communication with both parties separately and may talk jointly if required. It is quick and effective techniques which can be used to solve disputes. Method of mediation is less stressful comparatively from legal action. Along with provide solution for issue, mediator also suggests to make improvement to prevent it in future.

It is techniques used in form of alternative dispute resolution, which is method for resolving issues among two or more parties with concrete effects. The term mediation refers to situation where third party helps main parties in settlement. Procedure of this technique is private and confidential which may be enforced by law (Thomas-Mobley, and Khuncumchoo, 2006). Several 3|Page

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techniques are used by mediators for open, improve, dialogue and empathy between disputants.

Objective of mediator is to help parties to reach on common conclusion. It depends on the skill and training of mediator. There are many convincing reason for promotion of excess use of mediation in individual employment. Major advantage of this technique is flexibility due to informal approach. By this technique open and honest discussion is made which make ease to provide solution to resolve issue.

Using this technique in current scenario junior employee and manager are required to appoint a mediator of their choice. Meeting will be arranged by disputing parties to provide general idea for facts and evidence. Separate meeting will be conducted. For discussion of favorable result common meeting will be held will concluded result will be given by mediator. It will be equivalent to official decision which will be required to be followed by both the parties.

QUESTION 2 Negotiation refers to settlement between two or more parties to reach on common agreement to solve difference. Objective of negotiation is to gain understanding by entire parties to satisfy several interests. It can said to be mutual discussion and arrangement of terms regarding to a particular transaction (Negotiations, 2014). It is a procedure commit by disputants to find solution for common problem. Purpose of negotiation is to avoid arguments and conflicts among parties to attain best available outcome in that situation. Styles and techniques of negotiation may differ as it is differently shaped by countries and their cultures. In the modern era procedure of cross cultural negotiation is becoming more critical to execute and it is growing exponentially.

In the age of global economy Domestic and cross cultural negotiation is becoming more important and getting crucial part of management. It is procedure to resolve difference and perceptions of different countries. It will be tuff to survive in modern era for all business organizations without Domestic and cross cultural negotiation. Factors that affect such activities are protocol, communication, and propensity of risk taking and view of time (What is negotiation?. 2014). Negotiation forms an agreement which provide assurance in unexpected events. It is predictable that differences regarding to needs, wants and aims will be arise of 4|Page

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people who comes together for business operations. If technique of negotiation is not adopted than this differences will be converted into argument which will create conflicts. In order to attain best outcome it is required to adopt structured approach of negotiation. Procedure of negotiation is comprises of following steps•

Preparation

•

Discussion

•

Clarification of goals

•

Negotiate towards a win-win outcome

•

Agreement

•

Implementation of course of action

Domestic and cross cultural negotiation is not an easy task due to individual differences.

Moreover negotiation with foreign citizen is more critical process due to contradictions between policies and strategies. Issues in negotiation arise because of conflicts in perception of individuals (Palmer, 2014). In cross cultural negotiation another hurdle is language. It is important to communicate problem effectively but due to changes in language proper codes are not used. Such problem can act as barriers in establishment of credibility and trust. Different culture sets different aspects of negotiation. Goal of such procedure can be substantive outcome or long lasting relationship.

In order to perform effective intra and inter cultural communication, most crucial element understanding among parties. Further it requires solving issue of language, values and beliefs to having effective negotiations. There are several key strategies that can be adopted by business organization for Domestic and cross cultural negotiation. Some of these strategies are described as follow➢ Deep understanding of others culture: For negotiation it is essential to have deep insight about facts of other culture and their belief. In this manner knowledge will be gained and trust will be built among parties of negotiation. Benefits will be attained by business 5|Page

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organizations in selection of right strategy and tactics in the procedure of domestic and cross cultural negotiation (Hendon, 1996).

Erudition for other side's culture shows

symbol of respect which is major factor for creation of good relationship and to solve conflicts. Moreover, having knowledge for other culture in detail which should be sufficient for strategy of negotiation is tuff to attain but principles can be identified by them which influence foreign culture of other party in dealing. Following strategy is suitable for both aspects that are domestic as well as international cross-culture negotiation. Learning for culture can be done by Parties by regular contacts and meetings which will also help in creating strong bond between them. ➢ Find ways to bridge the culture gap: Parties entering into the contract for the purpose of business can adopt third culture in order to develop healthy persona relationship. They can use combination of both cultures so as to adjust with situation apart from the adoption of other side's culture. When there is difficulty in identification of common ground than this concept can be use by parties as it will assist them in creation of strong business relationship. It can be use at international as well as domestic trade transactions.

This approach can be use in joint venture of business as it will helps parties to settle their differences and successfully carry out trade operations. The use of third culture will helps to develop healthy relationship and to achieve growth in context of market share. ➢ Maintain personal integrity, build solid relations and converse concessions: It is important that both the parties should have knowledge about each other as it will help them to create the feel of comfort. In addition to this, there should be personal integrity and good relationship among parties as will offer more value for long run and help to successfully carry out business operations as domestic as well as international level (Morgan, , 2011). It is required that parties should develop trust and should show respect towards each other as it will helps in effective negotiation. Further lack of trust can create barrier in development of relationship as well as in business operations. In addition to 6|Page

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this, credibility is also important effective negotiation. Parties can use this strategy at both international as well as domestic level. It will help them to effectively carry out cross cultural negotiation and to achieve success. ➢ Don't Stereotype: The parties entering into the contract are required to have better understanding about culture of each other. In addition to this, parties should put efforts in order to treat everyone with respect instead of generalizing. They should learn about each other culture as making assumption can develop distrust or barriers. In addition to this, beliefs, values and culture should be represented by one party (Miller, 2011). Further they can build trust among parties as it will assist them to properly understand culture of each other and will develop healthy relationship. This will helps them to effectively carry out business operations at domestic as well as international level.

This is a sample on Business law for managers for complete Essay writing services Kindly, contact us at: +1 2139295632 help@instantessaywriting.com ➢ Use simple and accessible language: It is important that people should understand before they agree on something. In order to be successful negotiator, the key aspects needs to be communicated properly. In the process of negotiation both parties communicate with 7|Page

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another. Hence it is essential that parties should use common, simple and accessible language that will be understand by both the parties (Miller, and Cross, 2012). It will help both the contracting parties to understand culture of each other and will result in creation of healthy personal relationship. The use of this strategy will help to effectively carry out business operations and to achieve success.

QUESTION 3 Business law is established for the management of establishment of new organizations. In this rules and regulations are create for purpose of litigations and resolving contradictions.

Business can be set up either is form of sole trader or partnership or company. For selection of better option among partnership and Limited liability Company, evaluation of both options is as followPartnership Partnership refers to agreement commonly formed by more than two peoples who mutually accepted to come together to form business. In such firm’s ownership, liabilities and profits are shared between partners. Following are clauses and terms which are determined by act that governs operations of partnership.

Partnership Act 1890 According to Partnership Act 1890 partnership can be defined as relationship between two or more parties to run business with common objective for earning profits. Agreement among them can be oral or return it depends on their convenience. Minimum number of partners according to Act is 2 and after amendment maximum numbers of partners can be unlimited.

Forming organization as partnership is really good option in some cases. To run business as individual there be comparatively low turnover and capital. Partnership is appropriate legal structure which is suitable for new businesses. Rules and regulations of partnership Act, 1980 applies in all organizations of partnership unless it is not excluded (in implied or expressed manner). As per partnership there is right with all partners to participate in management and get 8|Page

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equal share of profit (Gulbro, and Herbig, 1995). Any of the partners cannot be expelled from firm. Existence of partnership comes to end on the event of death of any party. Exception to this clause is prior agreement between parties before death. All the partners are jointly and severally liable for debt and obligation till the date of agreement. With the end of partnership, estate of partners also became severally liable.

According to act of partnership postulation is made regarding to indemnity of liability. All the partners are jointly and severally liable for the offensive acts performed by other partners.

Act done by partner within ordinary course of business will bind the entire firm. As per law act performed by partners should be in utmost good faith toward his fellow partners. It includes duty of honesty, restriction on making secret profits and not to get engaged in such activity which is against or competitive to existing business. For ordinary operations decisions under firms are taken by majority. If there are some extraordinary issues such as alteration in kind of business or to admit or expel partners then unanimity will be required.

Advantages of partnership Capital- As per nature of organization funds are provided by partners as initial capital.

Therefore more the partners, more the capital will be introduced for business. It will lead more potential profit which will be equally allocated among the partners (Gillies, 2004). Partners can contribute either capital or assets. Once the capital is introduces it will be ceased till the existence.

Flexibility and decision making- Business in form of partnership are easy to run and manage comparative to other organizations. They have to face less regulation than companies.

Flexible decisions can be taken by partners with the help of each other. More brains generate ideas which provide quick and effective solution for problems.

Distributed responsibility- Obligations and liabilities are share among partners who are running the business. By this factor the put efforts by best of their abilities instead of dividing of work and management (Donohoe, 2011). They do not have motive to distribute work equally, work is done by them according to their skills and qualities to attain better results.

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Liability- Generally partnerships firms are subjected to unlimited liability. It means liability and financial risk of business are shared by partners. This clause can be excluded for some partners. It can be countered to formation of limited liability partnership. This flexibility provides advantages in comparison to company as firm can enjoy concept of limited liability with factors of partnership.

Disadvantages of partnership Contradiction- This is most common negative point of partnership. There is always threat of disagreements among partners. It is obvious that, where there will be more than one idea there will be conflicts to determine what will be best of business. Contradiction does not only harm business it will also have negative impact of relationships of partners (Clarkson, 2010). It will lead to reduction in faith. It is the only for which draft of deed is suggested to partners.

Taxation- Crucial disadvantage which has to be faced by business is law of taxation.

According to taxation law partnership firms are required to pay taxes similarly as sole proprietorship firms on the basis of self assessment. In comparison to company higher tax is charged by partnership organizations. Partners are under obligation for registration with HM revenue and customs as self employed.

Profit sharing- Earned profits are equally allocated among partners irrespective of other factors. Equal part of profit is not fair is some situation where there is unequal capital or different efforts by partners (Chadwick, 2011). If such clause is expressly or impliedly excluded than profit can be allocated according to their deed.

Agreement- Business in such firms is jointly managed hence it is required for all partners to agree on terms which are done for operations. It means there are chances of situation where freedom for work will restricted regarding to management or other operations. In this context limited liability companies had more flexibility as directors consider will of members.

Disagreements among partners can be expensive and prolonged to resolve.

It will affect the

reputation of business in outer environment.

Limited liability Company 10 | P a g e

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Limited Liability Company is an organization where obligations are limited to their contributed share for business. It refers people who are investors and owners of company are only obliged up to the amount of their investment. In such forms there is distinct identity of business apart from their members (CamĂŠn, Gottfridsson, and Rundh, 2012). Owners of company are allowed to keep separate assets and earnings from business itself. In aspect of risk it is good form of business where there is no burden and responsibility on personal wealth. Such organizations are governed by Companies Act, 2006 which has following clauses.

Companies Act 2006 According to this a company is an organization which is formed and registered under this act. Companies Act, 2006 was established by parliament of United Kingdom which forms the primary source of UK company law. Present act is amendment of previous Companies Act, 1985. Company is an entity which is distinct from its shareholders and directors. Power of it is according to articles which are exercised by directors. There are certain rights which may be restricted by shareholders in annual general meeting.

For formation of Limited Liability Company there are certain criteria which are required to be satisfied. Such conditions are defined by Companies Act, 2006. First and foremost condition is that organization should be registered with Companies House. For establishment of limited company entrepreneurs can take help of TheCompanyWarehouse.co.uk. Second condition is there should be at least one director and two if it is plc According to previous Act there were also criteria for maximum and minimum age of director that was 16-70 (Bowyer, 2000). For it issues were raised by various so this clause was removed by new Act. In such organization management of operations are handled by directors and funds are provided by shareholders who are entitled for reward.

Advantages of limited company Limited liability- General advantage in Limited Liability Company is of financial assurance. It is previously described that owners or shareholders will only be liable for the undue debt. Security is provided to investors for risk and reward.

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Taxation benefits- Such organizations are required to pay taxes only on their profits (generally @ 21%). No personal taxes are required to be paid as sole proprietors and partnership firms in which can rise to 40%. There is also advantage to members and directors who are running limited company. They can pay themselves wages at minimum level to take advantage of personal allowance of ÂŁ6,475.

Asset utilization- Usually people feel pride to use assets of company specially cars but in Limited Liability Company it is recommended to not to do so. Instead of this director should use their personal cars for business purpose. By this strategy they can charge amount for such work from business and enjoy advantage of tax free fuel (Best, and Banes, 2007). Similarly if personal premises are used for business purpose cost of it can also be claimed. It is beneficial for taxation strategies.

Ownership and control- In the organizations of private limited company directors and shareholders are usually same persons. Hence power and ownership remains in their hands. By this they can make quick and easy decisions with little fuss. It provides business platform for successful management.

Name of company- With the registration of organization name is also registered. It creates protection of name which cannot be copied by other businesses. This establishes separate identity of business in industry.

Disadvantages of Limited Liability Company Cost and restriction in enhancement in capital - Formation of companies is relatively higher in comparison to partnership and sole trader. For complying legal requirements, registration and other factors increases cost of setup of company. Companies can increase amount up to an extent via sales of shares. There is option for plc to increase funding by sale of shares but this ability is adverse for limited liability companies.

Dilution of powers- According to nature of Limited Liability Company there are always conflicts between shareholders and director for rights and powers. In several situations there are contradictions between them for selection among available options. For generation of funds 12 | P a g e

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share are sold by company which increase dilution in management (Bar, and Drobing, 2004). By this more people will get right to participate in operations and varieties of idea will be there to run company. It will increase conflicts. There is also threat of takeover by other companies because other business organizations can also purchase shares.

Complex accounts- More restrictive and complicated regulations are required to be followed by companies in the procedure of book keeping. Such process is time and cost consuming. It reduces flexibility of business for maintenance of financial accounts.

According to above description it is recommended to client to start business in form of Limited Liability Company. By selection of this organization client can attain advantages for criteria of taxation, earnings, brand image and effective management.

CONCLUSION Business law is mandatory to follow by all business organizations. From the present project it can be expressed significance of business law in set up of new businesses and solving issues in existing entities. Cost and time effective strategies are explained by business laws which are effective to refer in event of contradiction in internal environment of business (Alkhamees, 2012). In the law there are alternative techniques available which can be used for effective negotiations in both aspects that are domestic and cross cultural. In context of formation of new business rules and regulations are described by Act of partnership and companies which is set up by parliament of UK. Both structures have their own advantages and disadvantages which are required to consider while formation of new business.

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Alkhamees, A., 2012. Private action as a remedy against market manipulation in the USA. Journal of Financial Regulation and Compliance.

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