Employers are liable for ensuring that their staff receives absolute elementary employment rights. The point then is that since most organizations will employ workers, it is crucial that those who have the duty of managing, dismissing, and recruiting the employees understand how the employment law functions (Monaghan 105). The mentioned area is a fascinating aspect of legislation because it is highly relevant to individuals and businesses; it also requires familiarity with and reference to the statutory provisions.
Legal characteristics of different types of business organizations
Sole Trader
The business mentioned above exists as the most common and most natural category of an organization; thus, operating it has a much tax and legal impact on the owner and the firm. Some of the characteristics therein include the following ones:
no legal formalities are required to dissolve, manage, and start it;
it has unlimited liability in that the owner is personally liable for all the debts; their personal properties can be detached in case the assets are insufficient to meet its obligations;
it has no legal entity in that the law does not require to distinguish the business and the proprietor;
it is a one-man control company whereby management and ownership are vested in the same person (Gupta 85).
Partnership
The type of organization mentioned above is a voluntary association of two or more individuals who agree to conduct business jointly and share its losses and profits. It has the following characteristics:
it is controlled and owned jointly by all partners;
all partners must give prior consent to enable one of them to transfer their shares;
all the involved parties are jointly liable to an unlimited degree for the firm’s debts;
it must be a lawful business;
it has to consist of at least two individuals (Gupta 92).
Limited Companies
Private Limited Liability Companies
The organization mentioned above is a legal business entity that places restrictions on shareholder ownership as well as limited legal protection. It has the following characteristics:
each shareholder or member has limited liability;
it has perpetual succession whereby it keeps existing in the eyes of the law even in the event of bankruptcy, insolvency, or death of any of its members;
it is mandatory for them to use “privately limited” after its name;
all registered employees have the power to act for the organization;
all the directors have the authority to bind the firm (Gabriel 63).
Public Limited Companies
The business named above as the following attributes:
another firm can acquire it;
it can raise part of its capital after issuing a prospectus;
it can be listed on the stock exchange where its shares can be traded in the open market;
there must be an annual general meeting for the shareholders, and the account must be audited yearly
Social enterprises, Co-Operative Societies and Community Interest Companies (CICs)
The organization mentioned above is a category of a limited company with unique features; it is explicitly designed for those who aspire to operate for the benefit of the community rather than that of the owner. It has the following characteristics:
it is intended to be adopted by non-profit distributing enterprises offering benefits to the community;
the businesses that become or formed as CICs will continue to be generally subject company law framework;
they also have an asset lock whereby the members are prohibited from distributing any profits to themselves.
Advantages and Disadvantages of each Type of Business
Sole Traders
Advantages
it offers an opportunity for gainful self-employment to individuals with limited resources;
management of proprietorship is inexpensive;
it is flexible due to its simple management structure and small in size;
the owner enjoys complete freedom of action;
since the proprietor has to bear all the losses and entitled to receive all the profits, he is motivated to work;
it is easy to start and dissolve.
Disadvantages
it does not enjoy continuity of existence;
the proprietor becomes very conservative and cautious since they are liable for all losses;
it lacks specialization
Partnership
Advantages
scope for expansion;
mutual cooperation;
protection of minority interest;
flexibility of operations;
direct motivation;
combined judgment;
larger financial resources;
ease of formation.
Disadvantages
lesser public confidence;
restriction on transfer of interest;
risk of the implied agency;
conflicts;
uncertain life;
unlimited liability;
limited resources.
Private Limited Company
Advantages
higher status than an unincorporated business;
ability to raise capital from sales of shares to employees, friends, and family;
the original owner can retain control;
continuity in the case a shareholder dies;
separate legal personality;
shareholders have limited liability.
Disadvantages
difficult for shareholders to sell shares;
capital cannot be raised by selling shares to the general public;
involvement of legal formalities in creating the business.
Public Limited Company
Advantages
it is much easier to raise funds since financial institutions are much more willing to lend money to more substantial, well-established firms;
it can issue more shares to the public, which makes it easy to raise to raise capital;
the shareholders have limited liability.
Disadvantages
the company can be vulnerable to a takeover because anyone can buy shares;
annual accounts, as well as reports, must be sent to all shareholders;
it is expensive to establish.
CICs
Advantages
can take advantage of the growing amount of funding set aside for social enterprises;
can borrow money to further its objective;
able to bid for grants available for non-profit-organization; easy to establish (Fogg 91).
Disadvantages
no exemption from tax or VAT;
it misses out on various funds, which are only accessible to charities (Fogg 91).
Company and Partnership Formation
In the UK, the process of company formation is governed by the Companies Act 2006. Section seven of the legislation has replaced 1(1) of the 1985 Act. It has simplified the incorporation process of new organizations in that it is now possible for a single individual to form a public company and it can be facilitated over the internet. However, it retains the current requirement that a person aspiring to establish an organization must subscribe their names to the memorandum of association (“Explanatory Notes to Companies Act 2006”).
The formation of the partnership, on the other hand, is based on the 1890 Partnership Act. The process therein is as follows: the business should have a name, there should be permitted from professional bodies, sector regulator, or local authority, the new venture must be registered with HMRC for tax purposes, and each member must work with HMRC as self-employed. More so, financial record-keeping and banking arrangement should be in place, registration for VAT, registration for PAYE if there will be employees, and acquisition of business insurance (Korchak). Based on the judgment made on Hurst v. Bryk and Others, the premises of the partnership shall be held by the involved parties; thus, the company’s property and cost of all insurance, repairs, rent, and other expenses obtained for the new venture shall be borne by the partnership.
Rights and Duties Arising from Employer/Employee Relationship
The employers have various responsibilities to their employees. For instance, they must guarantee the well-being of the staff under the Safety, Health, and Welfare at Work Act 2005. The aim, in this regard, is to prevent ill health and workplace injuries. Organizations are also required to have written disciplinary and grievances procedures as per the code of practice of the Workplace Relations Commission. As an illustration, the process allows for dismissal only after receiving verbal and written warnings. The employer also has the duty of deducting the correct amount of Universal Social Charge and tax from the wages of the workers and remits the revenue using the PAYE system. Furthermore, they need to conform to the Organization of Working Time Act 1997; it describes the daily and weekly rest breaks as well as maximum working hours (Citizensinformation.ie). Additionally, in the case of British Airways v Pinaud, the decision made was that even if unfavorable treatment of an employee by the employer is in pursuit of a legitimate objective, there needs to be a practical evaluation of its impact. Therefore, the workers have the right to non-victimization, to receive fair labor practices, to have safe working conditions, not to be unfairly dismissed.
Legal Rules Relating to Sex and Race Discrimination
Sex discrimination is based under the Equality Act 2010; it describes that one should not be discriminated by association (because they are connected with an individual of particular sex) or perception (being seen as being of the opposite sex). Thus, it protects people while at work from the four categories of sex discrimination, which include the following ones: harassment, victimization, indirect, and direct (“Sex Discrimination and the Equality Act 2010”). The Equality Act 2010 also lawfully safeguards the workers against discrimination based on race; it covers ethnic origins, nationality, and skin color. One notable example is whereby the mentioned legislation enabled a Metropolitan police poster girl to win a sex and race discrimination case; a tribunal ruled that she was subject to discriminatory treatment because she was a woman and Black (Twomey).
Providing a Safe Place to Work
There are universal laws and statutory duty for the employer as to enable them gives a safe workplace for the employees. First, they are obligated to maintain confidence and mutual trust; in this regard, they must not, without proper cause and reasonable doubt, behave in a manner that is aimed at destroying the relationship of trust and confidence with the workers. Second, they have a duty of care whereby they must ensure a safe working system, avoid exposing the staff to any unnecessary risk, and offer reasonable care of safety. Arguably, providing a safe place to work can be beneficial to both the employer and the workers. For example, in the case of Cougar Automation, the company was able to improve staff retention and reduce the sickness absence to more than half (“Cougar Automation Ltd”). In the case of Donogue v Stevenson (1932), the decision made therein describes the duty of care as the act of being sensible as to avoid omission and activities which one can reasonably foresee would probably injure another individual (Health and Safety at Work).
Conclusion
In summary, in business, the employment regulation covers all responsibilities and civil liberties within the employer-employee association. It involves legal issues due to the wide variety of situations that can transpire and the complication of employment connection. The involved aspects include the following ones: workplace safety, wages and taxation, wrongful termination, and discrimination. It is crucial for organizations to consider such elements as applicable state and federal laws govern them because it will ultimately enable them to become successful. The benefits that would be achieved include excellent staff retention, winning new business due to excellent safety and health management, and substantial reduction in average absence.
Works Cited
Citizensinformation.ie. “Employers' Obligations and Employees' Rights.” Curriculum in Primary Schools, Citizensinformation.ie, n.d., www.citizensinformation.ie/en/employment/employment_rights_and_conditions/employment_rights_and_duties/employer_obligations.html.
“Cougar Automation Ltd.” Health Services - Workplace Violence: What You Need to Do, Health and Safety Executive, n.d., www.hse.gov.uk/business/casestudy/cougar.htm.
“Explanatory Notes to Companies Act 2006.” Legislation.gov.uk, Queen's Printer of Acts of Parliament, n.d. www.legislation.gov.uk/ukpga/2006/46/notes.
Fogg, Ally, et al. Community Radio Toolkit. Radio Regen, 2005.
Gabriel, Vincent. Employment Agency Success. Rank Books, 2014.
Gupta, C.B. ISC Commerce Class-XI (Vol.I). S. Chand Publishing. n.d.
Health and Safety at Work, n.d., www.healthandsafetyatwork.com/content/classic-legal-cases-nebosh-students.
Korchak, Johnathan. “What Is a General Partnership?” Inform Direct, 29 Aug. 2017, www.informdirect.co.uk/business-management/general-partnership-uk-what-is-it/.
Monaghan, Chris. Beginning Business Law. Routledge, 2015.
“Sex Discrimination and the Equality Act 2010: Know Your Rights.” InBrief.co.uk, n.d., www.inbrief.co.uk/discrimination-law/sex-discrimination-act/.
Twomey, John. “Metropolitan Police Poster Girl Wins Race and Sex Discrimination Case.” Express.co.uk, Express.co.uk, 2 July 2014, www.express.co.uk/news/uk/486308/Police-poster-girl-wins-discrimination-case.
