Business Law - Equality Act 2010 and Avoidance of the Expensive Claims by Employees - Assignment Example

BUSINESS LAW Name Institution Course Date Table of Contents Table of Contents 2 1.0 Why starting a business partnership as a limited liability company (LLC) is a better option 3 1.1 Introduction 3 1.2 Definition of an LLC 3 1.3 Advantages of a limited liability company 4 1.3.1 Decreased liabilities 4 1.3.2 Simplicity of Operation 5 1.3.3 LLC Protection of Business possessions during financial recession 5 1.3.4 Income Tax Advantage 6 1.3.5 Dissolving an LLC 6 1.3.6 Ease of Transfer 6 1.3.7 The LLC may seek extra associate aid and bank loans 6 1.3.8 The LLC can assume the risk of new business ventures 7 1.4 Conclusion 7 2.0 Steps that an employer can take comply with The Equality Act 2010 and avoid the expensive claims by employees 8 2.1 Introduction 8 2.2 Steps to take to comply with The Equality Act 2010 (EA 2010) 8 2.2.1 Responsibilities of employers according to the EA 2010 8 2.2.2 Form Equality policy 9 2.2.3 Following the Codes of Practice 10 2.2.4 Making reasonable adjustments 11 2.3 Conclusion 11 References: 12 1.0 Why starting a business partnership as a limited liability company (LLC) is a better option 1.1 Introduction When starting a business, the most vital resolution that a company proprietor ought to come up with is the type of company formation to utilize in his/her business structure. The days where “business owners would simply opt to be sole-proprietors, form partnerships or corporations are long gone and the advent of the Limited Liability Company (LLC) has brought on a whole new level to business structures” (Keatinge et al. 1992, p. 56). 1.2 Definition of an LLC The LLC is described as “an amalgamation of a partnership and corporation since it gives the benefits of a partnership’s tax merits and supervision flexibility while giving the legal responsibility protection of a corporation” (Keatinge et al. 1992, p. 56). An LLC is a separate legal entity, with most of its aspects similar to a corporation, which is legally responsible for its own amount outstanding plus has the ability to function as an officially authorized being. For instance, an LLC can purchase, hold and put up for sale material goods. Setting up a business as a limited liability company lets an entrepreneur to keep their own possessions and money detached from the company itself. This implies that the persons who have invested in the company (shareholders) are only accountable for any company debts up-to the amount they have invested and no more. It is thus a better way of investing in a business without the risk of losing private possessions in case of heavy debts (Keatinge et al. 1992). The most important function of a limited liability company is to encourage company by providing the owner of company with security from individual legal responsibility for company debts as well as a business arrangement that is uncomplicated and easy to run (Limited Liability Companies Act 2006). 1.3 Advantages of a limited liability company 1.3.1 Decreased liabilities Businesses face regular threats of being litigated. A well structured LLC offers fortification when something tragic, like bad debts, occurs. In the event that an LLC is indicted, no more than the material goods of the LLC are subjected to legal responsibility and thus the individual possessions of the associates who possess the LLC are not subjected to legal responsibility. Furthermore, the LLC can compensate a member of staff or associate for expenses of a court case emanating from an occupational occurrence (Joyce and Randall, 1999). However, such type of shield does not incorporate shielding an associate or member of staff who is culpable of wilful misdemeanours or recklessness. In general, the members are protected from two types of liability: 1.3.1.1 Liability for an Act of the LLC In the event of an accident, an employee may be injured and decide to take legal action against the LLC for injuries caused. I the event that the LLC doesn’t have sufficient possessions to compensate the injuries, the associates have no obligation to pay for the injuries from their individual belongings due to the LLC liability shield (Meehan-Strub & Harris, 2004). 1.3.1.2. Liability for a Debt of the LLC Both the active associates of an LLC and the dormant associates are not legally responsible for the amounts outstanding of the LLC exclusively by just being an associate. An LLC possesses similar authority as well as capability as a corporation to perform as a separate lawful individual and be accountable for its amount overdue. If the company wishes to borrow money to expand the business, the LLC itself as a legal person can access funds from the bank and operate as collateral for the loan provided that the LLC attests to be a superior business risk. The members of the LLC do not need to be personally liable for the loan (Meehan-Strub & Harris, 2004). 1.3.2 Simplicity of Operation 1.3.2.1 Easiness of Operation: An LLC is a reasonably uncomplicated method of operating a company. The regulation permits the associates of the LLC to lay down the regulations for the business around the precise requirements of the business. As the business conditions vary, the active associates can alter the ownership as well as running of the LLC (Meehan-Strub & Harris, 2004). 1.3.2.2 Company Book-keeping: An LLC has the capability of using either the ready money or accrual system of book-keeping. The cash system is much simpler way since earnings are documented once funds are paid, not the time of rendering the services. 1.3.2.3 No Corporate official procedure Corporate official procedures are the processes a business ought to pursue to maintain the legal responsibility shield of the corporate structure of undertaking business. People who want to do business together may prepare an LLC functional accord that avoids the prerequisite of the type of official gatherings along with paperwork needed for corporations (Meehan-Strub & Harris, 2004). 1.3.2.4 Planning for Family Situations: Members of the company may wish to have their children to be members of the business. An LLC has the ability to provide for different classes of members. The LLC operational accord may also stipulate a procedure for settling family disagreements via mediation compensated for by the LLC. Finally, the LLC operating agreement also offers guidance for dealing with impacts of lifetime events, such as death, birth, marriage or divorce from one of its active member (Meehan-Strub & Harris, 2004). 1.3.3 LLC Protection of Business possessions during financial recession In period of financial depression, an LLC provides extra shield to the holder or associate of an LLC than when a business is run as a sole proprietorship or joint venture. In the event of a most drastic company setback, only the possessions positioned into the LLC would be seized to reimburse those owed by the company. 1.3.4 Income Tax Advantage LLC provides the best terms as far as tax is concerned. LLCs offers the alternative of “being taxed as a ‘pass-through’ entity (similar to a sole proprietorship or partnership) or as a regular C-corporation” (Joyce and Randall, 1999, p. 98). This means that the company “passes deductions, income, losses, gains as well as tax credits directly through to the members. These amounts are reflected on each member’s individual returns, and they pay taxes at their individual tax rate” (Joyce and Randall, 1999, p. 98). A member who is actively engaged in running the LLC is authorized to subtract operational losses against his normal earnings (Joyce and Randall, 1999). 1.3.5 Dissolving an LLC In a normal joint venture, the demise of an associate frequently demands a splitting up of affiliation chattels, which disrupts the business by demanding the other partners to put up for sale the company to recompense the estate of the dead associate. With well thought-out preparation, these unexpected divisions can be avoided in an LLC. An LLC provides the distinctive benefit of permitting a partner to arrange for the disbanding of the LLC (Joyce and Randall, 1999). 1.3.6 Ease of Transfer “Ownership interests in an LLC may generally be sold to third parties without interrupting the continuous operation of the business” (Joyce and Randall, 1999, p. 34). An LLC member may put up for sale or “allocate his membership interest in the LLC without the authorization of the other members. The member who transfers his membership interest still retains the right to vote and manage the company business; he no longer gets any of the profits or takes the deductions for the losses” (Joyce and Randall, 1999, p. 34). 1.3.7 The LLC may seek extra associate aid and bank loans The LLC can ask for other associate donations to the LLC in substitute for a bigger share of allocation, or the handing over of LLC assets, with the possibility of the LLC buying back the assets. 1.3.8 The LLC can assume the risk of new business ventures The easiness of running an LLC might give good reason for opening a detach LLC for unsafe trade undertakings. The main limitation of an LLC is that the legal responsibility for individual performances and errors are not shielded by an LLC. Also the banks may not be willing to offer loans to an LLC without personal guarantees (Larry, 1995). 1.4 Conclusion Making a decision on whether your company is best fitting for an LLC arrangement in addition to deciding on how your LLC will be operating relies on several varying factors that are distinctive and precise to every company owner’s requirements as well as visions for his/her business. Since LLC is a new concept and considering reality that every state has diverse as well as complex regulations, it is advisable to seek advice from relevant offices in order to make vital resolutions of whether and the manner bywhich to create your LLC. 2.0 Steps that an employer can take comply with The Equality Act 2010 and avoid the expensive claims by employees 2.1 Introduction The equality law demands that “no person is discriminated or treated in a less favourable manner than another person on any of the nine grounds mentioned in the equality Act 2010”. Employers thus ought to put in place practical channels to enlighten and save from harm their workforce as well as the business from expensive claims. As an employer, you need to be accountable for each and every impartiality matter inside the company and have to tackle all equality matters, together with unfairness, by implementing efficient guiding principles and measures. 2.2 Steps to take to comply with The Equality Act 2010 (EA 2010) 2.2.1 Responsibilities of employers according to the EA 2010 A company that has incorporated the required equality policies in the company’s code of conduct has fully informed their workforce of the acceptable performance and provided it holds fast to these guiding principles has a first line of protection in the event of a grievance against it (National Equality Panel, 2010). The Equality Act also sets out the responsibilities of the employer. The Act means treating each and every person fairly, with respect and dignity. As an employer, your business’s policies for recruitment, promotion as well as management of staff should assist you to stay within the law, attract talented workforce and achieve the best services from them. Workplace policies that avert discrimination and pestering, and that assist your workforce to balance home lives and their work, will assist you in retaining employees in addition to minimizing the recruitment costs (Patricia, 2003). As an employer, you ought to ensure that you do what equality law says in relation to: “The conduct of employees who are dealing with clients, customers, club members, service users, guests or associate members, or who are making decisions concerning how they provide their goods, facilities or services to the public”. “The building or other places where the services are provided, if this is open to the public or a section of the public”. “Advertisements and marketing”. “Written materials, such as leaflets the person or organization offers as part of their service”. “Websites and internet services”. “Telephones access as well as call centres” (Hepple, 2010, pp. 40). 2.2.2 Form Equality policy As an employer, you need to create an equality policy that fits your organization. The guiding principle ought to be put in writing in a manner that reveals the culture of the organization and uses that organization’s language as well as expressions and is correlated to other pertinent guidelines within the organization. Moreover, you should ensure that the policy is adhered to by all employees and in case of legal proceedings, you should be able to prove to the legal institutions that the policy has been implemented. Thus, the policy needs, at minimum, to display plainly how the organization acts in accordance with all pertinent legislation (Deborah, 1998). The policy should also illustrate the organization’s position concerning impartiality, for instance, its obligation to equal opportunity, why the organization has an impartiality guiding principle as well as whom the guidelines have an effect on. The policy have to be clear of what it means in practice, such as offering the same right of entry to education along with advancement opportunities for all. It is also vital to specify to whom the guiding principle pertains as well as who is accountable for putting into practice the guiding principle (Hepple, 2011). As an employer, you have to show that the company looks forward to all workers to complying with the guiding principle as well as indicating which workforce or groups of workers have precise tasks to endorse the guidelines. The employer ought to also ensure that the policy clearly indicates what would happen in case the policy is bleached. Since an employer may be held legally responsible for any prejudiced act committed by a member of staff during his or her employment period, whether in place of work or not, it is thus the role of owner to notify the workforce and ensure they are conscious of the expected behavioural aspects (Fredman, 2011). It is also an important responsibility of the employer to prevent vicarious liability. Where a “discriminatory incident happens in the workplace or in a work related function outside the workplace, the employer is responsible. If a company want to protect itself, it will be required to put in place measures to prevent discrimination like: an equal policy; a bullying and harassment policy; an equal status policy; verification that workers received a copy of the policies or that workers had trouble-free access to the policies and comprehend the policies; evidence that managers and administrators were trained on the subject of equality; and evidence that the policies were made clear to workforce and that they were made aware of and understand their responsibilities” (Godwin, 2011,p. 56). Having a company without an equal opportunity guidelines in place, like harassment and maltreatment course of action may perhaps expose the business to a grave jeopardy through sensational legal responsibility. Managers are legally responsible for everything done by a worker during his service period, except when the manager can provide evidence that he undertook the sensible workable steps to avoid prejudice. The best way to avert this predicament is to provide evidence that the business has harassment and maltreatment policy and that all employees were made aware of the policies as well as the consequences of breaching the policy (Fredman, 2011). 2.2.3 Following the Codes of Practice There are several Codes of Practice on sexual aggravation, bullying as well as harassment that aim at giving realistic guidance to managers along with workers on how to avert sexual aggravation, pestering as well as maltreatment at workplace in addition to the way of implementing the procedures for handling it. As an employer, you should develop policies that are consistent with the requirements of these codes. These codes aim at giving practical guidance to employers, employers’ organizations, trade unions as well as workers on: “what is meant by maltreatment in the place of work; what is meant by sexual harassment and pestering in the place of work; how it may be barred; and what steps to take if it does occur, to make sure that sufficient measures are readily available to deal with the problem and to avoid its repetition” (Ed 2010, p. 8). These policies help in promoting the growth together with execution of guiding principles and measures which make work surroundings free of maltreatment, pestering as well as sexual pestering and in which the dignity of everybody is esteemed (Ed 2010). An employer should ensure that: “he has a policy on harassment, he notifies the third parties that harassment of employees is unlawful and cannot be tolerated, he should include a term in all contracts with third parties notifying them of the employer’s policy on harassment and requiring them to adhere, he should also encourage all workers to report any acts of maltreatment by third parties to enable the employer to support the worker and take appropriate action, and he should also take action on every complaint of maltreatment by a third party” (Gerry, 2005, p. 102). 2.2.4 Making reasonable adjustments An employer has a duty to “make reasonable adjustments in the recruitment and selection process as well as during employment. Making reasonable adjustments in recruitment entails providing and accepting information in accessible formats. During recruitment, making reasonable adjustments includes amending employment policies and procedures so as to make sure that disabled employees are not disadvantages in comparison to the non-disabled employees” (Verma, 2008, p. 56). Following these steps can help an employer to avoid these expensive claims that can be made by employees. 2.3 Conclusion It is the role of the employer to avoid any form of harassment, discrimination and victimization of protected groups. If possible, it is important to make some sensible modifications for disabled persons in all these areas. The employees may need to be trained and to be guided on how to deal with customers or services users in order to avoid discrimination (Burrows, 2010). References: "Limited Liability Company: Encyclopedia of Russian Law". Russianlawonline.com. 14 January 2009. Burrows N. 2010, ‘Positive Action’ 96 Employment Law Bulletin 4. Deborah P. 1998, ‘Black Minority Ethnic Concentration, Segregation and Dispersal in Britain’ 35(10) Urban Studies 1681 Ed 2010, ‘Equality Act 2010’ 16(9) Health & Safety at Work 8, 8. Fredman S. 2011, Discrimination Law, 2nd edn, Oxford University Press, Oxford. Gerry H. 2005, Women and Work in Britain since 1840. Routledge, Abingdon. Godwin K. 2011, ‘Equal Value Update’ (2003) 117 Equal Opportunities Review 5, 8; Sandra Fredman, ‘The Public Sector Equality Duty’ 40(4) Industrial Law Journal 405, 416. Hepple B. 2010, ‘The New Single Equality Act in Britain’, 5 The Equal Rights Review 11. Hepple B. 2011, Equality: The New Legal Framework, Hart Publishing Ltd, Oxford. Joyce A. D., and Randall W. T. 1999, ‘Bankruptcy Issues In Partnership And Limited Liability Company Cases’, American Legal Institute-American Bar Association Course of Study, May 13, 1999. (Citation: SD83 ALI-ABA 189) Keatinge et al. 1992, "The Limited Liability Company: A Study of the Emerging Entity," 47 Bus. Law. 375, 383-384. Larry E. R. 1995, ‘A Critique of the Uniform Limited Liability Company Act’, 25 Stetson Law Review 312, 322. Limited Liability Companies Act 2006 (English translation) http://www.finlex.fi/en/laki/kaannokset/2006/en20060624.pdf Meehan-Strub M. & Harris P. E. 2004, ‘Limited Liability Company: A Farm Business Arrangement Alternative’. University of Wisconsin-Madison. National Equality Panel, 2010, ‘An Anatomy of Economic Inequality in the UK – Report of the National Equality Panel’ (Government Equalities Office 2010). Patricia M. T. 2003, ‘What difference did the vote make? Women in public and private life in Britain since 1918’, 76(192) Historical Research 268. Verma V. K. 2008, ‘Affirmative Action (Positive Discrimination)’ LBS Journal of Management & Research. Read More