1. Advise three friends what they should take into consideration when making up their minds if they should set up their business as a general partnership (unincorporated) or as a limited liability company (incorporated)?
2. A business associate, who has taken on a new role as Operations Manager of a small business, has asked you to help her to explain the difference between an employee and an independent contractor to her Managing Director?
The paper attempts to explore the advantage and disadvantage of different kind of corporation. In this paper we discuss two specific kind of corporation or association like unincorporated partnership firm and incorporated Limited Liability Company. In regards to the perspective of England both are almost same but the major dissimilarity present in the liability part. In LLC is has the separate legal entity and in case of partnership, the partners are liable for the actions of each other.
On the second part of the paper, it defines the difference between independent contractor and employees. According to work they look very similar but in accordance to the liability they are different. Employees are always duty bound to employer and the employer is also liable for the workers act. In case of independent contractor the employer has no liability.
The last part discuss about the matter of dualism and monism theory on the perspective of European Union laws. The application of the theories solely depend on the wish of the members states.
There are three friends who wanted to transfer their business into a partnership firm (unincorporated) or to an incorporated limited liability firm. They have to take certain steps before proceed to the matter. The advices are follows:
An unincorporated forum means and includes that the association has no distinct legal identity from its members. The whole dangers and legal responsibility concerned in administering the institution or business is governed by the persons who own and administer it. There is characteristically a partnership contract which administers its transactions. But if the agreement is silent the Partnership Act will be applicable on that context. To be précised, there are no such formalities regarding the registration of the partnership firm (Dine, Koutsias and Blecher, 2007).
A general partnership has certain relationships and features within it. The first one is relation among the all partners and next one is relationship with the third parties. The former one can usually be superseded by contract among the partners, while the second one is usually confirmed by individual transaction with the party and the firm as a whole (Davis-Blake and Uzzi, 1993).
The belongings of the business are possessed by the partners on the behalf of the partnership firm and they all are individually legally responsible. Along with that they are together and severally liable for trade debts, levy taxes or tortuous accountability. In accordance to that the profits, that are also shared among the partners. On the other hand, a partnership contract will approximately habitually and specifically offer for the method in which earnings and damages are to be collective (Cahn and Donald, 2010).The partnership will finish by the passing away or insolvency or the removal of any partner (Gerven, 2011).
In the context of the country of England and Wales, a concept of partnership does not have distinct legal individuality. Even though, the British & Wales Report of Law Commission planned to make changes in the rule to form separate individuality for all universal partnerships. British administration determined not to put into practice of the application connecting to common partnership firms. The Limited Liability Partnerships Act 2000 bestowed distinct personality concept n the matter of general partnership concept (Hannigan, 2012).
By this discussion we can conclude the matters which are to be kept in mind by the above mentioned three friends.
Incorporated Limited Liability Company:
A limited liability company is the structure or a kind of private limited company. It is a kind of business arrangement that united the cross taxation of a partnership firm or single proprietorship with the restricted accountability of a business (Hannigan, 2012).
A Limited accountability corporation considered to be a mixture trade unit having definite individuality of together with a company and partnership firm or single proprietorship. A limited liability company even though a company unit, it is basically a type of unincorporated association and is not a company (Milman, 1999). In United Kingdom, it is considered to the form of the limited liability partnership. This provision is started in near about 2000 and the format is very similar to the United States. It is alike to that US LLC in case of tax neutralisation that is the members are levied at the associate stage, but cannot have the power to pay tax itself. It is identified as a body corporate in other matters except VAT (Morera Balcells, 2014).
So in this connection if the three friends want to open up a limited liability company the three friends need to understand certain issues:
The dissimilarity among the independent contractor and an employee is tremendously significant for the reason that the dissimilarity determines legal responsibility to recompense and hold back income tax, communal security and Medicare levy etc. The expression “independent contractor” is not defined anywhere properly. The universal rule is that a human being is independent contractors if his manager has the privilege to manage the consequences of the service but not the technique of completing it (Nannicini, 2006).
A self-governing contractor is a person who has trade for his own. Some extra conditions are there which are utilized to explain autonomous contractors which contain advisor, freelancers, and company and trade proprietors. In addition, an autonomous contractor can be a sole proprietor, a restricted liability business, a Corporation, or a business.
An employee is a person who carries out obligation uttered or prescribed by any other person who is generally denotes as the company or principal. The worker regularly experienced education for employment and regarding the accomplishment procedure of job, and frequently works for merely one manager. In a relationship of employer-employee, the manager hold on to the privilege to terminate the worker and the manager offer the worker with apparatus and a position to employment. But in the situation of independent contractors, the question in relation to the relationship of employer-employee is not identified and not established (Studer, 2005).
Along with the difference lie in certain other questions like the span of time desirable to carry out the employment or whether imbursement is stand on duration of work or piece of delivery of work or, whether the employment is division of the usual trade of the company or, whether the party consider they are manager and worker etc. These determining factors are important to focus on the matters because the matter of liability in tax and other sections depends on the situation. The managerial control over the person also depends on the similar situation (Studer, 2005).
There are three major categories under which the difference can be ascertained. First one is behavioural management, monetary control, and kind of relationship. The first issue is behavioural management which includes the fact that demonstrate whether the trade have privileges to command or manage the process of accomplishment of the work or not or they can have the power to provide training on that aspect (Nannicini, 2006). The second issue is fiscal control. Fiscal control includes particulars that demonstrate whether the company has a privilege or position to express or manage the economic and commerce features of the job of the employee. These comprise written agreements exhibiting the relationship of the parties planned to generate, whether the employee is give with worker’s reimbursement or the base of the association.
In summary it can be concluded that:
So in this way the operation manner can demonstrate the matter of difference in relation to an employee and independent contractor. This all are basic differences. Though both of them are looking similar according to the view of work process, control and management they are very much dissimilar with each other.
Conclusion:
The first part is taking about the distinction among the different limited liability corporations. It provides the applicability of legal rule prior to the establishment of this time of associations.
The second phase talks about the distinction of independent contractor and employee. Though in simple meaning they look similar but n case of control and liability from the side of the employer, they are very much different from each other.
On the other hand the third part describes the concept of monism and dualism. In the concept of European Union laws, some state accepts the monism and some adopts the dualism. So, in conclusion it can be state that the applicability is solely depending on the acceptance of the state in this prevailing legal system.
References:
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download
