Hein Htet Nyo Win Aung: Batch 18/03
Task 01
1) Differentiate between types of law in Myanmar
Myanmar inherited a common law system from Great Britain as
implemented in colonial India with few updates of the laws after the 1950’s,
until the recent changes in 2011.63 Since the 1950s, legal precedent has not
been consistently used, nor significant case law developed. Many outdated
and repressive laws from the colonial era remain on the books, including the
Penal Code. The main sources of law in Myanmar, codified under the “Burma
Code” (13 volumes, enacted 1841 – 1954), are still in force today, unless
specifically superseded.[ CITATION Ric \l 1033 ]. Type of Myanmar Laws is totally
similar with English Law. Laws can be classified in various ways. They can be
classified into Private and Public Law, or into Civil and Criminal Law.
Public law
Public law is concerned with the relationship between the state and its
citizens. Public law is made up of Criminal Law, Constitutional Law and
Administrative Law.[ CITATION Jon15 \l 1033 ].
Private Law
Private law: Private law is primarily concerned with the rights and
duties of individuals towards each other. It concerned with the areas such as
contract, tort, property, company and family law. The state’s involvement on
this area of law is restrained to providing a civilized method of resolving the
dispute that has arisen. Thus, the legal process is started by the aggrieved
citizen and not by the state. Private law is also called civil law and is often
contrasted with criminal law.[ CITATION Kee09 \l 1033 ]
2) Evaluate the impact of Myanmar Contract Law on Business
The business environment is full of agreements between businesses and
individuals. Once the businessman has decided on the particular form of
business organization that suits his needs, he can concentrate on his main
purpose: establishing and building up the business. This will involve acquiring
premises and equipment, taking on employees, buying raw materials and
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OTHM Dip in Business Management RQF L5: Business Law
Hein Htet Nyo Win Aung: Batch 18/03
stock, marketing the product or service and meeting orders. Underpinning all
these business transactions is the presence of a contract. [ CITATION Kee09 \l
1033 ]. In Myanmar, the contract law is taken directly from The Contract Act
1872 ( The Burma Code Volume 9, Session 11). The Contract Act 1872 is still
enactment a in myanmar.[ CITATION Bri17 \l 1033 ]
A contract is a promise made between two or more parties that the law will
enforce. A contract may be made by word of mouth, by conduct or in writing.
[CITATION Bea \l 1033 ]. According to the [ CITATION Kee09 \l 1033 ], the essential
ingredients of a contract are:
1. Agreement. An agreement is formed when one party accepts the offer
of another. The first requisite of any contract is an agreement. At least
two parties are required; one of them, the offeror, makes an offer
which the other, the offeree, accepts. But the terms of the offer must
not be too vague to open to acceptance.
2. Consideration. The parties must show that their agreement is part of a
bargain; each side must promise to give or do something for the other.
3. Intention. The law will not concern itself with purely domestic or social
arrangements. The parties must have intended their agreement to have
legal consequences.
4. Form. In some cases, certain formalities must be observed.
5. Capacity. The parties must be legally capable of entering into a
contract.
6. Legality. The purpose of the agreement must not be illegal or contrary
to public policy.
For Accor Hotel to make a consignment agreement with a
souvenir shop, the first step is to ensure both parties are legally able to
participate. Contract will not be valid when one of the participants lacks
the legal capacity or legal ability to enter into contracts such as minors,
mental incapacitated persons or individuals who is under the influence
of alcohol. The terms of the offer must not be too vague to open to
acceptance and subject of contract must be legal. Contract agreement
will occur when the shop owner accept the offer. Consideration is an
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OTHM Dip in Business Management RQF L5: Business Law
Hein Htet Nyo Win Aung: Batch 18/03
necessary to bind a valid contract. For there to be a valid contract,
parties are expected to be ad idem while agreeing on the terms of the
contract. Where they are not, such contract will be void. The parties to
a contract must have agreed to the terms of their contract. The
vitiating elements to be considered are mistake, misrepresentation,
duress, undue influence and illegality. The nature of the vitiating
element determines the kind of defect the contract may have, the
contract may not be enforceable at all, it may be enforceable in certain
ways or manners, or there may be no contract at all. [ CITATION Jon15 \l
1033 ]
3) Explain Intellectual Property Rights governing trademarks and brand
names
Intellectual property is a term used to refer to a product or a process
which is marketable and profitable because it is unique [ CITATION Kee09 \l 1033 ] .
Intellectual property (IP) includes creations of the mind, such as inventions;
literary and artistic works; designs; and symbols, names and images used in
commerce. IP is protected legally by, for
example, patents, copyright and trademarks which not only protect the
ownership but also enable people to earn recognition or financial benefit from
what they invent or create.
Brand Name: A Brand name is simply a name or a way to help identify a
business or its product. It is the official name under which the said entity or
individual chooses to do business.
Trademark: A trademark is a word, phrase, logo, symbol, design, colour or a
combination of one or more of these elements that distinguishes one
company’s products/services from that of another.
Legal registration is important because that will allow to the company to make
contracts, conduct sales, advertise, make partnerships and perform other
business activities. Trademark is necessary to aid the consumer identify the
original source of particular goods or services and protect the brand name.
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OTHM Dip in Business Management RQF L5: Business Law
Hein Htet Nyo Win Aung: Batch 18/03
4) Determine the nature, constitution and structure of a company
A company can be defined as a group of persons associated together
for the purpose of carrying on a business, with a view to earn profits. Business
Organizations can be either private or public in Myanmar. Private has no
separate legal entity from its participants and Public is a legal entity in its own
right. On incorporation under law, a company becomes a separate legal entity
as compared to its members. The company is different and distinct from its
members in law. It has its own name and its own seal, its assets and liabilities
are separate and distinct from those of its members. It is capable of owning
property, incurring debt, borrowing money, having a bank account, employing
people, entering into contracts and suing and being sued separately. There
are the basic types of business organizations: Sole Trader, Partnerships,
Private Limited Company, Public Limited Company and Limited Liability
Partnerships.
The constitution of a company may contain a provision relating to the
capacity, rights, powers, or privileges of the company only if the provision
restricts the capacity of the company or those rights, powers, and privileges.
[CITATION Bur17 \l 1033 ] A company’s constitutional documents typically
consisted of two documents – its Memorandum of Association that defines the
company’s special features and its Articles of Association that regulates the
relationship of the company with its members, and also the same amongst
members.
The structure of a company is often closely connected to its culture. In
a small company it’s easier to be dynamic and innovative, whereas in a large
company things are often slow-moving and bureaucratic.
5) Evaluate the management and administration of roles of a company
against employment law
Management and administration may seem the same, but there are
differences between the two. Administration is the process of administering an
organization by a group of people. An organized way of managing people
and things of a business organization is called the Management. The
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OTHM Dip in Business Management RQF L5: Business Law
Hein Htet Nyo Win Aung: Batch 18/03
following table shows the major differences between Management and
Administration.
Management Administration
Authority Middle and Lower Level Top Level
Role Executive Decisive
Concerned with Policies Implementation Policy Formulation
Decision Who will do the work? What should be done?
How will it be done? When is should be done?
Work Putting plans and policies Formulation of plans,
in actions framing policies and
setting objectives
Function Executive and Governing Legislative and
Determinative
6) How employment laws contribute to termination of contracts
Myanmar employment law is the combination of both old and new laws
and regulations, as well as internal policies and practices of the Department of
Labour of the Ministry of Labor, Immigration and Population. Employment law
ensures employees are treated right. It not only protects both employer and
employee, but also prevent conflicts between them by making an employment
contract.
Employees may terminate their contract by resigning or an employer
may terminate the contract by dismissing an employee. Employees' should
make it clear that they are formally resigning and it would be best to do this in
writing giving the correct amount of notice should be given. For dismissal or
termination of an employee by notice, an employer is not needed to state any
reasons. For ordinary misconduct, an employee shall be given a written
warning for 3 times. In case of any further violation within twelve (12) months
from the undertaking, the employer shall be entitled to dismiss the employee
without having to pay severance pay. [ CITATION Lut17 \l 1033 ].
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OTHM Dip in Business Management RQF L5: Business Law
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1) Evaluate the role of agency law.
Agency law refers to the relationship between a person, or “agent,”
that acts on behalf of another person, company, or government, usually called
the “master” or “principal.” An agent has the authority to alter the legal position
of the principal.[ CITATION Ewa11 \l 1033 ]. The authority of an agent is the act(s)
and thing(s) which he is allowed to do by his principal, and which will bind the
principal.
Agency is a very important feature of modern commercial life. It
can be represented diagrammatically as follows:
An agent has a fiduciary duty to loyal for the principal’s benefit in all
matters connected with the agency relationship. An agent may not receive
profits unless the principal knows and approves. Competing with the principal,
Using the confidential information that an agent acquire during their agency is
prohibited. If a principal hires an agent to arrange a transaction, the agent
may not become a party to the transaction without the principal’s permission.
The principal must reimburse the agent for reasonable expenses and
cooperate with the agent in performing agency tasks. [ CITATION Bea \l 1033 ].
Task 2
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OTHM Dip in Business Management RQF L5: Business Law
Hein Htet Nyo Win Aung: Batch 18/03
2) Explain the importance of trade description law.
The Trade Descriptions Act 1968 (UK) makes it an offence for traders
to falsely describe goods and services. The Trade Description of Myanmar is
similar to UK. The Act covers both verbally or written descriptions or any
factual statement about the physical qualities of the product, e.g. size,
capacity, performance, place of manufacture and previous history. For Accor
it is very important to ensure that it has a procedure in place, in a fast
changing market, to ensure that new products are accurately described when
they are put on sale. The Trade Descriptions Act is enforced by Trading
Standards officers. They work for local government and have rights to visit
stores to check on prices and descriptions. In the event of serious problems,
they can prosecute a company through the Court. Court can impose a fine
with the possibility of imprisonment for individuals who are found guilty of an
offence.
3) Explain the rights of consumers given by the consumer protection
agency.
In Myanmar, Consumer Protection Association is independent
consumer protection agency. They cooperate with government departments,
including the Food and Drug Administration (FDA) , regional governments and
the police force, by notifying them when manufacturers and retailer detect
hazardous foods.[ CITATION Thi12 \l 1033 ] . According to Myanmar Consumer
Law, The rights of the consumer given by the customer protection agency are
as follows:
(i) enabling to use safety of the goods or services;
(ii) enabling to choose the goods or services and enabling to obtain the
promised value, terms and conditions and warranty;
(iii) having right to obtain completely and correctly of information
relating to the condition and warranty of the goods or services;
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OTHM Dip in Business Management RQF L5: Business Law
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(iv) claiming to hear and settle on dispute related to goods or
services used by the consumer, enabling to obtain consumer
protection and enabling to obtain correct settlement.
(v) receiving fair relationship that is non-discriminatory treatment
and service.
4) Justify the importance of acting in accordance with consumer safety
laws.
Accor must be aware of the consumer protection law because
consumers are the center of activity of the hotel, restaurant and café
industry. Myanmar consumer protection law that enacted in March 2014
covers the rights and duties of both consumers and entrepreneurs.
Knowledge of consumer safety law protects the business's reputation.
Food safety law plays a vital role in the hotel industry because key
requirement for Hotel business like Accor is to show that food handling and
preparation processes are safe and to keep documentation to show this. Fire
Safety is also important because of the individual travelers have concerns
about their fire safety. People who arrange travel and meetings for employees
or organizations may take on a liability if they neglect to confirm the level of
fire safety equipment. People are more likely to stay in the hotel that has fire
sprinklers in every guest room as well as detection and alarm systems.
5) Explain the formation and constitution of a company.
On December 6, 2017, Myanmar’s President U Htin Kyaw approved
the new Myanmar Companies Law, 2017(MCL), replacing the country’s
century-old Myanmar Companies Act(MCA) of 1914. This law governs the
ownership, registration, management and internal relations of all companies
and business in Myanmar. This gives better opportunities for domestic and
foreign investors in Myanmar. Under the MCL, foreigners can now buy equity
in Myanmar companies and Myanmar companies have greater access to
foreign capital.[ CITATION Dez17 \l 1033 ]
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OTHM Dip in Business Management RQF L5: Business Law
Hein Htet Nyo Win Aung: Batch 18/03
As a joint venture company in Myanmar, Accor must setup under
Foreign Investment Law (FIL) as the local partner normally provides the land,
manufacturing or service facilities and local distribution while the foreign
partner provides the technology, brand name and the management know
how.
Formation of company is the process of incorporation of a business.
New company registration decreases the requirements to one shareholder
and current investors may therefore wish to make their Myanmar company a
100% owned subsidiary.. Under the new Myanmar Companies Law it will
become easier for a company to amend its constitution (the constitution will
be replacing the memorandum and articles of association) to include these.
Directors duties can be altered to allow directors to act in the best interest of
their respective joint venture partner.[ CITATION Hug17 \l 1033 ]
Task 3
1) Evaluate laws governing competition. To include all dimension of
competitive market to no competition in cases of monopolies
The Competition laws are supposed to promote and protect
competition, to protect consumers from predatory business practices by
ensuring that fair competition exists in an open-market economy. These
laws have evolved along with the market, vigilantly guarding against
monopolies and disruptions to the productive ebb and flow of competition.
Myanmar’s Competition Law was enacted in February 2015 to protect the
market from attempted monopolizations, restraints of trade and
anticompetitive mergers.
A monopoly is not illegal, but obtaining or maintaining monopoly power
by anticompetitive means constitutes a serious antitrust offense. A monopoly
is classified by the absence of competition that can cause higher costs for
consumers, inferior products and services and corrupt behavior. Regulators
must also ensure that monopolies are not borne out of a naturally competitive
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Hein Htet Nyo Win Aung: Batch 18/03
environment and gained market share simply through business acumen and
innovation. It’s only acquiring market share through exclusionary or predatory
practices that is illegal.[ CITATION Jus18 \l 1033 ]
2) Assess the needs for mergers and acquisitions and market domination.
Mergers and acquisitions (M&A) is the corporation of finances,
management and strategy dealing with purchasing and/or joining with other
companies. In a merger, two firms join powers to become a new business
mostly with the new name. Because involving companies are same size and
structure so called “merger of equals”. In an acquisition, generally a bigger
business buys a smaller firm that may be absorbed into the parent
organization or run as secondary business. M&A movements is importance in
the global economy, involving several trillions of dollars of worldwide assets
annually.
M&A operations can be subordinated to a defensive strategy in several
situations and it can have more or less strong effects. M&A operations might
represent, for the enterprises, an efficient reaction method to the threat of
strong competitors Also, a business can avoid becoming the target of a
corporate takeover itself. At the microeconomic level, M&A decisions have the
goal to increase the companies’ economic efficiency and to increase the
market domination and influence power.
Conclusion
This report has written based on new Myanmar laws. It can provide
guidance on how to set up business in Myanmar with the absence of legal
risks. So Accor can consider investing in Myanmar Market as a joint venture
company and become a market leader in Myanmar Hospitality Industry by
obeying the laws and regulations as well as Myanmar’s cultural values.
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OTHM Dip in Business Management RQF L5: Business Law
Hein Htet Nyo Win Aung: Batch 18/03
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