Navigating Legal and Ethical Frontiers in Healthcare Business


The law is referred to the systematic body which develops rules that are to govern the society as a whole and manage the actions of the individuals. The ethics mainly explores the ideas regarding morality and its place in society for addressing queries regarding morality. The difference between law and ethics is that law is set by the government and ethics is developed on the basis of right and wrong perception of human principles (Hall et al. 2018). In this assignment, the law and ethics in business context within the healthcare sector are to be explored. In this purpose, the role of promoter in private limited company is t be discussed and the related legislation to be followed by the individual. Moreover, the ethical and legal issues of patient choice in the context of NHS are to be discussed along with the law and policy that direct patient's movement between the NHS and private healthcare sector in the UK.


Task 1

Discussing the role of the promoter of a Private Limited Company

The Corporate Promoter of a company is referred to the person who is involved to execute the basic work related to the formation of the company such as incorporation, promotion and floatation along with offer solicitation to people for investing money in the firm during its formation (Zhao et al. 2017). Thus, the role of the promoter is to develop idea of setting business and make analysis for the viable aspects in business to ensure it is technically, economically and financially feasible for incorporating them in the formation of the company (Kher and Chawla, 2018). Thus, it informs that Adam by being the corporate promoter of the company would be the responsible individual who by using his innovative ideas would set up the business in a proper way. This would be an effective approach as Adam is the one who has wide experience in working for managing private clinics allowing him to have intricate information and ideas about the key aspects to be included in providing quality care to the patients. Moreover, by accessing support from Alex and Paul who are experienced sales professional in the healthcare field in the UK, Adam would have effective information regarding the way the current company is to be successfully promoted during its formation.

The role of the promoter is to execute detailed investigation for the profitability, viability and future prospect in regard to the growth of the activity proposed for the formation of the company. In this aspect, the promoter is able to seek assistance from lawyers, company secretariat, cost accountants and others to determine and set the activities for the company (Styhre, 2018). This indicates that Adam if become the promoter then would have the opportunity in setting the proposed activities of the business by consultation with experts that could create progressive and improved future growth of the company. As commented by Kabir et al. (2019), assistance from the specialists is required by the promoter as they are involved in researching the market to aware the promoter about the current and future demands and needs in the industry. Thus, Adam by being the promoter of the private company would be able to consult with the experts to determine viable proposed activities for the business. As criticised by Ahluwalia et al. (2020), risk of the business could not be avoided by the corporate promoter if the person does not properly assemble required factors for the production of services and goods for the business. This is because it would lead the promoter to lack effective labour and resources required for assembling to convert the proposed idea in the business into reality. Thus, Adam to avoid the fear of financial risk and become the promoter have to determine and assemble factors required in production and delivery of intended service proposed for the private clinic to be set up by them.

The promoter has the role to involve in preliminary contracts with third parties in anticipation regarding the company is already registered. However, after the registration, the promoter has the roles to confirm the contracts to avail support (Nosworthy and Symes, 2016). This implies for Adam who on being corporate promoter is to confirm any anticipated third party contracts being set after registration of the company. As argued by Ahmad et al. (2019), promoter of the company is to avoid identical names of the business. This is because it may lead them to face lawsuits from the original company is stealing their identity as well as develop hindrance in setting a separate name in the industry as the consumer confuse the new business with other existing company. This is implied to Adam who requires to ensure that the new private clinic to be set up by them do not have the identical name of any existing company in the UK.

The Erlanger vs New Sombrero Phosphate Co (1878) is regarded as landmark case in the UK where it is mentioned that the promoter of a business or company has a fiduciary position in the firm. They have the role of moulding and creating the business as well as have the power to inform the way, when and in which shape and who would supervise to make the company existent to act as trading corporation (, 2019). Thus, the law implies to Adam where he is the promoter of the private clinic have role to remain in fiduciary position with the business and would act to direct activities in formation and operation of the company. In the Salomon vs A Salomon and Co Ltd (1897), the Court of Appeal mentioned that the Co Ltd was a myth and mentioned Salomon has executed the business as a person and is solely responsible for the debt incurred by shareholders in the agency due to failure of the business. However, the House of Lords ruled that the company was already incorporated and it is irrelevant for the shareholders who took part in promoting the company in discussing the personal liability and rights of Salomon. This led to the formation of the “corporate veil” between owners and the company ( 2019, 2019). Thus, according to the case, Adams fear of being responsible to make financial loss and have liability to pay the debts to the shareholders is inappropriate as if the private clinic is already an incorporated company as decided the act of “corporate veil” would act to protect him. Therefore, Adam could become the promoter of the company and work with Alex and Paul in setting up the business.

A Private Limited Company is referred to the business in which the liability of the owner is limited to the shares held by them. Moreover, in this business structure, the shareholders and directors do not have personal liability for the debts of the company (Engelhardt, 2017). Thus, it informs that Adam being the promoter and director of the company would have no personal liability in managing financial debts and would be only responsible to pay debts based on the share held by the individual. Thus, it allows the liability to be shared among all avoiding the owner to take the entire risk of finances. The Companies Act 2006 has the key aim of modernising as well as simplifying the company law, offer codes for director duties, improve rights of shareholders and simplify administrative responsibility or burden on the UK companies (, 2006). Adam being the promoter of the company has the role to follow guidelines and rules mentioned in the Act to develop policies and regulations with the company that is to be also done in consultation with other members such as Alex and Paul. The Company Act 2006 mentions that it is the duty of the director to avoid any secret profile of the business, neglect conflicting ideas and implement required skills to ensure the smooth running of the business (, 2006). Adam while acting as promoter who usually acts as director for the company has the role to avoid any secret profiling of the company, avoid hiding profits of the company to be used as own, implement required skills and other for the effective running of the private clinic determined to be established.

Task 2

Discussing the issue of patient choice in context of NHS

The Patient Choice is the key concept mainly introduced by the National Healthcare Services (NHS) in England according to which most patients are allowed to make decision and choice of the clinic from where they wish to avail healthcare and the way money to be paid according to their choice (Gaynor et al. 2016). Thus, this aspect of NHS allowed the patient to be able to choose to be seen by any public body, NHS trust, third sector body or commercial organisation. However, it is to ensure the body is holding commissioning contract with the Clinical Commissioning Group or NHS England when the patients are referred by the GP to the specific bodies.

The ethical issue of patient choice in context to the NHS is hindrance to maintain effective confidentiality and anonymity of the patient. This is because NHS to refer the patient on the basis of their choice of care body to be availed for healthcare has to share detailed information of the individual with the third party organisation. In executing it, the NHS often face issue to maintaining confidentiality as personal data of the patient due to negligence and repeated requirement of transmission of patient information leads them vulnerable to be exposed in the society (Cohen and Caswell, 2017). In addition, the private organisation are not directly ruled by the NHS and therefore the faulty act of managing information of the patient may lead to create confidentiality issues making the patient to be exposed to vulnerability in the society (Powell et al. 2019).

The ethical issue regarding patient choice in context to the NHS may lead them to face hindrance in managing non-maleficence and beneficence for the patients. The non-maleficence is referred to avoiding harming the patient to ensure their good health and beneficence is ensuring the nurses act responsibility to offer beneficial care to the service users (Waters et al. 2019). The nurses in the private healthcare organisation in the UK are ensured to follow Nursing Code of Ethics developed by the NHS. However, due to lack of direct administration by the NHS in private healthcare organisation issues of beneficence and non-maleficence may be created as a hindered working of the nurses since they are not supervised by the NHS leading to develop hindered care issues for patients to respect their choices (, 2020).

Discussing law and policy for patient movement from NHS to private healthcare sector

The legal guidance developed by the NHS mentions that when the patient is moved from the NHS to private healthcare based on their choice the NHS care which is free of cost would not be affected in any way (, 2020). This informs that if the patient wishes to avail care from the NHS irrespective of privative healthcare they would not be charged in way within the NHS. It is evident as the position is clarified through El (95) 132 in the Green Book where the right to free services as per the NHS Act 1977 is regarded to be an undying right and does not ceases to be present even though the patient is availing care from private hospital. It is the joint duty of the state that the patient is offered seamless care and arrangement in the NHS is made irrespe3ct of their health status in private care (, 2018). However, the policy mentions that clear demarcation between the NHS treatment and private treatment of the patient is to be present (, 2018). This is because issues have often been raised where patient reports against the efficiency of services offered to them by private healthcare are due to preceding treatment informed by the NHS. For instance, the patient cannot opt to avail cataract surgery from NHS and lens to be implanted by the private healthcare. The either has to avail the ensure care and surgery under NHS or the private clinic of their choice (, 2020).

The law and policy of the NHS mention that they are not going to provide subsidy or pay any charges as support to the patient in availing care within the private clinics (, 2019). This indicates that NHS offer sole financial responsibility on the patient to avail their decided care within the private healthcare clinics in the UK. The NHS policy informs that waiting time in the NHS for the patient would not be affected in any way if they avail healthcare in the private clinic (, 2019). This indicates as patients progress in the waiting list within the NHS with time to avail care it would act as same even though they are availing care from the private healthcare clinics. The Health and Social Care Act 2012 has allowed developing coalition between the NHS and the private healthcare organisation within the UK. This has led NHS Foundation Trusts to be able to avail 50% of the income for their organisation from the private patients. It is evident as the 2012 Act led the private organisation to potentially increase Private Patient Units (PPUs) which are mainly operated by the NHS Foundation Trust (, 2012). Thus, the condition has placed the doctors to refer patients to move out of NHS to avail private care as it offers them to have opportunity to avail better support, in turn, acting to allows NHS in making money.

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According to Private Patient Policy, the NHS patients are allowed to change the healthcare administration to private healthcare. The Consultant who is in-charge of the patient is to develop detailed information regarding facilities, billing procedure and charges to be levied for the patient so that the information is clearly stated to the service users (, 2018). The inability to properly state changes to patients regarding NHS care to private care make them feels cheated or inappropriately managed (, 2018). This is because patients without being aware of the alterations are unable to determine whether or not they actually would be to avail the required care in the private at their own expense. The Private Patient Policy informs that patients are unable to opt-in as well as out of NHS treatment from private healthcare for lowering the cost of their diagnosis and treatment (, 2018). This indicates that patients are to initially decide if the care is to be entirely received from the NHS or private healthcare.

The Private Patient Policy informs that in case a patient admitted as private inpatient in the NHS hospital and wishes to change to NHS category before accessing any treatment the analysis of the priority of the patient is to be made. This is to ensure the patient is allocated in the waiting list. The policy also informs that in the position patient are to be made aware they have to pay charges in the NHS for availing care (, 2018). This is because the patients may think that availing care under NHS means they are going to avail free support which is not valid as the patient is a private inpatient to be allowed to access care in the NHS hospital. In 2009, the Department of Health has mentioned the guidance that patients while availing care in the NHS are allowed to avail additional private care through their own payment. For this, no changes in their NHS care and support is to be made as it would contravene the key founding principles of the NHS which is to offer free healthcare under all condition to patients (, 2018).


The above discussion informs that Adam has planned to open a private healthcare clinic with investment from James and assistance from Alex and Paul. However, Adam is facing fear of making financial loss due to he is avoiding to act as corporate promoter of the business. Adam to act as promoter of the business is to follow roles such as designing the business framework, arrange detailed investigation to develop idea with the help of experts, develop preliminary contracts and others. Since the clinic is going to be Private limited organisation, Adam does not have to bear enter debt of the organisation but the part of his share only. Moreover, Salomon vs A Salomon case informed that promoters are protected from liability and rights of company failure when it is an incorporated organisation. The ethics issues in context to NHS faced regarding patient choice is hindrance in protecting confidently, managing beneficence and others. The Health and Social care Act, NHS Act 19477 and Private Patient Policy in the UK are found to be the law that dictates the way patients transfer from NHS to private is to be managed and operated.


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