Business Law and Organization Types

This document provides a comprehensive overview of business law, including its role in maintaining discipline and rules within organizations. It also covers different types of laws, such as company law, employment law, and contract law, and discusses the importance of legislation and the process of passing bills through parliament. Additionally, it explores various types of organizations, including sole proprietorships, partnerships, and companies, highlighting their characteristics and advantages. This knowledge is essential for students and professionals looking to understand business law and organizational structures.

Business laws

Table of Contents
Table of Contents
Table of Contents
INTRODUCTION...........................................................................................................................1
P.1 Sources of law........................................................................................................................1
P.2 Role of government in law making.......................................................................................2
P.3 Company, employment and contract law impact on business...............................................3
P.4 Different types of organization are legally formed................................................................4
P5 How organisations are funded................................................................................................6
P.6 Legal solutions to solve disputes...........................................................................................7
Conclusion ......................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business law is a commercial law that make guidelines, rules and regulation. It is set of civil,
commercials and ethical law. So this law is made for manage of business in organization and
resolve disputes. It has purpose is protected to rights and authority of business (Beatty,
Samuelson and Abril, 2018). This report will be cover that sources of law, role of government in
law making, effect of legal system effect of contract and legal law on business, different types of
organization that legally formed, funded and managed.
P.1 Sources of law.
Many types of sources of laws are present in United Kingdom that some laws applicable in
whole country. Four types of sources of law like legislation, common law, European union law
and European convention on human right.
Legislation :- it is a law that is passed by legislature. Parliament mainly play role in laws and
legislation. London is an only country that pass legislation for four countries. UK parliament
contain two houses like house of common and house of lords. In house of common has 650
members in parliament and all are responsible for particular and specific demographic area. All
Electors give vote to MP to select for constitute. The house of lord has 800 members and 600 of
them are appointed through recommendation of prime minister.
Common law :- legal system of England and wales is common so senior appellate courts take
decision and make laws so it is followed by all business. That means senior judges has to take
decision according to previous judgment for same case. Before making decision judges has to
evaluate all previous cases as well as decision.
European union law :- United Kingdom is a part of European law and it has to follow all laws
of European law. So if UK want to change laws and legislation of their country and make new
amendments so it has to make decision according to European law. It is a source of laws for UK.
European convention on human right :- it is an international human rights that regulate and
apply between 47 states. Through this law ordinary human get basic right and freedom so it helps
in increase democracy in European countries. It is very best source of law in United kingdom
that make rules and regulation for rights of peoples (Davidson, Forsythe and Knowles, 2015).
Statutory law :- it is a source of law that is created by legislature for particular and specific
purpose. It is use by all types of agencies and business because it is made by government.
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P.2 Role of government in law making.
Government play vital role in making law in United kingdom and public bills are passed by
ministers of government. It also has right to change laws and other private bills are also pas by
them. Bills are make and regulate from house of common and house of lord and it includes all
information that is related to law so government make laws about taxation. Following is the
process:-
First reading :- it is a legislation part that firstly reading in both house of parliament that means
government of UK pass any laws and legislation and it reading in both houses in front of all
members.
Second reading :- second reading of bills of law are reading in common house of parliament in
front of all members and they hear. Then they making decision and give vote for bills.
Government bills are not reading in house of lord in second stage.
Committee stage :- bills are come for examination by members of committee stage after second
reading that is completed by common house. Standing committee evaluate bills and it is
evaluated and examine by 16 to 20 members of parliament. Chairmen give vote only at the event
of tie and new member of standing committee is appointed for every new bill. Bills are refereed
to committee of whole house when bills are very important and it passes very quickly. Financial
bills and armed forces bills are divided between committee and standing committee for
evaluation.
Report stage :- at this stage decision of committee has report to whole house in two weeks. It is
a lengthy process because it examines bills and report housing so all members has opportunity to
give any amendments for add in report.
Third stage :- draft of bills is reviewed at this stage and in common house of parliament third
reading is not conduct because this reading is done in house of lord and all process is repeated
that bills examine by both house and passed by them (Allen, Kraakman and Subramanian, 2016).
Royal stage :- it is a last stage and through this stage royal assent is get by queen of the bill and
it declared by both house. Then legislation is listed in parliament. Act of parliament give
authority to government ministers to produce legislation.
Statutory law and common law applied in courts:-
Statutory law means law made by government and legislature for purpose. This law can
create by all types of government like local, state and national. This law is always applicable in
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all over UK like organization, constitution and courts so justice court has to follow statutory law.
Common law is applicable to justice court when any decision are taken by Judges so it has to
evaluate and examine previous reports, cases and decision of senior judges and they have to take
same decision. Common law is applied through it.
P.3 Company, employment and contract law impact on business.
Company law is made in UK in 2006 for make rule and regulation about organization and it is
made by government. It includes many things like rights and responsibilities of shareholders
modify to law of company. Through this law all companies has to follow that operation,
accountability, employees and reward and remuneration. From start of company to winding up of
organization all rules are mentioned in company law. So it has to follow all rules that helps in
mange and maintain discipline.
This law impact on organization that if it wants to change office and any rules and
stakeholders so it has to follow lengthy process that direct affect to business and it performance.
Company laws covered many acts about company and their regulation and operations. For
example :- if company want to change their registered office and corporate office in other are so
it has to follow all mentioned condition and rules so that consume more cost and time. If it
changes their rules about employees quantity so in company law numbers of employees
mentioned and it can not include more than considered employees.
Employment law is made by government of United Kingdom for provide protection of
employees that include many types of act like minimum wages act that law has to follow by all
organization and give minimum wages fix by govt. through this law all worker and employees
get fair wages. Anti discrimination act also has to follow by organization that helps in provide
protection from discrimination and partiality on bases like color, caste, religion. That helps in
motivate to them. Health and safety act very important act of this law and organization has to
provide training to employees that they easily face emergency situation and use tool of safety
related. This law effect on business because through this it has to give fair wages and invest on
tool and techniques for safety of employees. They do not discriminate in recruitment process and
hire all type of people according to their capabilities (Bernaz, 2016).
For example :- company want to hire employees bases on caste and ability so they cannot do
these things and it has to hire disable people also that they can do work.
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Contract law is made by UK government for provide protection to seller and buyer because in
contract minimum two party participate contractor and contractee. Contract includes six elements
like offer, acceptance, consideration, obligation, competency and written instrument. This law
contains all information, rules and regulation for fulfill contract and make valid. This law refers
that contract make valid not void and valid contract create through contractor make deal with
sound mind person and they are capable for understand wrong or right. It effects on business
because in deal of any business both party has to follow all rules like price, purchase and sold of
any product.
For example :- contract between two party follow all rules of this law that helps in
prevent void contract that is created through unsound mind people and minor. So contractor can
not make contract with those persons who are disabled (Perry-Kessaris, 2016).
P.4 Different types of organization are legally formed.
Organization are of many types that is established for fulfill of purpose and meet objective. All
types of organization have legal structure and also complete and fulfill rules and regulations. For
start of new organization many formalities are required.
Sole proprietorship :- this type of organization established by many peoples. These firms and
organization operate by individual and all responsibilities about business carry by proprietor.
Profit and loss occur in organization so it also takes and bear by them. This organization has
need of limited formalities and small amount of capital require for start business and no legal
formation require in it.
Advantage :-
 Sole proprietorship has need of fewer expenses for take ownership because it has not
required any legal formalities.
 It also gets all profit of organization that they earn and decision also easily can take by
individual.
 If individual wants to wind up and dissolve their organization so they can do it without
legal formalities.
Disadvantage :-
 In this organization individual responsible for all things and loss also bear by
individually that increase burden.
 If capital requirement increase suddenly so it is an issue (Rohlin and Ross, 2016).
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Partnership :- it is an organization that create by two or more peoples together for same
objective. Legal requirement is necessary and mandatory between them. Legal agreement
compulsory between them. So partnership deed made in organization and it includes all
condition like profit sharing ratio, capital, roles and responsibilities, rules and regulation that
prevent conflicts and dispute not create. But it legal formation is that registered in partnership act
and if they dissolve organization so they can do with both consent.
Advantage :-
 This organization easy to establish and time invested by partners in improve agreement.
 Members in partnership is more than one so it helps in increase capital of organization.
 Profit direct earn by partners and in business.
 Different types of skills are present in organization because partners are two or more.
Disadvantage :-
 Profit sharing is compulsory among all partners.
 Limited life of partnership because it dissolves due to create conflicts and death of
partner (Campbell, 2018).
Company :- company is an artificial person and it has legal entity. It is a set up for achieve goal
and meet objective of organization. Many types of responsibility of company like pay tax,
borrow money, entering into contract and hire employees. It main purpose is increase profit of
organization. Legal formation is that mandatory to registered in companies act for obtained
certificate. Certificate of commencement require and common sea. Memorandum and article of
association are mandatory to make and approve it and board of director pass resolution.
Advantage :-
 It can issue shares for increase capital.
 Shareholders has limited liability that they do not give guarantee.
 It not winds up and dissolve due to death of member of organization.
Disadvantage :-
 Company has to do more legal formalities so restriction increase.
 Lack of secrecy is major disadvantage of company because all things has to share with
peoples and stakeholders (Puchniak
 and Tan, 2016).
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P5 How organisations are funded
Business organisation cannot operate without the various funds and the funds required to
undertake those operations is known as organisation funds. Moreover, companies frequently
require funds to elevate external investment, or capital, in order to amplify their corporations into
new markets or places, to put money into research & development, or to survive in the
competitive market. Moreover, organizations desire to make use of profits from various activities
of the company to fund such tasks, it is frequently favourable for seeking outside lenders or
buyers. The sole proprietor has a couple of alternatives for extending his budget and reducing
dilution of possession while persevering with to fulfil his financial desires. Moreover, the sole
trader might also utilize his own capital, retained earnings, sale of assets, hire purchase, loans
from banks etc.
Personal Capital : The proprietor invests his own financial savings into his commercial
enterprise for elaboration. Moreover, if a sole proprietor is sure about the future potentialities of
his commercial enterprise may be prepared to invest more capital for the business development
and. Thus, this will save him from the encumbrance of paying heavy interest rate and enable him
to control his business operations (Subramanian and Megginson, 2018).
Retained profit: A successful business generates a higher amount of revenue every year
as opposed to out flowing huge amount of money, thus, a sole trader may also chooses to hold
the profits for commercial enterprise expansion.
Sale of property: This type of fund can be used by the company when a sole trader has no
private capital and retained income and they need to further funding within the enterprise, then in
such case he may decide to sell some of his belongings which is inclusive of assets registered in
the name of the enterprise. Moreover, the proprietor can also hire a workplace and use the sales
return to enlarge his commercial enterprise.
Loans and credit score from Banks: The sole trader can reach a bank or a monetary
institution to go for a loan. which will be inclusive of commercial enterprise loan, a credit line,
credit cards, change credit and a security interest. However, trade credit and credit cards are
favoured via sole investors as those will generally no longer require a mortgage of the business
belongings. Moreover, trade credit score is in general secured towards the money receivable and
the development of operations of the sole proprietor (James, 2016).
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Higher purchase: In this source of fund the sole trader may obtain assets via hire purchase
by paying a percentage of the value as down payment and paying a rent on the ultimate price till
the overall price has been improved. Further, higher purchase provisions are accessible on
acquisition of machinery or comparable belongings.
Families: family and friends can also provide assistance of loans or to acquire a
percentage in an enterprise when the sole proprietor cannot approach other sources of funds.
However, relatives put less rigorous terms and conditions and stay greater flexible regarding the
reimbursement. Further, friends and own family apprehend the risks that are included in the
business and set limitations keeping apart the monetary relationship from the personal
relationship.
Angel buyers : Angel buyers provide funding in trade for an equity stake in the
commercial enterprise. Moreover, Angel investors have a tendency to put money into businesses
that reorient with a specific motive that interests them, along with economic improvement in a
particular location, however also out of an interest in selling small-business tasks. Even though
angel investors attention much less on excessive rates of return, they nonetheless invest with an
expectation of getting yield on an investment (Robertson, 2016).
P.6 Legal solutions to solve disputes
Dispute resolution is the method used to explain various methods for dealing with disputes,
including the choice of approaching the court Moreover, Alternate Dispute decision (ADR), is a
term refers to solving of disputes in approaches aside from going to courtroom. Further,
companies get concerned in lots of varieties of disputes. Thus, With the variety of DR
alternatives available, they can pick out the best technique for managing the particular dispute.
Therefore, there are three methods through which disputes can be resolved:
Negotiation: If two companies disagree with particular activity can regularly come
together to talk about the hassle and reach a mutual decision. Moreover, if companies tries to
solve their issues themselves, they can find out a solution that meets their very own desires and
interests. Thus, solving disputes via negotiation is a part of everyday operations of the
companies. For example, if one companies want adopt advanced production methods and other
company want to adopt traditional production method, thus through negotiation they decide to
adopt both methods on the basis of different products which will prevent disputes.
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Arbitration: when two companies ore involved in a dispute and can not solve the conflict
among themselves, both through face-to-face or with the help of a mediator, then they are able to
comply with the method of arbitration. In arbitration, an impartial individual or panel of experts
hears the issues and troubles and makes a decision on the basis of such issues. Moreover,
Arbitrators are frequently those who are specialists in a specific place of the regulation or a
particular business, specially in cases where the experts needs to be well-educated regarding a
selected issue or companies business activities. For example: If a company approaches the
supplier for certain products and supplier is asking for higher prices of products ,but they both
are not agreeing on certain price thus, in such condition they can go for arbitration method where
experts of panel decides the price of products.
Mediation: companies who are involved in a dispute can resolve its conflicts with the
help of a mediator, an independent and neutral individual, who can resolve their disputes.
Moreover, in some cases the negotiation method is not successful then the mediator can help to
reduce tension and inspire communication among the two companies. Moreover, the mediator
can assist the companies to find out a solution which will leads to win-win scenario, wherein
both the parties are content with the decision of the mediator. For example: Two merged
companies are deciding the prices of their new products but they get involves in the disputes, so
with the help of mediator they decided the price of product and get their conflicts resolved.
Conclusion
From above study it has been summarized that business law play vital role. For pass legislation
government has to sent bills and report to both house of parliament and it is a very lengthy
process. Different types of laws follow by organization like company law, employment law and
contract law that Maintain discipline and rules and regulation it also effects to business of
organization. Organization is covered in this report of three types like sole proprietor, partnership
and company.
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REFERENCES
Books and Journals
Beatty, J.F., Samuelson, S.S. and Abril, P.S. 2018. Essentials of Business Law. Cengage
Learning.
Davidson, D.V., Forsythe, L.M. and Knowles, B.E. 2015. Business law: Principles and cases in
the legal environment. Wolters Kluwer Law & Business.
Allen, W.T., Kraakman, R. and Subramanian, G. 2016. Commentaries and Cases on the Law of
Business Organizations: 2016-2017 Statutory Supplement. Wolters Kluwer Law &
Business.
Bernaz, N. 2016. Business and human rights: history, law and policy-bridging the accountability
gap. Routledge.
Perry-Kessaris, A. 2016. Global Business, Local Law: the Indian legal system as a communal
resource in foreign investment relations. Routledge.
Rohlin, S.M. and Ross, A. 2016. Does bankruptcy law affect business turnover? Evidence from
new and existing business. Economic Inquiry. 54(1). pp.361-374.
Campbell, D. 2018. What is Meant by ‘the Rule of Law’in Asian Company Law Reform?.
In Company Law in East Asia(pp. 11-38). Routledge.
Puchniak, D.W. and Tan, C.H. 2016. Company Law (2015). Singapore Academy of Law Annual
Review of Cases. 2015. p.255.
Subramanian, K. and Megginson, W. 2018. Employment protection laws and privatization. The
Journal of Law and Economics. 61(1). pp.97-123.
James, G. 2016. Family-friendly employment laws (re) assessed: the potential of care
ethics. Industrial Law Journal. 45(4). pp.477-502.
Robertson, J. 2016. Coaching leadership: Building educational leadership capacity through
partnership. New Zealand Council for Educational Research. PO Box 3237, Wellington
6140 New Zealand.
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