Business Law

Business Law

Contents
Task 1...............................................................................................................................................3
LO1 Explain the nature of the legal system.................................................................................3
P1 Explain different sources of law.........................................................................................4
P2 Explain the role of government in lawmaking and how statutory and common law is
applied in the justice courts.....................................................................................................6
M1 Evaluate the effectiveness of the legal system in terms of recent reforms and
developments...........................................................................................................................8
Task 2...............................................................................................................................................9
LO2 Illustrate the potential impact of the law on a business.......................................................9
P3 Using specific examples illustrate how the company, employment and contract law has a
potential impact on business..................................................................................................10
M2 Differentiate between legislation, regulations and standards to analyse potential impacts
upon a business......................................................................................................................12
D1 Provide a coherent and critical evaluation of the legal system and law, with evidence
drawn from a range of different relevant examples to support judgements..........................13
Task 3.............................................................................................................................................15
LO3 Examine the formation of different types of business organisations................................15
P4 Explore how different types of business organisations are legally formed......................16
P5 Explain how business organisations are managed and funded.........................................17
M3 Assess the advantages and disadvantages of the formation of different types of business
organisations..........................................................................................................................18
D2 Critically review and evaluate types of business organisations.......................................19
Task 4.............................................................................................................................................21
LO4 Recommend appropriate legal solutions to resolve areas of dispute.................................21

P6 Recommend legal solutions for resolving a range of disputes using examples to
demonstrate how a party might obtain legal advice and support...........................................21
M4 Compare and contrast different sources of legal advice and support for dispute
resolution...............................................................................................................................24
D3 Evaluate the effectiveness of legal solutions, legal advice and support for dispute
resolution...............................................................................................................................25
References......................................................................................................................................26

Task 1
LO1 Explain the nature of the legal system
Introduction
For the purpose of effective interpretation and understanding of the law, it is important to
understand the intent of lawmakers. Such an intention can be linked to the law sources and can
help in drawing the meaning. In this report, the sources of laws along with the procedure
followed for the enactment of laws are discussed. With reference to the recent reforms and
developments, the effectiveness of Eglish Legal System has also been analysed.

P1 Explain different sources of law
Legal System: The term legal system refers to the process or procedures under which the laws
are framed, interpreted and implemented. The rights and responsibilities of citizens are identified
under the legal system.
Purpose of Law: There are various functions and purposes which are served by laws in society.
Among all the functions performed by law, the principle functions include establishing
regulations and standards, maintaining order, dispute resolution and protection of rights and
liberties (Zander, 2015).
Evolution of Law: The legal system of the UK is based on the foundation of laws developed
over 900 years. During the rule of King William I in 1066, the existing laws were freely
followed by Anglo-Saxons. A centralised system of common laws was established in the rule of
King Henry in 1200. This law is almost the same as the one that prevails in recent times.
Different Sources of Law:
The sources of UK laws can be divided into two main categories including:
National Laws
Legislation: The primary source of law in the UK is legislation. The Parliament in the UK enact
laws and these laws are deemed to be declared by competent authority. It is the only authority
with powers to enact laws in the UK (Hazell and Rawlings, 2015). These are the statutory laws
and are binding on all the citizens and organization in the country.
Types of
Sources
National
Sources
Legislation
Case Law
International
Sources
Internaional
Treaties
EU Laws

Case Law: These are also called precedents. The common law is based on the decisions given
by judges on matters where the law is not clear or there is any ambiguity in the law. The judges,
in all subsequent cases, are required to base their judgements on the previously established
common laws.
International Laws
International Treaties: These are the conventions and treaties which are established between
countries and signed by the Government but these normally become binding only after
ratification. In the UK, the international convention called the European Convention on Human
Rights (ECHR) is applicable with the aim of protecting the rights of its citizens.
EU Laws: The European nations are part of the EU treaty and the laws enacted by the European
Union are applicable on the UK as it is a member of the EU. The laws of Europen Union consists
of directives, decisions, precedents, regulations and treaty provisions.
Key terminologies in the legal system
Civil Law: It is the law area which aims to define and provide protection to private rights of UK
citizens. By way of disputes, legal remedies are offered and areas such as family law, contracts,
torts, and property law are covered in civil law (Birkland, 2015).
Criminal Law: It is the law area which aims to protect society from crimes. It protects people
from conduct that is harmful or threatening or which may cause any injury.
Civil law vs criminal law
Under criminal laws, the matters which are taken as an offence against the people in society are
dealt with and in civil laws, the matters that are violation of private rights of an individual are
dealth with (Hazell and Rawlings, 2015). The cases in civil law are filed by private parties
whereas in criminal law, the cases are filed by Goevrnment.
The Justice system: It is the system responsible for interpretation of laws and their application
in the name of State. There are various authorities such as judges, lawyers and many more who
work in the judicial system and help people resolve their disputes.

P2 Explain the role of government in lawmaking and how statutory and common law is
applied in the justice courts.
In the process of law making, the primary role of Government is to present a bill in Parliament
after analysing the problems that may need a law. Such bill may be both public or private. Public
bills are the bills containing matters that concern public at large and Private bill contains the
matters of private interest.
Law making Process
Stages Process
First Stage The title of the bill is announced to the members of Parlaiment.
Second Reading A discussion is carried out among the members of Parliament in
relation to the contents of proposed bill and the amendments are
proposed.
Committes Stage The proposed amendments are introduced in the bill and the members
carry a debate on the contents (Zander, 2015).
Third Reading In this stage, the bill is finally voted upon by the members and any
recommended cahnges are introduced.
House of Lords Here, the Members of House of Lords assess the contents of the bill
and if any changes are recommended, then the bill is sent back to
House of Commons for approval.
Royal Assent After final approval of both the Houses, the bill is sent for the Royal
Assent. After the approval of Monarch, the bill becomes law.
Application of Common and Statutory Law
Common Laws: When deciding the cases, the judges refer to the decisions of pervious case
laws, if any, of similar nature and are bound by those decisions.
Statutory Law: The rights and liabilities of people are established under statute and the judges
use these laws to determine the righst and liabilities of parties to dispute and provide them
punishments accordingly (Birkland, 2015).

Organization of Judiciary
Topic: Organization of Judiciary
Source: (Birkland, 2015).

M1 Evaluate the effectiveness of the legal system in terms of recent reforms and
developments.
In terms of recent reforms and developments, digitalisation in Judicairy is the most significant.
With the introduction of digitalisation in English Legal System, the efficieny of courts has been
incraesed. The citizens are now able to approach the court in a more effective and efficient
manner (Zander, 2015). The process of courts is speedier and the disputes are being resolved in
a time efficient manner. Therefore, it is a remarkable achievement for the judicial system in UK.
Conclusion
The English Legal Sytem has deribed its laws from various sources and these laws are applicable
on organoztaions and people in order to provide them protection, and protect their rights and
interests. The Parlaiment enact laws and the UK laws and system believes in reforms and
therefore it is an effcetive system.

Task 2
LO2 Illustrate the potential impact of the law on a business
Introduction
In the following section, a discussion on the significance of company, contract, and employment
is done. In addition to this, the significance and their impacts on the business organisation are
also discussed. A small discussion on the difference between legislation, standards, and
regulation is provided.

P3 Using specific examples illustrate how the company, employment and contract law has a
potential impact on business
The Company Act 2006 was passed by the Parliament of the United Kingdom as the primary
source of law. It is the longest Act formulated by the UK in its history with over 1300 sections
conglomerated in 700 pages. The Act has superseded by the new Corporation Tax Act of 2009.
The significance of the Act is that it aims at modernising and simplifying company law,
codifying the duties of the directors of the company, granting enhanced rights to stakeholders,
and simplifying the administrative burden carried by the organisation operating in the UK. The
significance of the act is that it sets the director's duties as described in section 171 to section 177
(Collison, et.al, 2014). However, the directors do not give a focus on responsibilities that results
in a great negative impact on the economy and the rate of the growth of the company. The first
and foremost duty is that directors need to act within powers. The director is required to carry out
the tasks that are required to be completed by them. This is stated in Section 171 of the Company
Act 2006. The next duty is exercising independent judgement. The director is required to carry
out fiduciary duty by making use of their powers without getting influenced by other people. An
example of such duty is Fulham Football Club Ltd. v Cabra Estates plc, where the directors did
not make use of their powers.
Talking about the Employment Law, it is quintessential to safeguard the rights of the employers
and employees. In addition to this, it provides responsibilities to the employers towards their
employees. It is an Act that makes provisions for statutory rights to adoption or paternity pay and
leaves, maternity leave and pays (Painter and Holmes, 2015). In addition to this, it also acts as an
instrument to make changes in Employment Tribunals Act of 1996 and make use of statutory
procedures in the context of employment disputes. Furthermore, the act makes provision to make
a compromise agreement. It also assists in making changes in the Employment Rights Act of
1996 and makes changes in provisions about fixed wages and working hours. It obligates the
employer to
The significance of contract law is that it mandates the employer to formulate a legal binding
contract at the time of offering jobs to the employees. The contract must include those terms and
conditions that are important and beneficial for both employers and employees (McKendrick,
2014). This condition might be related to the working hours, duties, employment tenure,

appraisal guidelines, working hours, and responsibilities, grounds and condition to expel. It also
comprises the penalties in case of breach of contract.

M2 Differentiate between legislation, regulations and standards to analyse potential
impacts upon a business.
It is a well-known fact that businesses in today’s time operate in a very intricate environment
which is often intensive and full of regulatory constraints. There are some regulations,
international and national standards, and legislation. For every organisation, it is important to
understand the difference between the three terms, namely regulation, standards, and legislation.
The first and foremost is regulations that are enforced by some regulators. These are basically the
rules that are followed by the company. Regulations might be very challenging for the company
as they obligate the firms to keep control over its procedures and workforce skills sets (Painter
and Holmes, 2015). Legislations are usually formed by the government after a parliamentary
session. Legislations formation is the part of law-making. Legislations influence the structure of
the firm and its functioning. It obligates employers to conduct a process of risk assessment to
ensure a safe and healthy working environment. In addition to this, it enhances and strengthens
the firm against any discrepancy that might affect the organisation in the future. In simple words,
legislation discards any uncertainties and fill-factor that might affect the working environment of
the company.
Talking about the basic difference between the three terms, the regulations and standards are
very beneficial for the majority of the companies, especially those that are of small scale. They
may result in an increase in the operating cost for a short duration. However, in the long run,
these might be beneficial for the company. According to Painter and Holmes (2015), it has been
seen that regulations act as a double-edged sword. These might have positive sides as well as
negative sides for the company. It depends on the type and scale of the company and they help in
minimising the legal consequences that might occur in the future.

D1 Provide a coherent and critical evaluation of the legal system and law, with evidence
drawn from a range of different relevant examples to support judgements.
Among all the legal system, the English Legal System is the most efficient one that ensures that
justice should be given to all the strata of the society irrespective of their race and religion. The
UK's government has taken many steps to provide justice to all. For that purpose, it launched an
Exceptional Case Fund Scheme. It provides funds to poor people have no or little money to fight
a court case. Another feature of the legal system of the UK is that it is quite flexible and
powerful at the same time. The legal system of the UK is open to making changes as per the
requirement of the law and order. It governs the human as well the corporate entity and their
functioning. It comprises some Acts and legislation that serve the basis of the functioning of the
companies. These are the Company Act of 2006, GDPR of 2018, Equality Act of 2010, and
Employment Act of 2002.
The English Legal system is full of laws and legislation that are efficient in resolving the
disputes affecting the business operation. For a better understanding of the English legal system,
O'Brien v Bolton St Catherine's Academy [2017] IRLR 547 CA. In this case, Ms. O'Brien
was fired illegally from the company as she was ill for a very long time. The case was related to
discrimination and unfair dismissal. The court found the company guilty in this case based on the
terms given in her contract.

Conclusion
In this section, an understanding of laws and legislation has been explained in the context of
some examples. The contract law and employment had been elaborated and the importance of
the English Legal System was also elaborated. At last, the difference between regulations,
standards, and legislation had been explained.

Task 3
LO3 Examine the formation of different types of business organisations
Introduction
In this section, a discussion on the types of business organisations and how they are formed is
done. In addition to this, a critical analysis of each business type is done, wherein advantages and
disadvantages of each business are enlisted.

P4 Explore how different types of business organisations are legally formed.
There are two types of business structure, namely incorporated and unincorporated that are
distinguished by their ownership title. The former is an individual business entity while the other
is a part of the business similar to a sole proprietorship or partnership (Mazzucato, 2015). Mr.
Jones can enter in the UK by forming a business in the following ways:-
Company: This type of business is usually established under the Companies Act of 2006, where
the company’s board of directors handles the majority of the operations. Due to this act, the
powers and duties of the board of directors are well-defined and they are required to operate
within those powers. There are two categories in this, namely the private and public company.
The shareholders have real control of the organisation.
Private Limited Company: In this type of business, there is a limit to the liability of a
shareholder. In addition to this, the general public can purchase the organisation's share. This
business has a plethora of opportunities and the business can start with an easy process. In this
business, the shareholders have very limited freedom to transfer the shares.
Sole Proprietorship: In this type of business, the company is responsible for its operations and
do not share its profits and losses along with all liabilities. There is only one owner that runs all
the businesses.
Partnership: It is the business type, wherein two different business entities share the profit after
entering in the contractual obligation. In addition to this, the organisation shares its resources and
losses too (Mazzucato, 2015).
Recommendation: As a client, Mr. Jones is advised to enter in the UK by forming a private
limited company as it is easy to form and enter the market.

P5 Explain how business organisations are managed and funded
The business organisations are well-managed and operated by different stakeholders, such as
managers, leaders, employees, the board of directors, etc. Each one of them has well-defined
roles and responsibilities that are required to be performed in an ethical manner and as per the
norms and regulations set by the government (Posner, 2014). In addition to this, every business
entity requires funds and that are provided by shareholders, investors, and sponsors. In order to
determine the net effect of the business, funds play a great role in this. A business can arrange its
funds from numerous sources, such as business entities, government, loans from banks,
shareholders, etc. In addition to this, some small firms merge with large firms in order to get
huge resources and funding (Mason and Harrison, 2015). This is the practices that are widely
followed when an international company wants to invest in overseas markets. The organisation
can arrange their funds by taking loans from banks on short, medium, and long-term basis. Many
a time, the funds are raised by issuing a debenture.

M3 Assess the advantages and disadvantages of the formation of different types of business
organisations
In the previous parts, the different typology of business entity and their formation had been
discussed. It is important to note here is that each of them has their positive and negative sides.
These have been discussed here:-
Company
 Advantages: The shareholders enjoy limited liability and the business entity can have any
number of shareholders.
 Disadvantages: The business might take a lot of efforts to operate, especially in the
international market (Singh, 2012).
Private Company
 Advantages: It is best suited for the short as well as a long-term basis due to its flexibility.
 Disadvantages: The major downside is that transferring the shares is not a cakewalk.
Sole Proprietorship
 Advantages: The complete profit comes in the hand of the business owners and there is no
share in the authority. Disputes are very less (Singh, 2012).
 Disadvantages: In the case of business failure, the loss has to be borne by the owner only
and he might leave under huge debts.

D2 Critically review and evaluate types of business organisations.
There are various forms of business organisation as discussed in the previous question. Each has
its upsides and downsides. Talking about the company, it has limited liabilities and obligations
on the shareholders. The transferring of the shares is a bit easier than other forms of business. In
addition to this, the shareholders can be employed within the same organisation and such
organisation is free to trade anywhere in the same country. On the other hand, there is less
secrecy in such business types as the accounts are public and profits are required to be shared
among shareholders. Talking about sole proprietary, there is no need to share the profits and the
control is in the hand of the owners. On the other hand, liability and obligations are high in such
business forms. The risks are high but the ROI is high as well. The owner is the ultimate boss of
the business. In case of business failure, the loss has to be borne by the owner only and he might
leave under huge debts.

Conclusion
In this section, a thorough discussion of the types of business forms had been done and their
advantages and disadvantages were also outlined. Each business form was critically analysed in-
depth.

Task 4
LO4 Recommend appropriate legal solutions to resolve areas of dispute
Introduction
This part of report is presenting the dispute resolution methods and the parties to dispute have
been provided with appropriate recommendations. The various methods of dispute resultion and
the sources of legal advice have also been discussed.

P6 Recommend legal solutions for resolving a range of disputes using examples to
demonstrate how a party might obtain legal advice and support.
Methods of dispute resolution
Traditional Method
The traditional method of resolving the dispte is court process. Any claim can be made in court
in order to resolve the dispute. The dispute shall be resolved by judicial authorities by referring
the relevant case laws. The decisions of judges are binding but this process is expensive and time
taking (Blake, et.al., 2016).
Alternate Dispute Resolution (ADR) Methods
These are the methods under which dispute can be resolve outside court in a time and cost
effective manner. The methods includes the following:
Arbitration: An arbitrator is appointed to resolve the dispute between parties. He is an
idependent person who may be an expert of subject. He hears both the parties and decide the
matter. His decision is binding, unless appealed in a court of law.
Mediation: A mediator is appointed to resolve the dispute between parties. His main aim is to
ensure that the parties communicate effectively and resolve the dispute mutually. He does not
actively participate in the dispute resolution (Goldberg, et.al., 2014).
Conciliation: A conciliator is appointed to resolve the dispute. His main aim is to resolve the
dispute by suggesting alternate solutions or options available to parties to dispute.
Negotaition: A negotiator is a person appointed to help the parties in arriving at a solution by
way of negotitating with each other.
Case 4.1
In the given case, Sarah is nt being able to perform well due to her personal reasons. She can
surely not be promoted but due to her changing behaviour, she is also being given a warning for
dismissal. Based on Section 95 of Employment Rights Act, 1996, an employee shall have a right
to not be dismissed from employment without any prior notice. If an employer wants to dismiss
the employee, he must give a notice to employee. Taking support of this section, the HR of

organization can warn Sarah in relation to her performance and behvaiour and may give a
warning for termination (Lyddon, 2015).
Further, if any dispute arise in future with reference to the case of Sarah, the company may
resolve the matter with help of an arbitrator.
Case 4.2
The dispute in the given case relates to the principles of contract law. The dispute between the
parties realte to the exchange rates. Romanov suffered a loss of approximately 10% of the value
he was expecting and therefore, he wants to pursue any legal actions against the UK firm, hemay
consider the options of Alternate Dispute Resolution (ADR). Under ADR, he may resolve the
dispute through arbitration, mediation, conciliation or negotiation. However, in the given case,
he may use the method mediation as the dispute clearly indicates lack of communication and
therefore mediator can help the parties in communicating with each other and resolve their
disputes.
Sources of Legal Advice
The parties to dispute can obtain legal advoice from various sources including
Solicitors: Any organization or an individual may obtain legal advice from the solicitors. These
are the legal practitioners who reprsent their clients in judicial courts and provide them with the
leagl advice.
Law Centres: These are the organizations which aim to provide legal advice to people in UK.
These are the non-profit organizations and they help the persons who cannot afford to hire a
lawyer. These organizations are independent and are accountable to only the communitis for
which they operate.
Citizen’s Advice: It is an independent charities network whose main aim is to provide the
citizens with legal advice and they keep the matter of their clients confidential. The people
associated with these networks help people in resolving matters relating to money or other legal
issues (Emir, 2018).
Pro Bono Legal Help: This is the legal assistence provided free of cost. Such assistance is
provided to people who do not have access to money or authorities to resolve their disputes.

Trade Unions: There are various trade unions who provides free legal assistance to their
members in UK.

M4 Compare and contrast different sources of legal advice and support for dispute
resolution.
The legal advice is UK can be made accessible from various sources. Amongst all those sources,
some of them are free and easily accessible and others are not free. However, there is a common
objective of all the sources i.e. to provide legal advice to people who face any dispute or are
willing to avoid ay dispute. The solicitors are the legal professionals with vast knowledge on the
subject. Their help can be sought but they charge high consultancy fees. As opposed to solicitors,
the other sources such as trade unions, citizen’s advice, pro bono help or law centre are provided
with leagl advice at minimal or no cost. The solicitor has the authority to present his clients in
court whereas others do not have the authority to present themselves or tehir clients in courts.
The methods of dispute resolution are all effective and efficient. However, there are particular
areas where they may differ (Wang, 2014). These areas include time and money consumed, and
the biniding effect. The decisions under litigation process are biding and whereas under ADR,
they may or may not be binding. In addition, litigation process is time consuming whereas ADR
process is time-effective.

D3 Evaluate the effectiveness of legal solutions, legal advice and support for dispute
resolution.
Legal Solution: The recommended legal solution to resolve the dispute in given case is
arbitration. The dispute can be resolved through arbitration as it is a time and cost effective
method and the decision of an arbitrator is bidning on parties to dispute.
Legal Advice: The recommended option for legal advice is law centres. These centres are
effective in providing advices and do not charge fees from their clients. Therefore, it is the most
effective option to seek legal advice (Painter and Holmes, 2015).
Therefore, in given case scenario, it is recommended that the dispute, if any , arises in future, it
can be resolved through arbitartion process. Further, in case any legal advice is needed, it can be
sought from law centres.

Conclusion
From the study of report, it can be concluded that the disputes in UK can be resolved by two
means including traditional court process which is time taking and expensive and ADR process
which is effective, and saves money and time. However, the decision in ADR may not be
binding but it is binding in court process.

References
 Ang, J.S., Cole, R.A. and Lin, J.W., 2012. Agency costs and ownership structure. the
Journal of Finance, 55(1), pp.81-106.
 Birkland, T.A., 2015. An introduction to the policy process: Theories, concepts, and
models of public policy making. Routledge.
 Blake, S.H., Browne, J. and Sime, S., 2016. A practical approach to alternative dispute
resolution. Oxford University Press.
 Collison, D., Cross, S., Ferguson, J., Power, D. and Stevenson, L., 2014. Financialization
and company law: A study of the UK Company Law Review. Critical Perspectives on
Accounting, 25(1), pp.5-16.
 Emir, A., 2018. Selwyn's law of employment. Oxford University Press.
 Goldberg, S.B., Sander, F.E., Rogers, N.H. and Cole, S.R., 2014. Dispute resolution:
Negotiation, mediation and other processes. Wolters Kluwer Law & Business.
 Hazell, R. and Rawlings, R., 2015. Devolution, law making and the constitution.
Andrews UK Limited.
 Lyddon, D., 2015. The changing pattern of UK strikes, 1964-2014. Employee
Relations, 37(6), pp.733-745.
 Mason, C.M. and Harrison, R.T., 2015. Business angel investment activity in the
financial crisis: UK evidence and policy implications. Environment and Planning C:
Government and Policy, 33(1), pp.43-60.
 Mazzucato, M., 2015. The entrepreneurial state: Debunking public vs. private sector
myths (Vol. 1). Anthem Press.
 McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press
(UK).
 Painter, R. and Holmes, A., 2015. Cases and materials on employment law. Oxford
University Press, USA.
 Painter, R. and Holmes, A., 2015. Cases and materials on employment law. Oxford
University Press, USA.
 Painter, R. and Holmes, A., 2015. Cases and materials on employment law. Oxford
University Press, USA.

 Posner, R.A., 2014. Economic analysis of law. Wolters Kluwer Law & Business.
 Singh, P.K., 2012. Management of Business Processes Can Help an Organization
Achieve Competitive Advantage. International Management Review, 8(2).
 Wang, M., 2014. Are alternative dispute resolution methods superior to litigation in
resolving disputes in international commerce?. Arbitration International, 16(2), pp.189-
212.
 Zander, M., 2015. The law-making process. Bloomsbury Publishing.