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Business Law: A Comprehensive Guide for Start-Ups in the UK

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Added on 2024/06/28

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This assignment provides a comprehensive guide for new start-up businesses in the UK, covering key legal systems and legislation. It explores the origins of law, the role of government in lawmaking, and the effectiveness of the legal system. The assignment also delves into the impact of contract and employment law on businesses, highlighting regulations, legislation, and standards. It examines different business structures, including sole proprietorships, partnerships, non-profit corporations, limited liability businesses, and corporations, analyzing their advantages and disadvantages. Finally, the assignment addresses common business disputes, offering solutions and advice for resolving conflicts.

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BUSINESS LAW
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Table of Contents
INTRODUCTION........................................................................................................................ 3
LO1........................................................................................................................................... 4
P1......................................................................................................................................... 4
P2......................................................................................................................................... 6
M1........................................................................................................................................ 8
LO2........................................................................................................................................... 9
P3......................................................................................................................................... 9
M2...................................................................................................................................... 11
LO3......................................................................................................................................... 12
P4....................................................................................................................................... 12
P5....................................................................................................................................... 13
M3...................................................................................................................................... 14
LO4......................................................................................................................................... 17
P6 &M4.............................................................................................................................. 17
CONCLUSION.......................................................................................................................... 19
REFERENCES........................................................................................................................... 20
2

INTRODUCTION
Business law comprises of all the laws which are used to build and run a business. This
assignment is based on advising the new start-up's businesses about the legal systems as
well as about the key legislation which the start-ups require to know and apply on their
businesses. This will describe diverse sources of laws and elaborate role of government in
making law in the UK. This will also highlight the legal system’s effectiveness for
development and reforms. This assignment will be continued by showing the legal laws
which impact the business and shows the difference between regulations, legislation and
standards based on relevant examples. This will also show how businesses are legally
formed as well as manage and funded by highlighting their advantages and disadvantages.
At last this assignment will recommend the solution for solving the disputes of the
businesses and compare diverse sources to support and advice for resolving the disputes.
3

LO1
P1
Origins of laws have complied with the sources of laws which are the rules for binding to
enable any state for governing its territory. It is important for the organizations to meet the
terms of the regulations and laws made by the government of the UK for so that the
businessman can work effectively (Bowman and Kearney, 2015).
The sources of laws are mainly applied in Scotland, Northern Island, Wales and England.
These are four principal sources of the laws which are to be followed by the start-up's
businesses for their effective working in the UK (Bowman and Kearney, 2015).
Legislation
This gets created by the legislature and comes under the legislation Act of Parliament of the
UK. Legislation has the power of passing the laws which have applied within 4 countries in
the parliament of the UK. The parliament of the UK consists of the House of Lords which
consist of 800 peers and House of Commons consist of 650 parliament members. Legislation
has the purposes to authorize, proscribe, regulate, grant, provide funds, or restricts
(Bowman and Kearney, 2015).
Common law
It is also known as case law or judge-made law and this is a body of law derived as of legal
judgments of courts and related tribunals. The court for common law focuses on the past
precedential judgments of the applicable court and combines the principles of the past
cases which are appropriate to the present facts (Llewellyn, 2016). Judges made this body of
law and get adopted by the process of legislation and regulations which are transmitted by
the executive branch which enforces and executes laws (Llewellyn, 2016).
European Union law
It is a body of contracts, court and law judgements which work along with the legal systems
of the state members of the European Union. The commission of Europe is the institution
which is responsible to ensure the law of EU is getting applied all over the state members.
4

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The European Parliament has 73 members in the UK and EU is based on the rule of law
(Barnard et al., 2017).
European settlement on human rights
The role of the UK is vital for drafting the settlement as the UK is one of the participants of
Europe settlement on the rights of human. The human rights took place in 1998 and it
comes into law under the section (2) (1) (a) which comes into accounts of court. This
includes judgements of the court, declaration, decision and advisory opinion of human
rights European court (Schabas, 2015).
5

P2
Role of government in making laws:
There are so many steps taken by the government in the process of making laws and the
government has divided the process which includes the process of broad voting which
involves the details of the planning and schedule included by the bodies of government
(Zottoli et al., 2019). The lawyers of the civil court have made the laws of bills which can be
offered to the House of the Lords or the House of the Common which are instructed by the
government of the UK. The types of bills are made up by the government which comprises
of public bills, private bills and private member’s bills (Zottoli et al., 2019). For becoming the
Parliament’s Act, these bills have to cross from the different stages in both houses which are
as follows:
 Bills arrive at first reading (Bowman and Kearney, 2015)
 Debate on the key areas and purpose of the bill at the second reading
 At the committee stage, detailed lines with amendments changes and votes take
place for deciding to change (Bowman and Kearney, 2015)
 At the report stage, new amendments are discussed and the votes take place
further to take place for deciding to change
 Tidying up is the third reading and final chance for votes and amendments
 Both the houses consider amendments of others (Bowman and Kearney, 2015)
 At the final stage, the final bill gets approved by the Queen and agreed by both of
the houses, then it becomes Act of Parliament (Bowman and Kearney, 2015)
Application of Statutory law in the justice courts:
Statutory laws are used for defining written laws usually passed by a body of legislation.
These are the laws differs from administrative or regulatory laws which are passed by the
common laws and executive agencies as well as the law created by the decisions of the
court in past (Zottoli et al., 2019). This law applied in the courts strictly as the court is not
able to liberalize its application between the statute liens. The law follows the legislative
process and if the bills get refuses or fail by the executive to sign on it, it can be forward
back to the legislation (Bowman and Kearney, 2015).
6

Application of common law in the justice court:
Common law is invented by the English courts and also called as the case laws which ensure
that the law persisted commonly for all in the world. This is a body of law derived as of legal
judgments of courts and related tribunals (Llewellyn, 2016). The court for common law
focuses on the past precedential judgments of the applicable court and combines the
principles of the past cases which are appropriate to the present facts. The application of
the laws can meet towards the needs of citizens, formalizing the laws and resolving the
conflicts which are assisted by the European Union Law (Llewellyn, 2016).
7

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M1
Legal system effectiveness:
The legal systems of the common laws in the UK have the benefits of particularity and the
responses get developed for responding to the situations of real-life. The parliament
performs the functions of legislation and court performs the function of the judiciary by
solving the disputes lying under the law. Common laws are an important body of law as the
law of Parliament in the legal system (Barnard et al., 2017). A legal system plays an
important role in the statutory as it helps in interpretation which is necessary in solving the
case. Statutes are frequently criticised for the complicated structure and difficult language.
It also has some drawbacks like it is not proactive, reactive and a secondary function for the
development of common law and drawbacks of this law is lack of review.
The legal system has the benefit to render certainty of laws and helps to clients for
rendering advice. It saves time and leads to consistency and fairness. The system is
expensive and complex for the customers which are said to be its drawbacks (Partington,
2016).
Role of law commission:
It is a statutory body which recommends reforms and reviews in the law for maintaining its
fairness. Role of the law commission contains the laws reviews, laws consolidation which
permits laws more manageable and reduces bills in every 5 years. It also cancels out-dated
and needless acts as well as organizes the law by reforming and simplifying the laws
(Partington, 2016).
8

LO2
P3
Several conditions and terms of the employment and contract are used to protect the
employee’s rights which get formulated under the law of employment. The law ensures
compliance by the employees for different regulation and rules of the businesses in order to
avoid the litigation or other lawsuits (Rose, 2016).
Some of the rules generated which impacts on the operations of the business are in context
to the ethics where the business can run in assuring the customers about the health and
safety measures. The small businesses get impacted by laws of company, contract and
employment (Knapp et al., 2019).
Impact of contract and employment law:
For retaining an effective relationship between the employees and the employer as well as
to maintain the safety and protection of the employees, the contract and employment laws
are formed (Rose, 2016). Non-compliances of these laws will draw attention towards the
tribunal and lawsuit actions. The law of employment involves all relevant conditions and
terms, as well as the contracts of employment, depict the hours of working and focuses on
the employee's safety. The contract and employment laws are significant for the cases
related to the accident or incident took place at the workplace which affects the aspect of
employment (Rose, 2016).
Workers compensation
Under the legal obligations as an employer, the workers must be given the fair payments
which come under the Act of Workers compensation. This act covers reporting to the illness,
injuries and other facilities to the workers (Bryson et al., 2016). On the other hand, it also
falls in obligations of the employer that he has to submit the report of the information of
payroll on the time to the Workers Compensation Board for determining the premium
(Bryson et al., 2016).
9

Occupational health and safety
According to this, employers are bound to fulfil the needs of the employees related to
health and safety by ensuring them at the workplace and retain a standard of living as well
as working (Verbeek et al., 2018). It is the obligation of the employers to provide a proper
working environment to the employees and save them from any accidental or hazardous
situation (Verbeek et al., 2018).
Equal opportunities
The employees must be given equal opportunities by the employer for their development in
order to provide equal and fair payment of tax, time offs, annual leaves, bonuses and others
(Barron, 2019). It is the duty of the employer and the management to give proper and equal
treatment to the employees by providing equal opportunities by publishing on the annual
reports as well as on the notice boards within the company (Barron, 2019).
Discrimination and Harassment
This is the obligation of the employer to reduce discrimination and harassment from the
workplace and provide a healthy and positive working environment (Sands et al., 2018). It
also includes distributing the policy of anti-harassment and conduct classes for educating
the employees by addressing the complaints of harassments. The employer also implements
the policies of anti-bullying at the workplace and expects to get discussed and taking action
in any harassment case (Sands et al., 2018).
10

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M2
Regulations: It is the concept of managing the complex system conferring to the set of
trends and rules. The common examples of regulations are the control over wages, prices,
pollution, employment, market entries etc. (Yu et al., 2017).
Legislations: It is also known as statutory law and the bill is known as legislation which
follows the legislative process and if the bills get refuses or fail by the executive to sign on it,
it can be forward back to the legislation (Yu et al., 2017).
Standards: These are classified as government and specification impose by law. It is a
document which established by agreement and approved by a standard body for repeat and
common use, guidelines, characteristics and rules for the activities and their results which
aims to achieve an optimal degree of command in a provided context (Bond, 2015).
Standards are used overly which becomes a problem for the company and with using
widespread it takes the regulation form. Standards are different from regulations and if a
company follows the standards which do not guarantee that the company is in with the
relevant laws. The government appeals on standards when putting documents of guidance
and legislation together. Legislation could change within standards lifetime (Bond, 2015).
The businesses follow the regulations for benefiting the employees as the company must
follow the rules and regulations as well as legislation in the context of the employee’s
welfare and safety (Bond, 2015).
11

LO3
P4
Incorporated business: These are the business which offers benefits to the partnership or
sole proprietorship by providing tax deductions and protection of liability (Henning, 2015).
Sole proprietorship: It is the business owned by an individual or the family members and it
comes among the basic structure of an incorporated business. The owner of the business is
responsible for the payment of tax liability and debt as there is no single lawful entity
(Ostrow et al., 2018).
Partnership: It describes an entrepreneurial venture or any business where 2 or more
individuals’ owners are involved in earning and sharing profit together. The partners can be
corporations, individuals or trust where they share ownership of the business (McCarthy,
2016).
Unlimited liability business: These businesses are the businesses which involve the sole
proprietors and partners who are responsible for the liability and debts of the business.
They are also responsible for the wealth repayment equally (Everhart, 2018).
Non-profit corporations: These come under legal entities which are running for reaching
towards the goals and not for making the profits. They work for the interests and benefits of
the public and some of the corporations’ works with the private industries for raising the
company's funds, subsidising the plans etc. (Butler and Wilson, 2015).
Limited liability business: These are the businesses and the corporate structure where the
owner is not responsible for any kind of liability and debt of the company. These are the
businesses that have a hybrid structure of sole proprietorship and partnership (Ostrow et
al., 2018).
Corporation: It is an organization which has ownership and diverse legal identity which is
measured in the percentage of holding share. The stakeholders of the company have limited
say and limited liability in the operations of the business (Ostrow et al., 2018).
12

P5
This includes managing the funds of the businesses:
Sole proprietorship: These businesses rise their funding by investing an individual basis or
through borrowing from family members as well as their friends or by taking short term
loan. Sole proprietors do not get long term loans as the bank does not allows them because
these businesses are associated with high risk (Ostrow et al., 2018).
Partnership: The businesses carried out by the partners are funded and managed by
themselves in the partnership businesses. Both or more of the owners are responsible for
managing funds of the businesses and the businesses get funds from the investors and
shareholders (McCarthy, 2016).
Non-profit corporations: These corporations raise the funds for operations of their trusts,
hospitals, charities, universities etc. these all get managed by the organization’s main
members. All the members of the organization take care of their operational or daily
activities and it gets managed by them only (Butler and Wilson, 2015).
Limited liability business: This business raises its funds from the means of selling route
equity where the owner of the company sells its ownership to other members of the
business. The business gets managed by its owners as they develop a plan as well as a
presentation for covering the raised funds from the owners. The LLC raises its funds by
adding borrowing money from financing debt, more owners of LLC and loans for small
business (Henning, 2015).
Corporation: The business uses majorly 2 methods for raising and managing funds which are
equity capital and debt capital. Where equity capital is the method used for raising the
funds and the company can raise its funds by selling its shares within the Public (Henning,
2015). On the other hand, debt capital is used for raising funds from bank loans, bonds,
credit cards and personal loans. Under the agreement, this funding type is borrowing money
and this money gets to be later repaid by the company (Henning, 2015).
13

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M3
Some of the advantages and disadvantages of businesses are as follows:
SOLE PROPRIETORSHIP
Advantages:
1. This business gets operated by a single person who is the owner of the company
2. The profit earned by the business comes into the account of the owner only
3. This is the benefit for the owner as he is the only one who has full control over his
business (Ostrow et al., 2018)
4. This is the advantage for others to get employed under the sole proprietorship
Disadvantages:
1. The owner has to bear all the losses of the company which is a drawback for him
2. The sole proprietorship is not sound legally strong
3. Under self-employment, the proprietor has to pay all the taxes of the business
4. The business will continue after the death of the owner and the asset and money
become part of the estate of an individual (Ostrow et al., 2018)
PARTNERSHIP
Advantages:
1. Partnership firms can be formed without any legal formalities as no legal documents
are required for the joint stock companies
2. These businesses are more elastic and flexible as their activities are free from the
legal restrictions (McCarthy, 2016)
3. There is a direct relationship among work and reward as this enables partners to
earn more by putting more labour
4. The risk should be shared among all the partners of the business (McCarthy, 2016)
5. It can be easily get dissolved on lunacy, death or insolvency of a partner
14

Disadvantages:
1. In a partnership, there is always a chance of lacking harmony and peace in between
the partners which result in lack of management, decrease in profit, dishonest
dealings etc. (McCarthy, 2016)
2. It is unstable, as it gets dissolved by lunacy, death or insolvency of partner as well as
the lack of trust also results in dissolving the partnership
3. The debt liabilities of partners are unlimited in the business
4. There is a restriction over transferring the interest to the other party
5. After the retirement of the partner, he is liable to continue his performance of his
acts (McCarthy, 2016)
NON-PROFIT CORPORATIONS
Advantages:
1. The income of non-profit organizations is exempted from income taxes
2. The corporations get the donation from the donor which also exempted from taxes
3. These receive aid or grants from the businesses in order to raise their funds
4. The employees get benefits in terms of insurance and discounts which helps in
motivation and satisfaction (Butler and Wilson, 2015)
Disadvantages:
1. It requires time as well as money for starting non-profit organizations and this also
requires devoted work and months of arrangements (Butler and Wilson, 2015)
2. These corporations have to submit yearly fillings and comply with incorporation laws
3. It gets difficult to arrange the funds because of the high competition in receiving the
funds from the grants and donors
4. Sometimes the volunteer is not able to manage and leave the corporation without
informing (Butler and Wilson, 2015)
LIMITED LIABILITY BUSINESS
Advantages:
1. The incomes of the owners are their own and taxes get exempted
15

2. The money and fund get easily allocated by the owners for investing in the business
3. The companies are easy to form and there is no requirement of annual meetings
with the board of directors or a strict book to follow
4. The owners are not responsible for the liability and debts of the business
Disadvantages:
1. These are said to be more expensive by comparing to the sole proprietorship and
partnership because it takes more time to find the capital sources and investors
2. Ownership cannot get transferred easily with a corporation as it has government
rules and regulations
3. The lack of case law in these businesses as has a limited life
4. It is hard to understand the requirements of the states
CORPORATION BUSINESS
Advantages:
1. The stakeholders have limited liability in the business and are liable up to their
invested amount
2. The sources of funds and capital get raised by issuing bonds and selling shares
3. It is difficult to sell shares for the shareholders in a corporation
4. It has unlimited life since passing of ownership to generations of stakeholders
Disadvantages:
1. The tax paid by the company on the income as well as by the shareholders becomes
double taxation
2. Paperwork is required for the excessive filling of taxation
3. The business can be managed and operate by the management team without any
real omission from the owners
4. The board of directors of the company are responsible for the company’s
administration which can get decided in the general meetings which take times and
results in delay
16

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LO4
P6 &M4
Disputes are very common in the business whether it is large or small which are legal
disputes. A small business faces issues like disputes with the customers, tax issues, employer
and employee dispute, conflicts with government and so on. All are the issues which
conduct disputes within a business that results in the conflicts, loss in profit and it also
affects the relationship (Blair and Marcum, 2015). Following are the disputes:
Employer and employee dispute:
This dispute may occur due to unfulfilled needs, discrimination, employment termination,
protection of data of employee, leaves and benefits provided to the employees (Cox and
Harg, 2018).
Government regulations:
The regulations of anti-business laws affect the small business where the company has to
follow the rules for trading which result in conflict.
Disputes with clients and customers:
Dispute with clients and customers also affect the business as they are said to be the king of
the market and company sells its products to them and the dispute affects the sales as well
as a profit of the company (Carey, 2018).
Tax and accounting issues:
The small businesses also face the issues related to accounting and taxes because of the
poor planning, delays in start-ups, the occurrence of unexpected expenses etc. (Everhart,
2018).
Other issues:
The businesses also face the problems which result in disputes in the small business that are
due to an increase in quality staff, expenses of owners and overreliance on credit.
17

These are the issues which needed to be getting resolved of the small business. For
statutory and government violations the small businesses need to pay fines and if they are
not able to do so, their license will be suspended for a definite period of time. For example,
this can be done if the company fails to fill the taxes and not following the government rules
and regulations (Carey, 2018).
For disputes between employer and employee, the small business has to file a document
based agreement which must be signed by the employer and the employee and the
document is about the detail of the terms and conditions of the employment under the
employment act 2002 in the UK (Cox and Harg, 2018).
For a dispute with the government, if the small businesses want to retain in the market they
must take care and follow the laws and regulations of the business made by the government
(Cox and Harg, 2018).
For these disputes, the small business must take help from legal advice or legal action. The
legal advice for dispute offers mediation, negotiation and arbitration services for solving the
issues with the help of barristers. The legal actions take time to solve the conflict or dispute
as it involves making enquiry of the dispute, assessing the situation, contact with a lawyer
and get obligations (Singer, 2018). The disputes can get solved easily if the company allows
the employers and employees to perform their tasks by sharing their view and difficulties
with each other, by following the government laws and regulations, learn to handle the
customers as well as learn to manage the resources for funding and deals with taxation and
finances of the company (Singer, 2018).
18

CONCLUSION
Therefore, business laws are very important for different types of businesses which have
shown in the above assignment as this was based on advising the new start-up's businesses
about the legal systems as well as about the key legislation which the start-ups require to
know and apply on their businesses. This assignment has described diverse sources of laws
and elaborated the role of government in making law in the UK. This has also highlighted the
legal system’s effectiveness for development and reforms. This assignment has shown the
legal laws which impact the business and the difference between regulations, legislation and
standards based on relevant examples. This has also shown businesses get formed legally as
well as managed and funded as this assignment has also highlighted its advantages and
disadvantages. By concluding this assignment it has recommended the solution for solving
the disputes of the businesses and has compared diverse sources for advising and support
to resolve the disputes.
19

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REFERENCES
 Barnard, C. and Peers, S. eds., 2017. European union law. Oxford University Press
 Barron, S., 2019. Equal opportunities policy
 Blair, E.S. and Marcum, T.M., 2015. Heed our advice: Exploring how professionals
guide small business owners in start‐up entity choice. Journal of Small Business
Management, 53(1), pp.249-265
 Bond, T., 2015. Standards and ethics for counselling in action. Sage
 Bowman, A.O.M. and Kearney, R.C., 2015. State and local government. Nelson
Education
 Bryson, A., Clark, A.E., Freeman, R.B. and Green, C.P., 2016. Share capitalism and
worker wellbeing. Labour economics, 42, pp.151-158
 Butler, R. and Wilson, D.C., 2015. Managing voluntary and non-profit organizations:
Strategy and structure. Routledge
 Carey, P., 2018. Data protection: a practical guide to UK and EU law. Oxford
University Press, Inc.
 Cox, M. and Harg, R., 2018. The ethics of settlement negotiations in employment
disputes. Brief, 45(11), p.28
 European law, 2019 online available at https://definitions.uslegal.com/e/european-
union-law/ last accessed on 25 May 201
 Everhart, J.R., 2018. Unlimited tax liability: a common misnomer of limited liability
company taxation in the United States. Small Business Institute Journal, 14(1), pp.44-
51
 Henning, J.J., 2015. Identifying the structure envisioned for closely held incorporated
business entities under the new statutory dispensation. Journal for Juridical Science,
40(1_2), pp.19-34
 Knapp, C.L., Crystal, N.M. and Prince, H.G., 2019. Problems in Contract Law: cases
and materials. Wolters Kluwer
 Llewellyn, K.N., 2016. The common law tradition: Deciding appeals (Vol. 16). Quid
Pro Books
 McCarthy, J., 2016. Partnership, collaborative planning and urban regeneration.
Routledge
20

 Ostrow, L., Nemec, P.B. and Smith, C., 2018. Self-employment for people with
psychiatric disabilities: Advantages and strategies. The journal of behavioral health
services & research, pp.1-11
 Partington, M., 2016. Introduction to the English legal system 2016-2017. Oxford
University Press
 Rose, E., 2016. David Cabrelli, Employment Law in Context
 Sands, P., Oaks, K. and O’Rourke, K., 2018. Policy on Harassment, Discrimination, and
Sexual Assault 1.0 Purpose. Policy, 2, p.12
 Schabas, W.A., 2015. The European convention on human rights: a commentary.
Oxford University Press
 Singer, L., 2018. Settling disputes: Conflict resolution in business, families, and the
legal system. Routledge
 Singer, L., 2018. Settling disputes: Conflict resolution in business, families, and the
legal system. Routledge
 Verbeek, J.H., Palmgren, H., Shiri, R. and Serra, C., 2018. Changes in occupational
health and safety service arrangements for increasing the uptake of preventive
services in small companies. Cochrane Database of Systematic Reviews, (11)
 Yu, Y., Miyaji, A., Au, M.H. and Susilo, W., 2017. Cloud computing security and
privacy: Standards and regulations
 Zottoli, T.M., Daftary‐Kapur, T., Edkins, V.A., Redlich, A.D., King, C.M., Dervan, L.E.
and Tahan, E., 2019. State of the States: A survey of statutory law, regulations and
court rules pertaining to guilty pleas across the United States. Behavioral sciences &
the law
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