English Legal System and Company Law

The provided assignment delves into the English legal system, covering sources of law such as Civil law, employment law, European Union law, and contract law. It also examines the impact of these laws on organizations, including consequences for non-compliance. A case study is included to illustrate director duties and company formation processes, highlighting the importance of registering with Companies House and providing necessary information. Additionally, alternative dispute resolution methods like mediation are discussed as a way to settle disputes without legal proceedings.

BUSINESS LAW

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
The nature of The English legal system ................................................................................1
TASK 2............................................................................................................................................4
a) Advise for Bony and Tony to form Company and their responsibilities as directors.......4
b) Advise to Patrick about the issue, relevant law, application of facts ................................5
c) Advise in regard to taking up the position in Rivalry firm ..............................................6
CONCLUSION................................................................................................................................7
REFERENCES ...............................................................................................................................1

INTRODUCTION
Business law is also known as commercial law or mercantile law and it governs matter
relating to business. This law provide framework for formation and running the operation of
entity. This study will include the essay on nature of the English legal system. Furthermore, this
study will contain potential impact of law on the business. Moreover, It will suggest appropriate
legal solution for various business problems.
TASK 1
The nature of The English legal system
Legal system refers to the procedure or process of enforcing a law and includes various
rules and responsibilities which the other people have to follow. English legal system is a system
of law that provides different rules and responsibilities that were developed in England. The
legal system provide a systematic, orderly and predictable mechanism to solve conflicts. The
sources of law consist of Legislation, common law, European law, The European convention On
human rights (Beatty, Samuelson and Abril, 2018). Legislation is a law which is crested by the
legislature and includes the act of parliament and the decision of judge does not affect the law of
country.
The legislature which form the legislation is the UK parliament and it is situated in
London. The UK parliament consist of House of lords and House of commons. The House of
common consist of 650 members of parliament and house of lords consist of 800 peers from
which 600 are appointed by the queen on the recommendation of the prime minister. Common
law means the law created by the court (Chaffee and et.al., 2018). These are the law opposed to
those laws created by the parliament. This law is mostly followed in various country as the
decision made by the judge on various matters is final and cannot be changed according to this
law.
European union law is also a source of law as UK is a member state of European union
and so EU law is precedent over the UK law and there are conflicts between the two. The EU
law consist of recommendations and opinions, decisions, Directives and regulations. According
to the European convention human right which is applicable in UK as it is member state of
Europe. The parliament of the UK is having the authority of making law and to amend any
existing law if there are any changes required. The law is enforceable when its becomes the Act
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of parliament and for that Bill is passed through the house of commons and house of Lords after
the bill is passed the ascent of Queen is considered of enforcing the law in the country.
The organization operating their business must follow the legislation that are existing in
the country (Dworkin And et.al., 2018). The companies have to follow the laws which are
required for running the business. The key legislation that new business have to be aware of
include that the business must be aware of the legal system existing in the country and must
perform its various activities according to the laws. Also, the organization have to be aware of
various laws such as employment law, tax laws, advertising and marketing laws, privacy law,
Finance law, contract law, consumer protection law etc. The business in order to start its
operation in the country must have knowledge for the laws existing in that country which will
help the firm in its smooth functioning.
The knowledge of the legal system is required for knowing the various rules and
regulation which may affect the business. New business have to know the legislation relating to
the business licensing and various other laws relating to formation of the business. The
companies operating in UK have to follow the rules and regulation that are required for running
the business legally (Keller, 2018). The new business have to follow the legislation that are
relating to Taxation, advertisement and marketing , environmental regulation etc. According to
the Environmental laws the business must not be involved in the industry which harm the
environment. The organization must provide the products which are Eco- friendly. Also, The
business must have knowledge about the advertising law that includes labeling law which
provide guidelines for labeling of the products.
Also, the business must have knowledge of the laws for trading over internet.
Furthermore, Organization must be aware of licensing laws which are required for starting up a
business. Moreover, the firm need to have knowledge about taxation system and laws which are
applicable in that country. The legal system of the country provide legislation which are
beneficial for the country and for the people of that place (Koutsias and Dine, 2018). Also,
Organization are provided with privacy laws that provide rules and regulations for securing the
data of the employees and customers. Furthermore, Consumer protection law which are made to
protect the customers from harmful effect of products provided by the companies. The
organization have to ensure that the consumers are offered with those products which will not
affect their health.
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There are various laws that have their potential impact on the business which includes
general data protection regulation, Contract law and employment law. The General data
protection regulation has brought important change in data privacy regulation. This regulation
has replaced the data protection directive and is designed to harmonize data privacy laws across
Europe. The main purpose of this regulation is to ensure greater transparency, security and
accountability by data controller. This data protection law will have a great impact on the
business because there will be fines and penalties that will be charged on undertaking in breach
of regulations. Also, it will conduct regular data protection audit and will give sanctions to the
enterprise. It can issue fines of up to 4% worldwide annual turnover of the company or £20
million which ever is greater. With the new General data protection regulation firm will ensure
more data security of the personal data to comply with the regulation as per this law.
Organization operating in UK have to comply with the rules and regulation as per the
employment law. These laws provide rules and regulation for the benefit of employees and to
safeguard them from various effects. Employment law contains framework for treating the
employees equally, minimum wage payment, leave, redundancy and termination of employment
and pensions (Green, 2019). Organization have to comply with the laws and legislation as per the
employment law and if it does not adhere to the laws there are various consequences which may
affect the business such as government can cancel the license for operating a business and also
the firm may have to pay fines and penalties for the same.
According to the employment law the employees must not be discriminated on the basis
of age, gender, religion etc and must be treated equally. Also, organization have to ensure the
health and safety of the employees by reducing the risk of accidents at the workplace. The
company operating in the UK have to comply with the laws and regulation relating to
employment for running the business operations smoothly. Enterprise operating its business
activities in UK must provide its employees with minimum wages otherwise the firm have to
face various consequences for the same. Contract law is an agreement between the two parties
which is created by the mutual obligation that is enforceable by law. The contract law have to be
complied by forming a contract or any business activities.
The organization have to follow the rules and regulation for forming and contract which
is enforceable by law. The law contains the rules and regulation regarding the place of contract.
The parties in the contract law are charged with penalties and fines for breach of contract. The
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contract law have a great influence on the business as if the business is forming a contract and if
it has not followed the rules and regulation as per the contract law will make the contract
unenforceable and there are high charges which will be charged on the parties forming the
contract. According to contract law the contract is formed after the offer is accepted in good
faith. So, It can be identified that there is a potential impact of employment law, contract law
and general data protection regulation as if these laws are not complied than the organization
have to face various consequence and that can leads to closure of the business so it is mandatory
to comply with the law for smooth functioning of company. The English legal system include
the rules and regulation which organizations have to comply for running the business activities.
TASK 2
a) Advise for Bony and Tony to form Company and their responsibilities as directors
It is advised to Bony and Tony to form a company instead of partnership as there are
various benefits in forming a company. As forming a company is beneficial for them because
the members of the company have limited liability as compared to the partners of the partnership
firm. Company is a separate legal entity which is formed by association of people for running the
business activities to earn profit whereas partnership is formed by two or more partners they
have the responsibility for managing the business (Williams, 2018). Also, It is beneficial to form
a company as it tend to create more professional image of the business. Moreover, the company
is having a separate legal entity which assist the members from insolvency. Bony and Tony
must form a company instead of partnership as it will give them more advantages than the
partnership firm. Companies enjoys tax benefits which partnership does not have. On the
contrary , partnership firms have unlimited liability b as the partners are jointly and individually
liable. Also, They have limited resources as there are restriction on number of partners which the
company does not have.
The process of forming a company
The formation of company is done by Companies House which is the part of UK
government and is responsible for registering the business in UK. For registering the company
with Companies House the following information is required :
 The name of the business : The name must not be the same already existing in market.
 Address : Need to provide registered address for the business.
 Directors : It is required to have a director either one or several.
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 Details of shares and shareholders: It means providing copy of memorandum and articles
of association.
 SIC code : It is required to identify the type of business the company will undertake. It
stands for standard industrial classification
 Registering the company : After all the details are provided regarding the company after
which the company is registered with the Companies house and then the certificate of
incorporation is issued which include the company number and date of formation.
 After this company have to register with the corporation tax within 3 months from the
beginning of the trading.
Responsibilities of directors
 It is the responsibility of Director to act in accordance with the company constitution that
is memorandum and Articles of company.
 Promote the success of Company to benefit the shareholders.
 It is the responsibility of Director to give independent judgment on various matters.
 Also, It is the duty of Director to avoid conflicts of interest.
 Moreover, Not to accept benefit from Third party.
b) Advise to Patrick about the issue, relevant law, application of facts
Issue
The issue faced by Patrick is that the company is not reimbursing for the traveling and
other expenses for those trips.
Relevant law
The relevant law applicable to the issue includes Employment contract law and Company
Act 2006. Employment contract law is an agreement which is formed for performing other
activities which is not related to being a director (Salbu, 2018). Also, it will include Company
law 2006 which provide guidelines regarding the rights of directors.
Application to facts
In the present scenario, Patrick is in a situation where the company is not reimbursing the
director for the travel expense done by it for the business purpose. According to the employment
contract law the directors is treated as employee and w get the rights of employees but as in this
case the employment contract is absent so, Patrick is not liable for the employee rights. But as
per the company Act , 2006 the director have the right to get reimbursement for the expenses
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paid for business purpose. It is liable for reimbursement of travel expense which are paid on
behalf of company.
Conclusion
On the basis of scenario present in the case it has concluded that Patrick is not liable for
any rights which the employees get under the employment contract as in this case the
employment contract was absent as thus it has not provided with those rights but still as per the
Company act, 2006 there are various rights which the director of company have and according
to those rights Patrick is liable for the reimbursement of the travel expenses and company has to
pay for the same and thus it is the right of Patrick as director of company to claim for
reimbursement.
c) Advise in regard to taking up the position in Rivalry firm
i) Whether Patrick can take up the position
Issue
In the present scenario, Patrick is facing a problem regarding taking up a position in
rivalry firm but the other directors are threatening Patrick to sue if it leaves the organization
before completing 5 years.
Relevant law
The law applicable to the present scenario includes contract law, employment contract
law. According to contract law, the agreement must be formed in written and must be created
with the intention of creating legal relation (Macaulay, 2018). Employment law provide terms
and conditions which are made for the benefits of employees.
Application of law
In the present scenario, The directors of the company cannot sue Patrick as they have a
verbal contract and according to contract law the contract must be in written for legally
enforceable due to this other directors cannot sue Patrick. Also, the employment contract is not
formed between Patrick and the company which provide that It is not bound to any terms and
conditions of the employment.
Conclusion
From the case it has concluded that there was no employment contract between the
company and Patrick due to this there has no terms and conditions in its employment. So,
Patrick can take up the position in new firm and the directors cannot sue Patrick legally.
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ii) Advising both parties to use different legal framework
The different legal framework which the both the parties can use includes Alternative
dispute resolution. It is a procedure of settling disputes without legal proceeding and includes
Mediation which is a collaborative process where a mediator works with the parties to come to
mutual solution without binding any party. Patrick and other directors can use this way to solve
the case where the third part is assigned in which it hears both the parties and come to a mutual
solution to solve the dispute. Also, The party can use injunction where Patrick will be provided
with authoritative warning or order to remain in the company for specific period.
CONCLUSION
From the above study It has concluded about the English legal system which consisted of
different Sources of law such as Civil law, employment law, European union law etc that
provided rules and regulations for various matters. Also, It has concluded about impact of
employment law, general data protection law and contract law that has provided that if the
organization does not comply with these laws it has to face various consequences. Moreover, It
has included the case study which has provided with various duties of directors and process of
formation of company that consisted that for registering the company it has to get registered
through Companies house by providing the various information relating to name, SIC code,
address etc.
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REFERENCES
Books and Journals
Beatty, J. F., Samuelson, S. S. and Abril, P. S., 2018. Business law and the legal environment.
Cengage Learning.
Chaffee, E. C. and et.al., 2018. Panel C: Contract Law & Business Law.
Dworkin, T.M. And et.al., 2018. Assessing the Progress of Women in Corporate America: The
More Things Change, the More They Stay the Same. American Business Law Journal.
55(4). pp.721-762.
Green, M.S., 2019. Assertion and Convention. In The Oxford Handbook of Assertion.
Keller, W. H., 2018. Investigating Student Engagement in Technology-Enhanced Learning at the
Intersection of Business and Law.
Koutsias, M. and Dine, J., 2018. " The Three Shades of Tax Avoidance of Corporate Groups:
Company Law, Ethics and the Multiplicity of Jurisdictions involved”. European Business
Law Review.
Macaulay, S., 2018. Non-contractual relations in business: A preliminary study. In The Law and
Society Canon (pp. 155-167). Routledge.
Salbu, S. R., 2018. Mitigating the Harshness of FCPA Enforcement Through a Qualifying Good‐
Faith Compliance Defense. American Business Law Journal. 55(3). pp.475-535.
Williams, J. L., 2018. System and method for processing and dynamically segregating business
assets. U.S. Patent Application 10/037.505.
Online
What is Alternative Dispute Resolution. 2018. [Online]. Available through
:<https://hirealawyer.findlaw.com/choosing-the-right-lawyer/alternative-dispute-
resolution.html>

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