Business Law: Sources, Impact on Business, Legal Formation and Dispute Resolution

This report covers the sources of business law, its impact on businesses, legal formation of business organizations, and legal solutions for resolving disputes. It discusses employment law, contract law, and company law. The report also provides recommendations for resolving disputes through out-of-court settlements.

Business Law

Table of Contents
INTRODUCTION ..........................................................................................................................3
PART 1 ...........................................................................................................................................3
Different sources of the laws.......................................................................................................3
Role of government in making laws and application of statutory and common law in justice
court.............................................................................................................................................4
Potential impact of various laws on business..............................................................................6
Legal formation of business organizations.................................................................................7
How businesses are funded and managed...................................................................................8
PART 2............................................................................................................................................8
Recommend legal solutions for the range of disputes................................................................8
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
A business is an entity which has a sole purpose of earning profits and raising the living
standard of the people by offering them quality products and services. The law for business is
evolving continuously with some new areas of laws that develops in relation to the consumer
protection, computers, internet and competition. It mainly governs what happens with the
commercial matters and covers many legislations under its ambit such as employment law,
consumer goods sale, immigration law, intellectual property and many others (Luts and et. al.,
2021). This report is split into two parts, first of which will deal with nature of legal system,
impact of business laws and formation of various business organizations. The second part shall
cover different legal solutions for resolving disputes.
PART 1
Different sources of the laws.
The English legal system is a common system of law that combines passing the
legislation by the supreme law making authority and creating the precedents by case laws. There
is no written Constitution in UK so the principles of it are enumerated in different statutes and
case law precedents such as Human Rights Act is a statute which offer fundamental rights to its
citizens while rule of law, separation powers are principles coming from precedents made by
judges. Various sources of laws are-
Primary
These are the authoritative and the original statement of the laws and these are made by
such authorities which have power to make laws. These govern and regulate the functioning if
the state. Various primary sources are enumerated below- Case laws: It involves the judgement and decision of the courts in the case which are
published in law reports. These are the primary and fundamental source of law in UK. It
carries the facts of case, issues and the judgement together with legal principles on the
basis of which decision is brought by judiciary. Legislations: As there is no written Constitution in UK and it is often described as wholly
codified and partly written. These laws came in the form of statutes that is applied in
whole nation. The Parliament is supreme authority to enact the law and these are

considered as supreme and cannot be challenged in any court (Mili, Gharbi and Teulon,
2019). Treaties: These are the main source of international law which consist agreement
between two or more of the states which is intended to be binding on them at the
international law.
 Directives: It is the legal act of EU that requires the member states for achieving the
specific result without dictating any meaning of achieving it. It is first to be made in
national law by the member states.
Secondary
These are commentaries on law and are mainly reference to legislations in order to bring
clarity to the legal concepts. Secondary sources of laws are discussed below- Legal encyclopedia: These are considered as the excellent way to beginning the research
on the law as it provides the key points, laws and the cases. These are written by the
lawyers or in consultation with them. Parliamentary and non Parliamentary publication: AS it is very essential to bring the
understanding in the background of how a law is created or to understand the discussion
on particular law area. It includes debates of member of Parliament while making laws,
command papers, etc. Law journals: These are the academic arguments which covers the specific as well as
general area of law as its main aim is to bring update on law. It is the mix of case
commentary and articles which brings detailed understanding on legal issues.
 Textbooks: It is the best way to begin the research on any legal topic as it is written by
the academicians for the student so that they can have understanding on the laws and
legal issues (Kucko, 2017).
Role of government in making laws and application of statutory and common law in justice
court.
The supreme authority to enact the law rest in the hands of Parliament as they have power
to make laws. They make the laws which cannot be challenged in any court. Basically a bill is
drafted at initial level of the new law or a change is initiated in existing law which is presented in
Parliament in either house. The following is the stages which describes the law making process-

 First reading: this step involves arrival of the bill in either house and the name of bill is
read in chamber. Second reading: It involves debates on key areas and the objectives of bill. A discussion
is initiated by members on specific area of bill wherein the changes are required. Usually
no votes are taken at this point. Committee stage: Here the scrutiny of the bill is done in detailed manner and changes are
suggested. The members begin from starting and work to the end. Votes are taken by the
members in order to decide on whether the changes are to be brought or not. Moreover,
there is no limitation of time in this step. Report stage: An another opportunity is provided for examining the bill and changes are
made. The amendments are debated and votes taking is done in order to make decision on
whether changes are to be adopted or not. Third reading: It is also called as tidying up step as its main aim is to close the loopholes.
The final chance to bring amendment in bill is done and votes are taken. Consider the changes: In this stage, if the House of Lords have made any change in the
draft of bill, it is send to the house of common for their acceptance. It is the option on
Commons to accept the amendments or reject it and if it is rejected, it is sent back to
Lords. This step involves various rounds that's why it is called as ping pong stage.
 Royal assent: When the bill is passed by both the houses, it is sent to the Head of the
state which is the Monarch for its assent so that it can be made a law (MOHSENI, 2020).
Application of law in court
Basically, there are two types of law in UK which includes statutory and common law.
The former is made by the Parliament which cannot be challenged in any court while the latter is
the one which is made by the judiciary through the case precedents. These are applied in the
justice court in order to render justice to the people.
There are two types of courts in English legal system, superior and subordinate. The
former involves the Supreme Court of UK which is the highest court of appeal wherein the
criminal and civil case is appealed only on point of law. Then is the Court of Appeal which
consist of Criminal and Civil Division wherein appeals from Crown court are heard by Criminal
division while appeals from High courts, County courts and tribunals are heard by Civil

Division. Then is the High Court which consist of three divisions which includes Family
Division, Chancery and Queen's Bench (Bermann, 2017).
The subordinate court includes firstly the County Court wherein the civil cases are heard
of first instance then is Magistrate Court wherein criminal cases are heard which are less severe
offences and is Crown Court which hears appeal from Magistrate court and the cases which
relate to severe criminal offences. Then is Youth Court which hears the cases of the young
people who are aged between 10-17 years (Zinonos, 2021).
Potential impact of various laws on business.
The rules and regulations which are framed in the state plays an essential role in
regulating the business. Any change in the business legislations can change the way a business
operates as its whole functioning is dependent upon the laws. For instance, the tax policies
affects directly the business as taxation is mainly based on the revenue earned by firms. The
potential impact of different laws on the business are as follows- Employment law: These laws hold the foremost importance when regulating the
business as it has now become obligatory for business to protect the rights of the
employees from exploitation as the employment law mandates to do so such right to
equal pay for equal work, right to safe working environment, employment contract and
many others. For instance, Equality Act mandates the employers to treat every employee
in fair and equitable manner and prevent any discriminatory practise. Also National
Minimum Wages Act provides for the right of employees for the minimum wages which
the employer is obliged to pay. The Employment Tribunal is a body established by law
to manage the cases relating to dismissal, redundancy, employment contract, health and
safety, discrimination and many others. Contract law: As every business is nowadays engaged in business transactions relating
to trade or commerce, so it is essential to regulate these transactions by contract law.
This legislation mainly regulates the rights, liabilities, duties and relation of the parties.
The main elements of contract includes offer, acceptance, intention to create legal
relations and consideration. Its impact is huge on the business as it is inherent part of it.
Many of the business relations are being formalized through the contract and provide
adequate remedies to the aggrieved parties in case of breach of contract such as damages,
specific performance of contract, injunction, etc. (Cotran, 2021)

 Company law: It is generally aimed to protect the personnels associated with the
companies, which includes not only the top management or director but also the workers.
As company is the separate legal enterprise and has its own life so there are rules
embodied in this legislation so that its working is regulated in proper manner. It provides
the rights and duties of the stakeholders to which they are obliged to work within it. It
also provides the rules relating to formation of company, winding up of company and
many others.
Legal formation of business organizations.
There are mainly two types of business organizations which includes firstly incorporated
business which is a separate legal entity distinct from owners while the other is unincorporated
business is such that bears all liability and responsibility of business. The main difference
between the two is that in unincorporated, the owner is responsible for all actions while in
incorporated, there is limited liability only. The types of business organizations and its legal
formation is discussed below- Sole proprietorship: This type of entity involves a single owner who manages the
working of the business. The owner is responsible for the decision making,
responsibilities and liabilities of the firm. This business is suitable for the small scale
working as it involves only one person to handle all details of business. The legal
formation of this business organization involves registration at HMRC with the suitable
name and very formality and fees is required to incorporate the sole proprietorship. Partnership: This type of business organization involves two or more pupil who mutually
agrees to initiate the firm wherein the partners agree to share the profit, loss, capital
contribution, decision making and responsibilities of the firm. The working is generally
shred among the partners on the basis of their skills and expertise knowledge. There are
generally two types of firms, general partnership wherein the partners have unlimited
personal liability for the debts of firm and is legally formed by registering it at HMRC
while the other is limited liability partnership wherein limited liability is involved of
partners and it is formed by registration at HMRC and Companies House (Teichmann,
2018).
 Companies: It is regarded as separate enterprise distinct from the owners and is an
artificial personality which has its own common seal. It is generally formed through a

complex procedure wherein high cost in incurred and it requires registration at
Companies House with suitable name and other requisite documents such as
Memorandum of association, article of association and many others.
How businesses are funded and managed.
As the businesses differ on the basis of its ownership and structure, so is the distinction
between them on the basis of their management and funding. These are discussed below for
different kinds of businesses- Sole proprietorship: These business firms have a single owner so the power to manage
the working of these enterprises rest in the hands of the owner. The management of firm,
its decision making and responsibilities are in the hands of owner only. The funds are
raised either through the bank loans or by using the personal savings of the owner due to
its small scale operations. Partnership: This type of business organisations are managed by the partners as per their
skills and knowledge. The ratio of their profit, loss or capital also decides their
responsibilities and management. Their funds are raised by partners either through opting
for their personal savings or by bank loans.
 Companies: There are mainly two types of company which includes public company
wherein the share capital is raised by inviting application from public to make
subscription of shares. The shareholders elect the board of directors who represent their
interest in their organisation and they manage the working of the business. Other is
private company wherein the funds are raised by equity and debt and is managed by the
directors and owners (Aluchna, Kamiński and Mahadeo, 2020).
PART 2
Recommend legal solutions for the range of disputes.
Litigation is one such option as a legal solution which is time consuming and costly
method of solving the dispute. Apart from it, The Civil procedure Rules, 1986 provides for
variety of methods which offers out of court settlement in a speedy manner. These methods are
less time consuming and cost effective. Various legal solutions for different situations are
discussed below-
Case Scenario 1

Legal Issue
Whether Gordon is entitled for the payment of outstanding wages from the year 2015-
2017? This case relates to the employment contract which is being varied by the employer after
taking consent of Gordon. The employment and contract law is being discussed in this.
Legal Solution
Negotiation is being used for solving this dispute which involves appointing the
independent party who becomes the negotiator between the parties and tries to bring the
amicable solution for them. It is aimed to keep both the parties at win-win situation so that no
one losses anything. In order to give binding effect to the decision, a negotiation agreement is
signed (Khanna, 2018).
Justification
This solution is recommended because negotiation will help Gordon to claim its
remaining wages which were not given to him due to variation in employment contract due to
financial scarcity in business. If the variation is done once, it can be done again and Gordon may
claim its wages when the business is now flourishing. The contract law provides for variation
clause and it can be done with the consent of concerned person so in this case the variation done
is valid.
Case Scenario 2
Legal Issue
Whether the consumer Janet is liable to pay the telephone bill for the time period she has
not used it to the service provider, Virgin Media? This issue is relating to the contract law.
Legal Solution
Mediation is being suggested to the parties wherein an independent third party is
appointed who tries to mediate between the parties by advising them the best. The main aim of
this method is to bring amicable solution between parties without any formal proceedings. The
suggestions or advice of mediator is not binding on the parties (Ramseyer, 2017).
Justification
This solution is recommended because the dispute is relating to the consumer contract
which is being done between Virgin Media and Janet. As the telephone was installed after 3
weeks, so Janet shall not be entitled to pay the whole sum as the bill is always generated on pro

rata basis. Moreover, mediation will help in bringing solution without interference of court
which will also save the goodwill of the parties.
Case Scenario 3
Legal Issue
Whether the petition filed by one of creditor against the Blackhorse company is valid?
This issue shall be discussed in the light of company law.
Legal Solution
Arbitration is being recommended here as it involves appointment of independent third
party who hears the facts and evidence of the case and provide the decision to the parties which
is called as award. The parties have flexibility to choose the arbitrators, time and place of the
arbitration as well. There is no limit for appointing the number of arbitrators but it has to be in
odd numbers (Zhang, 2017).
Justification
This solution is being recommended to the parties as arbitration brings binding decision
for the parties that too in speedy manner. Moreover the arbitrator will help in resolving the
dispute among the parties in amicable manner. The formal proceedings are same as court system
but there is less formalities as compared to it. In order to avoid the compulsory winding up, the
company can request the creditors for more time or pay in monthly instalment so that its debts
are repaid and winding up is not done.

CONCLUSION
It is concluded from this report that business law regulates the working of the business as
it provides the rights and obligations of the people associated with it. The English legal system
comprises of statutory and common law and its sources includes primary and secondary. The
Parliament has supreme authority to enact the law wherein a bill undergoes many stages in either
house to make it a law. There are many business organizations which are legally formed in UK
which includes sole proprietorship, partnership, companies and many others. Further it is added
that there are various legal solutions which can opted by people in order to solve their dispute
which includes arbitration, mediation, negotiation and many others.

REFERENCES
Books and Journals
Aluchna, M., Kamiński, B. and Mahadeo, B., 2020. The association between independent
directors and company value. Confronting evidence from two emerging markets.
Corporate Governance: The International Journal of Business in Society.
Bermann, G.A., 2017. International arbitration and private international law. Brill Nijhoff.
Cotran, E., 2021. A s in the political field, so in the legal field, the history. Tradition and
Transition in East Africa: Studies of the Tribal Element in the Modern Era, p.127.
Khanna, V., 2018. Business organizations in India prior to the British East India Company. In
Research Handbook on the History of Corporate and Company Law. Edward Elgar
Publishing.
Kucko, M., 2017. Piercing the Corporate Veil-Should English Law Go Dutch?. Available at
SSRN 3230296.
Luts, V.V., and et. al., 2021. Convergence of the Contract Law of Ukraine and EU Member
States. Global Journal of Comparative Law. 10(1-2). pp.123-137.
Mili, M., Gharbi, S. and Teulon, F., 2019. Business ethics, company value and ownership
structure. Journal of Management and Governance. 23(4). pp.973-987.
MOHSENI, H., 2020. The Intensity of litigable “Environmental damage” in French Law and the
Challenges of “Environmental pollution” in the Iranian Legal System.
Ramseyer, J.M., 2017. Aspen Treatise for Business Organizations. Wolters Kluwer.
Teichmann, C., 2018. Digitale Gründung von Kapitalgesellschaften nach dem EU-Company
Law Package. ZIP: Zeitschrift für Wirtschaftsrecht. 39(51). pp.2451-2462.
Zhang, F., 2017. Assessing China’s response to the South China Sea arbitration ruling.
Australian Journal of International Affairs. 71(4). pp.440-459.
Zinonos, P., 2021. Revisiting the EU Legal System: Substantive & Procedural Loyalty for the
Judicial Enforcement of the Rule of Law. European Public Law. 27(2). pp.383-402.