Impact of Business Law on a Business

This report discusses the impact of business law on a business, including contract law, employment law, and company law. It explains the different sources of law and the roles of the government in law making. It also explores the types of business organizations and how they are managed and funded. Additionally, it provides recommendations for legal solutions for resolving disputes and compares different sources of legal advice and support for dispute resolution.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Explain different sources of law.......................................................................................1
P2. Identify the roles of the government in law making and show the application of statutory
and common law.....................................................................................................................2
M1 and D1 Evaluate the effectiveness of legal system in terms of reforms and developments.4
TASK 2...................................................................................................................................4
P3. With the use of examples, show the impact of company, employment and contract law
upon a business.......................................................................................................................4
M2. Explain the different between legislation, regulations and standards.............................5
TASK 3...................................................................................................................................5
P4. Explore different types of business organizations............................................................5
P5. Explain how the business organizations are managed and funded..................................7
M3. Explain the merits and demerits of the various business organizations..........................8
D2. Critically review and evaluate types of business organizations......................................8
TASK 4...................................................................................................................................8
P6. Recommend legal solutions for resolving a range of disputes with the use of examples 8
M4. Compare and contrast different sources of legal advice and support for dispute resolution
................................................................................................................................................9
D3. Evaluate the effectiveness of legal solutions, legal advice and support for dispute
resolution..............................................................................................................................10
CONCLUSION....................................................................................................................10
REFERENCES..............................................................................................................................11
Table of Contents
INTRODUCTION...........................................................................................................................1
SECTION 1 Nature of Legal System On Businesses......................................................................1

TASK 1............................................................................................................................................1
1. Explanation to the legal system and the difference between civil law and criminal law...1
2. Explain different sources of law.........................................................................................2
3. Identify the roles of the government in law making and show the application of statutory
and common law.....................................................................................................................3
4. Explain the different between legislation, regulations and standards................................4
5. With the use of examples, show the impact of contract law, employment and upon a
business...................................................................................................................................5
6. Provide a critical reflection of the UK legal system using examples to demonstrate the
strength and weaknesses.........................................................................................................6
TASK 2............................................................................................................................................6
1. Explore different types of business organizations in both private and public sector.........6
2. Advantage and disadvantage of different legal structure...................................................7
3. Explain how the business organizations are managed and funded.....................................7
SECTION 2 Legal Solutions to the Dispute....................................................................................9
1. Recommend legal solutions for resolving a range of disputes with the use of examples. .9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Legal system in a country is made up from different types of statutes and regulations
governing the acts of individual living in a country. Every such law has its applicability and
scope. Business law comprises of legal provisions which are applied on commercial transactions
between two organizations. This is to provide legality to the operations of the entity so that
wrongful acts can be prevented (Clarkson, Miller and Cross, 2014). In this report, commercial
law has been explained by defining the sources through which legal information can be obtained
and role of government in law making has also been presented. In addition to this, impact of
company, contract and employment law upon a business, kinds of organizations which can be
used for establishing the business together with their funding and management have also been
discussed. Furthermore, disputes resolution methods have been discussedthat take place in a
business deal can be resolved by using number of alternative dispute resolution solution along
with this a recommendation has also been provided about the most suitable method.
SECTION 1 Nature of Legal System On Businesses
TASK 1
1. Explanation to the legal system and the difference between civil law and criminal law
The legal system of UK is much powerful as compared to other nation because whole of
the power is in their hand only. It is assumed that the decisions which are taken by them is right
and any of the outsiders are not allow to make a question on the law but everyone must have to
follow it. If any of the legal body wants to commence any of the law, then they are needed to
take final approval from Parliament House.
Civil law: It is explained as the law which deals with those laws and regulation through which
rights of citizens can be protected, various offers legal remedies can be given to clear any sort of
disputes. Also, it covers different law under it such as contract law, business law, family law and
many more.
Criminal law: It is the body of law which deals with the section of crime. It is one of the law
which helps to protect any of the innocent people from harmful activities or otherwise
endangering to the property, health, safety, and moral welfare of people inclusive of one's self.
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2P1. Explain different sources of law
There are two kinds of sources viz. Primary and secondary having their own sources
which can be used to extract information about law.
 Primary sources- The first hand information contained in the original form without
changing its structure or details are called primary sources. Same are as follows:
Case law- The case judgements which have been provided by the judges in the courts
including the issues, facts and decision. UK courts follow doctrine of judicial precedent
according to which the future cases are decided on the basis of previous case laws (Howard,
2013). This means that if a case have similar situations then no new law should be used in
finding a solution.
Legislation- The statues in the UK legal system are necessary for every individual to
abide by as they govern their acts and conduct. It defines the offences and the punishment which
can be provided on occurrence of such offence. It is passed by the member of parliament. The
base of UK legal system is legislation.
EU commission- It issues directives in the form of law which are applicable on the
member countries of EU commission. These directives are important for carrying the trade in
European countries without any hindrance and by charging the tariffs as provided in the
directives (Horspool and Humphreys, 2012).
 Secondary sources- The information extracted from the primary sources which has been
changed for making it more understandable is considered in secondary source. Some of
the examples of it are as follows:
Legal encyclopaedias- Halsbury's law of England and Wales is the authentic source from
which the laws can be understood. It has been designed in a comprehensive way with the
inclusion of expert advice.
Parliamentary and non-parliamentary publications- These are the debates held and
speeches of the members of parliament by mentioning the key points regarding the laws that
have beebeen implemented in the UK. On the other hand, non-parliamentary publications include
the reports prepared by the departments of the government which are posted on the official
websites sowebsites so that general public can access them (Olle, 2013).
Law commission- A commission was constituted by the UK government to overlook the
the current laws which are applicable to the whole UK. The recommendations of the committee
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are independent of any factor. The report is presented to the interested parties and other experts
for receiving their suggestions as well.
Textbooks- The books which are written by different authors showing their different
interpretations along with real case laws which have taken place in the past reflecting the
applicability of the law in particular situations.
Law journals- These are the source in which amendments in the current laws are included
which are provided to the practitioners practising the law. These can be provided for a particular
area or as a general.
3P2. Identify the roles of the government in law making and show the application of statutory
and common law
Government has different roles in variety of sectors in a country. These are exercised for
the betterment of the society in which it is operating. It has three role in UK law making which
have been provided below:
Executive role- In this, the Queen, Prime Minister and rest of the cabinet ministers have
the role to ensure the enforcement of the statutes made applicable in the country (Wehner and De
Renzio, 2013). It is the first job in which all the plans, policies along with statutes are overseen
by these authorities so that their implementation is done effectively. This make sure that every
individual is following them leading to improved justice and legal system in the country.
Legislative role- As the name suggests, the laws are formed by the members of the
parliament by passing the bills through the fixed process. The house of common and house of
Lords can present bill in front of the parliament or the queen so that they can be enacted by
receiving the royal assent. The bill passing procedure is as follows:
First reading: In this stage, the bill is presented before the parliament as a formal
introduction.
Second reading: After the bill is presented, it put forward for the discussion between both
the houses of the parliament. This is done to highlight the key points in the bill.
Committee stage: In this stage, the bill is examined by a standing committee formed for
the purpose of reviewing the bill for making amendments (Procedure for passing of a bill, 2019).
Report stage: The report prepared by the committee is provided to the House of
commons within two weeks.
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Third reading: In this stage, modifications are subject to the approval of the both the
houses of parliament. The draft bill is reviewed for the last time.
Royal assent: This is the final step in which the royal assent of the queen is received for
enacting it as a law throughout the UK.
Judiciary role- This role gives the power to the government officials for establishing
courts as well as tribunals as a part of the judiciary system. The main motive is to provide
sufficient number of courts with individual jurisdiction so that justice or decisions can be made
promptly. This leads to increase in the efficiency of the legal system in UK.
The courts in UK use different kinds of laws which have their own applicability and
scope. The same have been discussed below:
Common law- It means the law which emerges from new decisions made by the judges,
courts and tribunals. It is based on doctrine of judicial precedent and is also known as case law or
judge-made law. The underlying fact is that it is unfair to treat the same facts in a different
manner in different circumstances. Courts use this to decided the factual situations having the
same facts and issues. In other words, it is future cases are decided on the previous cases
(Gillespie, 2013).
Statutory law- It is the main base on which the legal system of a country is formed. These
are provided in written form and enacted by the parliament of UK. The legal authority to
present the bill in the parliament is with the members both the houses. Also, every citizen of
the country is required to adhere to them in order to work lawfully. It represents the will of the
legislature and is more of a command which every person has to follow and abide by. The
statutory law encompasses the rules for regulating the society and is made considering the future
cases.
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M1 and D1 Evaluate the effectiveness of legal system in terms of reforms and developments
English legal system in UK has been modified in order to maintain the quality and to
update the previous acts which have not been changed from many years. It has a
consistency in the legislations but the judiciary system fails to provide appropriate
judgement due to loopholes present in the acts. Therefore, it should change the legal
structure to make it more effective and to overcome the shortcomings by removing them.
There are many acts such as Companies Act 2006 which have not incorporated the changes
according to the current scenario. This shows the inefficiency of UK's legal system.
4. Explain the different between legislation, regulations and standards
Legislation- It is the statutes which are enacted by the supreme authority i.e. Parliament
in UK. It is compulsory to follow without breaching any of the provisions. The impact upon a
business is that additional financial burden can arise due to non-compliance.
Regulations- These are the specifications or rules according to which the administrative
work is done. It is also mandatory for the organizations to follow. Without adhering to this, hefty
penalties may be imposed on the entity (Difference between Legislation, regulations and
standards, 2019).
Standards- These are used by the corporations as a base against which the actual output is
measured to overcome the difference. It can reduce the wastage and increase product or service
quality.
TASK 2
5. P3. With the use of examples, show the impact of contract lawmpany, employment and
contract law upon a business
Employment law- It regulates the appointment of the candidates through interview and
other methods for choosing the best employees. It plays a significant role in a business enterprise
because it governs their employment rights such as leaves, termination, resignation, and many
more. It has impact upon the working of the organization. It is designed to protect the rights of
the employee and extends to almost all the aspects of the employer/employee relationship. There
is a compulsion for organizations to follow these laws in order to provided protection to the
employees. For example, an employee has not been given his employment rights this can impact
range from higher job satisfaction, happier staff, enhanced productivity, less disputes and stress
and many more. Company law- Company is a business type in which is governed by
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Companies Act, 2006 and related rules and regulations. According to this, it is a separate legal
entity which has to carry the operations according to the legal provisions provided in the Act.
This is to ensure the smooth functioning of a business enterprise. Furthermore, there is increased
transparency and accountability towards the investors which lead to higher confidence in the
company laws (Act and House, 2014). There are rights, obligations and power that have been
passed on to it by Companies Act, 2006. The business of a company gets affected by this act as
there could be modification in directors' duties and many more. For example, ABC company has
failed to comply with requirements of annual meeting The possiblethis could impact could be
running of business without any hindrance, increased number of shareholders and other
investors, higher recognition and goodwill, raise in securities value etc.
Employment law- It regulates the appointment of the candidates through interview and
other methods for choosing the best employees. It plays a significant role in a business enterprise
because it governs their employment rights such as leaves, termination, resignation, and many
more. It has impact upon the working of the organization. It is designed to protect the rights of
the employee and extends to almost all the aspects of the employer/employee relationship. There
is a compulsion for organizations to follow these laws in order to provided protection to the
employees. For example, an employee has not been given his employment rightsThe this can
impact could range from higher job satisfaction, happier staff, enhanced productivity, less
disputes and stress and many more.
Contract law- The impact of contract law is huge on any business irrespective of its size,
nature or type. These are prepared by including all the possible clauses as decided by the
concerned parties. It should be a valid contract by containing all the essential conditions. Mainly,
the it is formed between a seller and a buyer for transacting goods or services. It comprises of the
details such as goods or services described, clauses for payment, amount, mode of payment,
cancellation etc. Acting against the terms of the contract renders it revoked. The effect of such
action is negative which hampers the business activities (McKendrick, 2014). Apart from this,
terms should be stated clearly and in case of any ambiguity, there could arise financial
obligations which is actually an additional burden on the whole organization. The impact could
be the any amount specified in the contract which is paid in advance will be forfeited by the
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party who has received it. Furthermore, the provisions of the act governsgovern the rights and
duties of the agreements between the businesses which facilitate the free flow of trade.
Copyright law: It is one of the law which explains that how rights of any of the person or
organisation can be protected. The main benefits of copyright law on business organisation is
that it doesn’t allow any of the unauthorised person to misuse the product. In short, the impact of
copyright law is that it gives developers and publishers the rights to control unauthorised
exploitation of their work.
6. Provide a critical reflection of the UK legal system using examples to demonstrate the strength
and weaknesses.
English legal system in UK has been modified in order to maintain the quality and to
update the previous acts which have not been changed from many years. It has a consistency in
the legislations but the judiciary system fails to provide appropriate judgement due to loopholes
present in the acts. Therefore, it should change the legal structure to make it more effective and
to overcome the shortcomings by removing them. There are many acts such as Companies Act
2006 which have not incorporated the changes according to the current scenario. This shows the
inefficiency of UK's legal system.
M2. Explain the different between legislation, regulations and standards
Legislation- It is the statutes which are enacted by the supreme authority i.e. Parliament in
UK. It is compulsory to follow without breaching any of the provisions. The impact upon a
business is that additional financial burden can arise due to non-compliance.
Regulations- These are the specifications or rules according to which the administrative
work is done. It is also mandatory for the organizations to follow. Without adhering to this,
hefty penalties may be imposed on the entity (Difference between Legislation, regulations
and standards, 2019).
Standards- These are used by the corporations as a base against which the actual output is
measured to overcome the difference. It can reduce the wastage and increase product or
service quality.
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TASK 2TASK 3
P4.1. Explore different types of business organizations in both private and public sector
A business can be established in any form based on the requirements of the owner and
advantages/disadvantages of the chosen entity type. These have been explored as follows:
Sole proprietorship- It is an unincorporated business ownedbusiness owned and managed
by a single person who is termed as sole proprietor or sole trader. The law does not distinguish
between the entity and the owner. This means that there is no requirement of registration.
Furthermore, it is treated as an extension of the owner and the liability may extend to personal
asses. In simple term, sole proprietor is personally responsible for the debts and liabilities of the
business. The individual who are interested in starting a small business to be controlled without
the intervention of the any other person. It can be formed simply by registering the owner
(Abdulsaleh and Worthington, 2013).
Partnership firm- It is an association of the people who are called partners to form a firm,
carry the business lawfully and share the profits of a business. It has main features which should
be there in order to incorporate a partnership firm. It is not compulsory for it get itself registered
however, it can have benefits of the act after registration. A partnership deed is executed between
the partners which comprises of terms and conditions as decided by the partners. The liability is
shared jointly and severally and a partner can be held liable for the acts of another. Deed is the
evidence by which it is witnessed that a partnership firm has been established.
Limited company- Law has identified company as an artificial entity which is different
from its members. It is the feature of distinct or separate legal identity which gives powers to the
company to acquire and sole properties, open own bank account, enter into contracts on its own.
This is entirely the matter of the corporate and there is no involvement of the members who are
known as shareholders. Their liability is restricted up to the amount unpaid on the shares held by
them in case it is limited by shares. There could be another types of liability which is to the
extent of guaranteed amount so specified in the MOA which is to be contributed at the time of
winding up. It is formed by filing application form in IN01 along with number of documents
with the Companies House (Companies Act,2006).
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Limited Liability Partnership (LLP)- The hybrid form of a company and a partnership
firm is known as LLP which combines the features of the provided entities. The members are
called partners who have limited liability just like the shareholders in the case of a company.
Furthermore, the management and structure are also flexible which can be changed as per the
ease of the partners. Generally, the professionals like CA, CS, lawyers opt for this type for
carrying out their business.
2. Advantage and disadvantage of different legal structure.
Types of organisation Advantage Disadvantage
Sole Proprietorship Work can be easily managed. Doesn’t have the power to sue
and be sued.
Partnership Decisions can be easily taken. Disputes can be raised while
distributing the power.
Limited Company Fund can be easily arranged. Number of legal formalities
are needed to be done.
Limited Liability Partnership Liability is limited in it. Doesn’t have the right to
exceed the maximum number
of members.
3.P5. Explain how the business organizations are managed and funded
Sole proprietorship- The organization is simple and generally, the size of business is
smaller. This is why the management becomes easy which is done by the sole trader all alone.
Decisions are taken and implemented by the owner however, family members or other
individuals can be appointed for carrying activities on daily basis that too on the instructions of
the sole proprietor. When it comes to funding the business, there are very few options left to
raise funds. The business is funded either with the personal saving or investment or by obtaining
loan from banks or financial institutions (Council, 2012).
Partnership firm- Partners are the people who form a partnership firm hence, they are the
individuals who have the authority to make decisions, enter into contracts, take actions etc. with
an objective to apply to the firm. Apart from this, every partner is required to share the liability
jointly and severally. In terms of financing, it has number of avenues from which the funds can
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be raised. Some of these includes bank/financial institution loans, contribution by the members
to the capital of the firm, venture capital, loans from friends etc. The position on fund raising is
better than any other types.
Limited company- It is an artificial person which cannot act, make decisions, manage the
daily activities etc. Therefore, it appoints directors who act as an agent of the corporate and carry
their work according to the directions and instructions of the company. They are provided certain
rights, duties and powers as per the Companies Act and the Memorandum of the body corporate.
They hold the decision making power and every other possible powers which are exercised to
benefit the company. The main sources for raising funds are share capital and debenture. Others
are borrowings, retained earnings, loan from creditors, loan from banks or financial institution,
deposits, and many more. It has variety of options for raising funds which is an attractive feature
of this type of organization.
Limited Liability Partnership (LLP)- It is administered by the partners who have
established it (Wilson, Hayward and Wilson, 2017). The activities are handled by the partners by
making decisions which are applied for meeting the objectives. In addition to this, the sharing of
liability is similar to that of a partnership firm. Funding for this type of entity is not that difficult
as it has number of sources such as loan from bank or financial institution, contribution by
partners, borrowings from friends or relatives, crowd funding and many more options can be
used for this purpose.
Social Enterprises: These are those business organisation which performs business
activity at a greater platform where main motive is to help the society and people at large. The
main source of collecting the funds in social enterprises is through public donations and even
government funding and many more. Directors, Shareholder have the responsibility to manage
the work of an organisation.
Public corporation: This are the organisation which is incorporated with the special aim
and objectives. The main decisions are being taken by the government and shareholders of a
company who plays the significant role. For funding, it can easily trade the share in share
market, government agencies provide the loan in it.
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SECTION 2 Legal Solutions to the Dispute M3. Explain the merits and
demerits of the various business organizations
Sole proprietorship- It is a simple form of business which involves low cost
for establishing it. The legal and financial formalities are less as compared
to a company. On the other hand, the owner is personally liable for the
debts and obligations of the firm. Also, the death or bankruptcy of the sole
trader may make the entity close.
Partnership firm- It can be formed by just two persons only and the
expenses to set up a firm is low. Partners have the authority to make
decisions which provide a flexibility in the operations. On the contrary, the
liability of the partners is unlimited which may extend to their personal
assets. Also, disputes are high (Clarke, 2015).
Company- It can have its own properties, bank account etc. as it is a
separate legal entity. The management is done by the directors by
exercising independent judgement. However, it is expensive to incorporate
and shareholders are liable to pay tax twice on the income.
LLP- It provides greater flexibility to the partners. Also, the liability is
limited. But disputes may occur more frequently.
D2. Critically review and evaluate types of business organizations
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Sole proprietorship is simple to form which provides the sole authority to
the owner. All the decisions are made by the sole trader but the there is
also a personal liability for the debts of the organization. It is suitable for
small businesses. Partnership firm is an association of the partners in
which the profits are shared according to the ratio provided in the deed.
However, the liability is share jointly and severally (Mackie and Mackie,
2013). Company has separate legal identity according to which it can have
properties, bank account etc. different from its members. Also, it can be
wound by the law only. On the other hand, the cost for setting up is more
and there are increased formalities which is time consuming. LLP restricts
the liability of the members and provides flexibility. But a partner can be
held liable for the act of other partner.
TASK 4
1. P6. Recommend legal solutions for resolving a range of disputes with the use of examples
Explanatory Memorandum To
Health and Safety Act 1974
It is necessary for every business organisation that they must provide all of the necessary
payment to their employees while working with the organisation. They are needed to follow the
rules and regulation of health and safety act 1974 which explains about the rules related to safety
of employees. as memorandum is prepared for next board meeting it is explained to company
that that employee should be provided safety equipment while working in hazardous industry.
Also, there is the requirement to make different medical facilities to the employees if something
wrong happens. Company should provide the leave to female employees who are going to the
period of maternity
b. Charlotte is working as accountant in the finance department of a company now her
friend has asked to work her as a bookkeeping while she is free. As per the employment law it is
necessary that person should not work in two different place at a single time because it might
leak the internal information from one organisation to another. But, there is no contract between
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Charlotte and her company that she must work for a single company only. It means that
Charlotte can easily work in her friend’s firm as a secondary option to earn the money.
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Disputes legal solutions provide the ways through which disputes or
conflicts can be resolved without going to the court. In other words, the
conclusion or decision can be made even without dragging the court in
between. Some of these are elaborated below:
Mediation- It is a formal and structured kind of negotiation conducted by
a common third party who is known as mediator. The person uses variety
of techniques for determining a solution which can be agreed by the
parties to the dispute. However, the mediator cannot bind the parties to
accept and follow the final result. The work is to facilitate a
communication with an aim of finding a solution to resolve the matter
(Nolan-Haley, 2012).
Conciliation- In this process, an independent person, the conciliator, assist
parties to the dispute to identify the problem, take steps in order to find
the solutions along with alternatives so that a decision can be made. There
may arise some situations in which the conciliator may seek expertise of a
legal expert for providing better advices and suggestions. However, there
is no authority granted to the conciliator to make a decision regarding the
dispute.
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Arbitration- It is a formal alternative which involves settling of dispute
without litigation or going to the court. A person is appointed mutually
who is known as arbitrator. The role of such third party is to provide
professional advice on the basis of evidence and arguments provided by
the parties to the dispute. Also, there may be individual procedure for
carrying out the activities in order to obtain a conclusion. This is done to
settle the problem in an amicable way without involving the court. Also,
the decision is final and binding on the parties to the dispute (Paulsson,
2013).
In the case of Alex, who is an Italian citizen and has been running the
business of Dormitory hostel in London for EU students. He has a dispute
with Ali regarding the open dustbins in the backyard due to which he may
lose his focus from the new contract for preparing and supplying of meals
for three times in HSBC Bank.
According to the situation mentioned above, arbitration is the best option
for settling down the issue with Mr. Ali. This method is effective because it
is cheap as compared to litigation. Also, the decision is obtained promptly
which is final and binding.
M4. Compare and contrast different sources of legal advice and support for
dispute resolution
Legal Adviser Finder- It is a directory through which advices can be
obtained and which is available online. It is easy to use just by putting law
and location. It is not appropriate for arbitration as it does not involve any
legislation.
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AdviceUK- It is an organization for providing advices to the one seeking it.
It has its own website which can be accessed for gaining the right
suggestion. This can be used to know more about arbitration and its
application within the case (Lane and et. Al., 2013).
D3. Evaluate the effectiveness of legal solutions, legal advice and support for
dispute resolution
Legal solution- These are the actions or processes which are used for
obtaining the right decision for the dispute presented. It can be in variety
which have the aim to provide the expected solution.
Legal advice- It is the formal opinion writing of the professional who is an
expert in the fields of the law. It involves analysing the facts on the basis of
which advices are given.
Support for dispute resolution- This means that the legal solution as well
as the legal advice are appropriate for the settlement of the dispute that
has arisen (Smits, 2017).
CONCLUSION
From the above report, it has been concluded that legal system in a country is a set of
different types of laws which are applicable on the individuals, also the organizations which are
part of the country. It is categorised into various categories having their individual applicability
and scope. Business law is a part of legal system which governs the commercial transactions. It
is necessary to be aware about the legislations and rules which are applicable to a particular
entity and for this purpose number of sources can be accessed. Furthermore, common law and
statutory law have different application which should be understood for using it in the courts
with a view to get desired decision. Apart from this, impact of company, employment, contract
and all other major laws should be evaluated for determining its impact upon the business. Also,
different types of organizations have been explored along with their management and funding in
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this report which may be beneficial for a businessperson. Lastly, dispute resolutions methods
have been explained for getting quick solution to legal matters without the intervention of courts.
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