Business Law: Nature of Legal System, Impacts on Business, Legal Structures and Organizations

This report explains the nature of the legal system, the role of government in law making, and the way common and statutory law is applied. It also discusses the potential impacts of the law on a business, the difference between legislation, regulation, and standards, and various legal structures and organizations.

UNIT 7: BUSINESS LAW

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
LO1..................................................................................................................................................1
Explanation about the nature of the legal system........................................................................1
The role of government in law making and the way common and statutory law is applied.......4
LO2..................................................................................................................................................5
Potential impacts of the law on a business along with difference between legislation,
regulation and standards to evaluate potential impacts...............................................................5
LO3..................................................................................................................................................6
Unincorporated VC incorporated legal structure.........................................................................6
Different type of business organization and legal structure........................................................6
Classification of company...........................................................................................................7
Formalities required related to starting and registration of business...........................................7
LO4..................................................................................................................................................8
Brief overview of Contract law, employment law, Company law..............................................8
Salient legal points of each case;.................................................................................................8
Legal solution to each of the problems........................................................................................9
Justification for the advice and solution....................................................................................10
Compare & contrast the effectiveness of these recommendations............................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business law is a kind of knowledge that helps the businessmen and managers while
taking sound decisions regarding their work within the organization. There are countless laws
and regulations that applied within the commercial enterprise world. These laws can enable the
firm in defining the honourable activities, providing firmness and discarding risks along with
cognitive state. Moreover, they also helps in resolving the conflicts (McCorquodale and et.al.,
2017). This report will basically describes the complete concept of business law along with the
judicial scheme and statute law that influences the company within the UK. Apart from this, the
study will also highlight the description about procedure of law making along with differences in
common law and statutory law. The second part of the report will describe various essential laws
in discourse of given scenarios. Moreover, the potential effects of the law on an organization are
also will be assess. In the last section, legal solutions and advices will be given according to
provided case studies.
MAIN BODY
LO1
Explanation about the nature of the legal system
Law is basically a set of rules that are created and implemented by particular country
through social and political establishments to modulate the activities of its members. The
primary purpose of law is to maintain order, resolve disputes, establishment of standards and
also in order to protect rights of an individuals. There are five types of legal system i.e. civil law,
customary law, legal law, mixed law and religious law. The European country judicial scheme
follows a particular power structure, on top of which is the Supreme court (Canestrari, 2019).
The finding of facts given by this judicial body are binding on all the judicial bodies within the
hierarchy. Even after the Supreme court is given the advanced court, decisions of European
court of justice must be followed by each and every courts in the United Kingdom under various
sub sections of the European communities Act 1972 (Stepanovienė, 2017). The major difference
between between Criminal and Civil court has been explained below with the help of pictorial
representation:
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From the above picture it has been clearly identified that the court of prayer falls beneath
the Supreme court within the pecking order and is categorised into Criminal and Civil
dimensions. The lower court have to stay by the decisions that have been prepared by two of
these courts but the civil court division provide some powers that makes it an exception to this
rule. The fractional courts comes under the threesome high court divisions in which judicial
bodies are bounded by following decisions that has been taken by Supreme Court and the court
of appeal (Malsukhum, 2021). Then comes the crown court that comes under the condemnable
court division. It is not necessary to follow the verdicts given by its previous section. Below the
crown court, functionary court are existing which is not at all bounded by any different courts
and is not likely to follow its premature determination.
The major difference among both the laws are Criminal law and civil law are:
Criminal Law Civil Law
 Their major aim is to maintain stability
within the state or society.
 The decision of court in a criminal case
 Civil law purpose to handle disputes
among the companies and individuals.
 Cases generally involve compensation
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is guilty or not guilty.
 Only defendants can appeal for the
decision of the court.
 Cases are generally filled by the
government.
 Only the defendant can appeal the
decision of the court.
relating to finances.
 Cases are filed by private parties.
 The decision of court is liable or non
liable.
 Either party can able to appeal in civil
cases.
Different sources of law are:
There are majorly two premier rootage of law such as primary source and secondary
source that can also be divided into various sub sources:1. Primary sources: The first source of message are: Precedents: These are the common-law philosophy that is settled on the early judgments
of the court that are normally cited by the lower level tribunal or similar plane. The
guidance is only taken under the circumstances of ideal case or situation with the
previous case (Dusunge, 2018). Customs: These laws have been set by particular community and trade with definite
regulations that were fit by citizens in the ancient times. European laws: These laws are made by associate state of EU and court of justice. Laws
can overpower the UK's statutory laws. Legislations: These are also known as enactment laws and created by legislative
assembly of UK ans also applicator to each and every citizen of United Kingdom.
 International Laws: These laws are created by worldwide physical structure such as
WHO, UNICEF, etc. and are generally recognized by the social unit nations (Fierro,
2020).
2. Secondary sources: It includes magazines, books, articles and journals that are based
on acts, legislation and regulations. They are best source to provide terminologies
that are often utilised in law suits. Moreover, occupational group may also refer to
similar issues and also easily able to realize with the examples. They basically
compound the important message recovered in first hand sources.
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The functions of government in law making and the way common and statutory law is applied
The fundamental law of the UK are partly cursive due to which governance are created
by legislature of UK. The law production procedure is depends on the deuce important
gatherings such as House of commons and house of lords. The government of UK is selected in
every quint years and selected nominees symbolize the house of commons. The government tries
to attend different issues that UK is facing. To resolve such challenges, government proposes a
bill in parliament. The house of lords is the Supreme court which re-evaluates the legal
document if required and suggest some changes. After the completion of evaluation the bill is
sent back to house of commons again to make necessary changes. Once the improvisation are
completed the legal instrument again sent rearward to monarch (Buckel, 2020). The queen
finally approves the bill and then it is gazetted and the act is passed finally. The law making
strategy are:
 Issue emerges on the governments declaration
 Experts are connected
 Cabinet ministers explicate the message
 Content are restructured into legal instrument
 Political party argumentation
 Parliamentary stages
 Legal document passed
 Bill transformed into Act
 The judicial law prepared
In order to apply the statutory and common law into the court it has been detected that
while devising aggregation, functionary law bring up to common and statutory law. These laws
are recorded into year books in order to refer them while taking decisions in similar cases. On a
contrary note, enactment laws are constituted by general assembly and are systematize. The laws
are practical to every national and are superior to common laws.
The legal system of UK are responsible for implementation of laws and policies. UK is
continuously changing and requires significant reformations time by time (Dusunge, 2018).
Involvement of biological science susceptibility under the company act 2006, security of people
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private data are recommended, avoid discrimination and many others in the certain reforms that
are presented in extant legislation of UK.
LO2
Potential impacts of the law on a business along with difference between legislation, regulation
and standards to evaluate potential impacts
Laws and regulations are straightforward the business to preclude themselves against any
dishonest circumstances. It impacts the businesses in both positive as well as negative manner.
Laws bound the directors to follow some pre-determined regulation and utilize them in their
office expound. According to the Companies Act 2006, there are definite responsibilities of the
directors of the firm are that they are responsible for the success of the company for the
betterment of their employees and liable to workout sensible skill among their workforce
(Boichenko, 2020). For example in the firm Nisa in which company preparing to run public
limited firm to raise its monetary resources from the extraneous affairs. The challenges occurred
in such procedure are it may lead to assets de-solution, and second one is that the owners may
loose their governing rights. Going public is not always a better option as the procedure is time
overwhelming, big-ticket and extraneous paperwork encumbrance on the firm. Additive
responsibilities such as, HR and CSR policies comes in the way of the company. Few more
obligations that comes under their way are:
 Safety and health regulations: In UK, the Health and Safety Act 1974 set out
liabilities for the owners of the firm. After declaration of public limited organization,
Nisa have to do risk management and thus supply necessary preparation to their
workers. The organization have to ensure to render safest impermanent environment to
their workforce.
 Data covering: The Data Protection Act 1998, ensures that the private information of
employees keeps on safest mode and should not be exploited by any semi public or
private social group. Nisa being operational within the market place of UK are also
taxable to carry through this law as well.
 Equal opportunities laws: The Equality Act 2010, compel the employers to treat their
each employee in equal terms. The basic purpose of this enactment is to make sure that
there are no favouritism in the intrinsic and extraneous environment of the working
premises occurs on any basis.
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It is a well known concept that businesses in recent world have to operate in complex
environment which is often modifier and full of restrictive confinements. For every
establishment, it is necessary to understand the differences between regulations, standards and
legislations. Regulations are quite challenging for the companies as they obligate the firm to
keep control over their processes and their employees. While legislations influence the structure
of the company and its functioning. It compel the employers to provide safe and risk free
environment to the employees. However, standards are able to provide major benefits to the
firms especially those are small scale companies (Myslinska, 2020). Earlier they may result in
enhancement of operating cost for short period of time but in the long run, they might be
profitable for the organization.
LO3
Unincorporated VC incorporated legal structure
As per the legal law, the company mainly exist in the form of either unincorporated or
incorporated, among which individuals select particular legal structure that could be used to run
and operate particular business smoothly and effectively. Likewise, the unincorporated legal
structure can be stated as collection of individuals that are on position of management of
committee. Along with it, they are personally liable for group of action so they should effective
analysis associated risk while taking any particular decision. So, it is legal structure that is
mainly suitable for individuals that have low income and not have purpose to employ more staff
or acquire property (Beames, 2017). On the other hand, incorporated organization structure is an
group that have own legal entity thus they are not personally liable for the action of group. Thus
they are mainly intended to raise large sum of money or enter into legal binding contract. So, all
these are major difference between Unincorporated (not regulated by legal body) and
incorporated legal structure (regulated by at least one legal body).
Different type of business organization and legal structure
There are different types of business organisation having various legal structure that
contribute in smooth flow of enterprise and growth and expansion of firm. Sole traders,
partnership and registered company are various type of organisation that can be explained in
detailed as follows:
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1. Sole trader: These are firms in which a person, self-employ himself in order to effective
run and operate business with an objective to earn huge profit margin. Thus the company
does not have legal entity separate from its owner.
2. Partnership: It is formal agreement between two or more individuals to effectively
manage and operate business through sharing profit and loss in equal or appropriate ratio
(Clarkson and Miller, 2020).
3. Registered company: Company that have formed and registered with appropriate
statutory authority of country as corporation thus it has to comply with many laws of the
country. Thereby periodically report to the government about the states of affairs of the
organization.
Classification of company
1. Public: Company that have ownership with public shareholders or firm is able to freely
trade its share on stock exchange or open market in order to get enough capital to start
and run business smoothly (Miller, 2021).
2. Private: These are firm that are owned by private individuals and cannot offer their
share to general public in order to get capital to effective operate and sustain business.
3. Limited: It is the company in which limited amount of liability has been undertaken by
the company shareholders or the amount of shares in which it has invested.
4. Unlimited: On the other hand, this firm have unlimited liabilities that is shareholders are
liable to pay all debt of the company through making use of their personal asset or
earning (Miklian, Alluri and Katsos, 2019).
Formalities required related to starting and registration of business
1. Management of company: The manager is responsible for performing all task related to
planning, organizing, integrating, controlling and monitoring key activities or efforts that
has been made by each member so that desired goals can be achieved.
2. Appointment of directors: As per the company act 2013, director is an individual that
have been appointed and designated as position of director in the company which would
be responsible for governing all affairs of the organization (Smith and Williams, 2018).
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For example: In case of public company there are 3 directors needs while in private only
2 while the maximum director that can be appointed is around 15 that can be extended
through passing special resolution.
3. Company secretary: In order to recruit company secretary a proper notice is given,
board meeting is being conducted and written consent has been taken from the person
that has been appointed. Finally, a DIR form need to be filled along with ROC within 30
days of appointment of company secretary.
4. Auditor: The first auditor is appointed by the company through passing B/R within 30
days’ period from the date of incorporation of the organization.
5. Role of stakeholder: The stakeholders such as customers, investors and owner of the
company are important stakeholders that plays important role in smooth functioning of
operation and achievement of goals (Com, 2019).
LO4
Brief overview of Contract law, employment law, Company law
Contract law: It is the law that involves agreement between the two parties or people and
business related to the way profit and loss, capital will be shared in equal or specific ratio. Thus,
it helps in defining rights and liabilities of individuals towards the each other so that there are
less chances of conflict in future circumstances (Kramer and Sorabji, 2019).
Employment law: It is another law that govern as well as regulate relationship between the
employees and employers through clearly defining roles and responsibilities of each other. Such
as employees need to be complete all task asked by the employer in return to get salary or wage
while employer has to ensure health and safety of employees and provide it appropriate salary
for work done.
Company law: It is law that is governing the right, relationship and conduct of person or
company or it helps in understanding the way company are being formulated, funded and
governed for achievement of end goals.
Salient legal points of each case;
CASE 1
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It is case of Gordon that work as salesman at orange computer LTD store that has been
promised to provide annual salary of £10,000 and commission around 9% for selling computer
and peripherals. But due to more competition the business sales has been negatively impacted so
Gordon was informed that they will only pay the commission amount and he has to forgo his
three years’ salary (Eisenberg, 2018). But in 2016, company start growing so Gordon feel that it
should get the wages or salary that are due for three years.
CASE 2
Janet one of the customers of Virgin media has arrange to purchase and install internet
package costing around £35.00 per month, along with the phone line with monthly rental of
£11.00. The engineer came and make arrangement at 9Am but Janet is not able to find phone
line and he has not come till 3 weeks. So the major issue is that it has been charged for whole
package from the day it has been installed thus Janet is extremely upset (Beale and et.al., 2019).
CASE 3
While, in the third case, Blackhorse Limited is an security company that have 50
employees and four main customers that has lead bad debt of around £100,000. So due to bad
debt the company needs to pay the due amount to the creditors as the creditors has issue a
winding up petition. So the issue is that what are the different options available to client to avoid
compulsory winding up.
Legal solution to each of the problems
CASE 1
For the first case, the legal solution is that as per the contract act and employment,
Gordon is entitled to its salary which has been decided around £10,000. So the Gordon has to be
given salary of both 2015 and 2016 along with the commission when company have started
growing and expanding its business operation. As there is already a contract or agreement
between both Gordon and company have been made (Arvind, 2017).
CASE 2
For the second case, the solution i.e., Janet is customer that has accepted to take services
from Virgin Media of internet package. But for 3 weeks it was not able to get the services. So
the solution is that it will only make payment for services which it has avail such as 3 weeks will
only be charged.
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CASE 3
The solution for the third case is Blackhorse Limited needs to find alternative method that
could be used by the company to get the bad debts so that due amount can be paid to the
creditors.
Justification for the advice and solution
From the above it can be stated that all the three suggested options can be helpful in
resolving the key issue that are arising due to ineffective performance and not abided as per the
contract made previously between the two parties.
Compare & contrast the effectiveness of these recommendations
The above recommendations are effective as they help in resolving key issue that are
present in the case study such as Gordon has to get it payment of salary that has been due
because of economic crises or slow growth of business. While, Janet after 3 weeks the internet
connection has been added so it has to make payment of only services it has make use (Com,
2019). On the other hand, for case of Blackhorse Limited recovering amount for customers of
bad debt is best option for growth and sustainability of business.
CONCLUSION
From the above report, it can be concluded that different laws help in maintaining peace and
harmony is society through resolving their issue in effective manner. Moreover, there are range
of laws that company needs to abided while formulating or starting a new firm in the external
environment. At last it can be stated that the study has helped in understanding that laws have
both positive and negative impact on business.
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REFERENCES
Books and Journals
Arvind, T .T., 2017. Contract law. Oxford University Press.
Beale, H and et.al., 2019. Cases, materials and text on contract law. Bloomsbury Publishing.
Beames, E., 2017. Technology-based legal document generation services and the regulation of
legal practice in Australia. Alternative Law Journal, 42(4). pp.297-303.
Clarkson, K. W. and Miller, R. L., 2020. Business law: Text and cases. Cengage Learning.
Com, B., 2019. Business Regulatory Framework.
Eisenberg, M .A., 2018. Foundational principles of contract law. Oxford University Press.
Kramer, X. and Sorabji, J., 2019. International Business Courts in Europe and beyond: A Global
Competition for Justice. Erasmus L. Rev., 12. p.1.
Miklian, J., Alluri, R. M. and Katsos, J. E. eds., 2019. Business, peacebuilding and sustainable
development. Routledge.
Miller, R .L., 2021. Business Law Today, the Essentials: Text and Summarized Cases. Cengage
learning.
Smith, D. G. and Williams, C. A., 2018. Business Organizations: Cases, Problems, and Case
Studies. Aspen Publishers.
McCorquodale, R., and et.al., 2017. Human Rights Due Diligence in Law and Practice: Good
Practices and Challenges for Business Enterprises §. Business and Human Rights Journal, 2(2).
pp.195-224.
Stepanovienė, A., 2017. The role of interrelation between language and law for mastering legal
English.
Malsukhum, V., 2021. Differences Between the English and Australian Legal Cultures. In Legal
Culture, Legality and the Determination of the Grounds of Judicial Review of
Administrative Action in England and Australia (pp. 31-91). Springer, Singapore.
Fierro, M., 2020. Scholars, Jurists and the Legal System٭. In The Routledge Handbook Of
Muslim Iberia (pp. 290-317). Routledge.
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Buckel, S., 2020. Preface to the English Edition. In Subjectivation and Cohesion. Brill.
Canestrari, S., 2019, July. English translation of the paper of" A good good law": Law nr. 219 of
2017 and the doctor-patient relationship. In Perspectives of law and culture on the end-
of-life legislations in France, Germany, India, Italy and United Kingdom (pp. 115-120).
Nomos Verlagsgesellschaft mbH & Co. KG.
Dusunge, R.B., 2018. Legal English: Background and Perspectives. Language in India, 18(3).
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