Impact of Company, Employment, and Contract Law on Business

This document discusses the impact of company, employment, and contract law on business organizations. It explores the different sources of law, the role of the government in law-making, and the applicability of statutory and common law in court. It also evaluates the effectiveness of the legal system in terms of recent reforms and developments. Additionally, it provides examples of how company, employment, and contract law can impact businesses and analyzes the legislation, regulations, and standards that affect businesses.

BUSINESS LAW

BUSINESS LAW............................................................................................................................1
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Different sources of law...............................................................................................................4
Role of government in law-making.............................................................................................6
.....................................................................................................................................................7
Statutory and Common law applicability in court.......................................................................7
Evaluate effectiveness of legal system in terms of recent reforms and developments................7
TASK 2...........................................................................................................................................8
Using specific example illustrate about how company, employment and contract law can
create impact upon business........................................................................................................8
Legislation, regulation and standards to analyze potential impact upon business......................9
Critical evaluation of legal system and laws.............................................................................10
TASK 3..........................................................................................................................................10
How different types of business organizations are legally formed............................................10
Advantages and disadvantages of unincorporated, incorporated business................................11
TASK 4..........................................................................................................................................13
ADR and its applicability under legal system...........................................................................13
CONCLUSION..............................................................................................................................14
REFRENCES.................................................................................................................................15

INTRODUCTION
Business laws are those type of laws under which rules and regulation regarding
formation of an organization is written. These laws are those specific in nature and deals with
corporate problems. That is why they are known as corporate or mercantile laws also. Under
these laws those important sections are mentioned which helps in providing an concrete structure
for establishment of an organization. They are considered to be important because they are
helpful in forming of an organization which is of business nature. All business recognized under
law and rules for their legal establishment have been mentioned in it. Laws of these types are
related to all type of corporate activities also. Nature of these laws is very dynamic as they hold
tendency to give an concrete structure for an organization to survive. Scope of these laws is
wider in a sense that all the elements related to business organization have been covered by
them. In this file various sources related to law is going to be explained with role of government
in law making, also critical evaluation of law is going to be done. Then incorporated and
corporate organization is to be explained with advantages and disadvantages. Also company,
employment and contract is going to be told. Then in the end ADR is going to explained and
applied into various situations. .
TASK 1
Different sources of law
As per English law various kinds of basic elements are there those are required in
formation of sources. Such sources comprises of those rules and regulation that is related to
society. These are very important sources and are required for law to be formed in related
society. As these sources are very important because it promotes knowledge over various aspects
of law. This acts as an effective element to form base to create a law. It also helps law student to
study sources of law in both practical an theoretical perspective (Barrédy, 2016).
.

Primary Sources: These are very important and basic elements that cover original
content of law. This content is stored under certain heading that is as follows:
 Common Law: These are those types of law that has been given an very important
position in sources of law because they help in generating of those judgments which
becomes an important rule to be followed. These judgments consists of all facts an
summary of the case. Also covers various aspects of it. All this is made in the form of
report for further studying of such cases (Bird and Brown, 2018).
 Legislation: These are those permanent laws which has been enacted by the government
after following proper procedure regarding it in which at starting a bill is presented that
has to go through three hearings then only a bill is able to become law. It is only
applicable in UK after getting Royal assent.
Secondary sources: These are those types of sources which consists interpretation of
various laws that is done for helping out persons to understand concept present in law.
They are as follows:
 Legal Encyclopedia: This is one of the most useful thing which provides information
and meaning of terms in law that is helpful in understanding an overview of law.
 Parliamentary and no –parliamentary: Such publications are those types of
documents in which an order that has been passed by an government is written
and also laws amended are present.
 Law Commission: It is that kind of commission which is helpful in forming of
laws and explaining there impact of it over and society. All this is done by
preparing and report over any kind of condition raised because of an law.
Suggestion is also there in the report.
 Text Books: This play an very important role in helping out those students who
are studying law. In a manner that it creates an core understanding of all basic
concept of different types of laws. This is going to create an awareness about
those laws which can be helpful for them in future.

Role of government in law-making
Government in UK has an very important role to play in formation of law and important
policies regarding it. These are required to be formed for improving of rule and order in society.
These types of rules are to be formed by parliament of UK by going through a procedure
prescribed for it. This procedure has been explained as follows:
First Reading: This is the very first stage that is required for forming of law. In this
only the draft of the bill is presented in the parliament and all important points from it has
been read from this. In can be said that an overview has been given about the bill and no
detailed discuss takes place on the bill.
Second reading: This is the second stage of the process in which the presented bill is
being discussed in detail by members of parliament. At this stage voting is also done over
the bill that has been brought in parliament. Then whip system is used to perform voting
over the bill and also support is gained for the bill. In other words a detail discussion is
taken over the bill and also voting is done through whip system (Bird and Park, 2016).
Committee Stage: This is the third stage of the process to form law. In this stage the bill
is again presented in front of House of commons and then detailed analysis over the bill
is done. Then again bill is send back if any kind of amendment is done.
Report Stage: This is the fourth stage of the process of making law in UK and in this
stage again debate is done over the bill that has been presented to be discussed. Also
voting is again done over the bill that has been presented after doing amendments.
Third Reading: This is the fifth stage of the process in which an discussion is again take
over the bill. Voting is done again for rejecting or accepting of bill. Also to further send it
or not. Also it is checked that amendments done are appropriate or not towards the
society and its people.
House of Lords: After following all the steps that has been mentioned above. The bill is
send over to the House of lords. Again discussion take place in this house and voting is
done. If any kind of amendment is done then it has to be done at this stage. All member
of house of lords are there at this time.

Royal Ascent: This is the last stage of the process and has to be followed. In this stage
Royal Assent has been granted under the act made for it. It is required to be formed in a
manner that the person giving the assent is not required to read it hw just has to sing and
give assent over it. This is necessary because without it no law can be permanent in UK.
.
Statutory and Common law applicability in court
Common law: These are those types of laws that are very important from point of view
that judgments passed by judges fro an particular special law come under this. These judgments
are prepared by judges in an landmark cases. Various kinds of important elements related to an
case is also covered under it. There is no need to make a new law where two cases have same
situations. It is also known as common law or case law. As per this the judges can prepare an
counter law for an law that has been passed but is disturbing peace of society. Also judgments
passed by judges has helped in covering lot of similar kind of cases. These are important to
create an transparency in process of justice (Bodie, 2017).
. Statutory laws: These laws are formed by following proper procedure which has been
enacted by parliament. These are formed through bills that is required to be discussed properly
in both the houses. After becoming an laws it is applicable all over the country and every person
living init. In other words it can be explained as fixed procedure of passing the bill in the
parliament in which it is transformed into an act which is made applicable across the country. It
is the fundamental structure of legal system on which number of statutes is established.
Evaluate effectiveness of legal system in terms of recent reforms and developments
Law s in UK has been changing from very long time that has caused to be development
of laws and has also made life of people safe. Still lot of loopholes exist in the legal system of
UK this is because of complexity that is involved in it. Also these loopholes can be identified
very easily and keeps on interrupting process of justice . This has made lot of lack of
coordination between coping for fighting fro justice. Such kind of loopholes can be fine out or
solved only when change are being brought in the legal system and more flexibility is granted.
Rather then rigidity. The existing system is difficult to understand because of its complexity
because there exist three different parts of legal system in whole United Kingdom which makes

it hard to form a co-ordinations in the legal provisions. It has not been modernised which make it
outdated. This creates deficiency in application the laws and rules in appropriate way. Thus, it
can be said that, there is a need for making significant changes for enhancing effectiveness of
legal system (Gaitán, Herrera-Echeverri and Pablo, 2018).
TASK 2
Using specific example illustrate about how company, employment and contract law can
create impact upon business
Various laws are there which are present in legal system for establishment of a business
organization. Certain specific laws are there which has been formed for impacting growth and
stability within a business organization. Such laws are explained as follows:
Company law: These are those type of laws in which is there to manage an organization
related to business. All the rules and regulations that has been amended under this law is
mandatory for an organization to follow. The rules and regulation specified in this law is given
under Companies act 2006. Under this act all type of legal laws has been explained regarding
formations of a company in legal manner. Such laws are very helpful for a organization because
it protects it from any of the legal issues which can lead to its closer or can get it into problems.
If such rules are violated by any kind of company then action can be taken against them. This is
better understood through this example that is as follows WER ltd has been trying to raise funds
for the company. Though these funds are required in order to expand business. The fund were
raised by the company. These were required for only expansion of business. As funds were raise
d by the company but did not used for the required purpose. Instead it was used for self
satisfaction. In such situation case can be filed against the company (Gerard, 2018).
Employment Law: It is one of the most important law in a way that it is required to
check over the relatrionship of employer and employee. Such laws are made top deal with the
required aspects of both employer and employee relationship. Under these laws various kinds of

regulation has been explained that is required to be followed by employer and employee. These
laws also consists rules regarding safety and health issues that is presents under Employment Act
2002 and Equity Act 2010. Also employees health and safety has to be taken care by the
organization only (Heminway, 2016).
Contract law: These are such kind of laws which are very important from the
perspective of all kinds of transaction to be taken place in an organization. Relation formed with
other organization is based upon agreement. Such type of agreement is that kind of business
which takes place. Also transaction can be carried through such contract as its is valid under the
eyes of law. Special rules and regulation are mentioned under contract. If any reason has been
given specifically and has been violated then a case can be launched against the contractor. The
contract can be violated at this time.
Legislation, regulation and standards to analyze potential impact upon business
Legislation: These are those types of concrete rules which has been formed by
government and proper procedure has to be followed in order to pass the bill to make it a
permanent law. Such legislation are followed all over the country where it has been fomrmed.
Such laws are permanent in nature and cannot be revoked only enhanced. These laws are there to
protect an individual from various aspect which violates norms of society. Also these protect
individual’s right and describe their duty towards society. Major role has to be played by them in
growth of an organization (Hiller and Shackelford 2018).
Regulations: These are those types of instructions that is there to give an ensuring of all
over work in an organization to be performed in smoother manner. They are that type of
reasonable restriction which has been applied on administrative law in an organization. These
regulation has been set-up in form of policies formed by government. In order to establish such
regulations. Only law existing is considered for making an regulation. Such are applicable
permanently in an organization.
Standard: These are formed through legislation and regulation. They are considered to
be prescribed guidelines which helps in maintaining of legality within an organization. Such
guidelines are required in an organization to maintain legal code of conduct in it. These are one
of the most important thing to be followed by an organization. As it leads towards achieving of

goals and objectives of an organization. This is to be implied for smooth selling of goods and
services.
Critical evaluation of legal system and laws
Law is of very wider scope and has its existence from very long time . This covers all
aspects within an organization and also protects society. Laws are so specific in a nature that
they are in almost every part of an country. Legal system of UK is very old in origin. It has been
transformed lot of times but still has failed to cover flaws in it. all these flaws has made the legal
system of UK weak. This has lead towards lack of stability in procedure of getting justice. Legal
system of UK is required to change itself and its procedure because they are very complex in
nature. Laws are required to be evolved in UK so as to match the modern world laws. Also
complex nature of these laws are required to be change. This is going to make legal system of
UK more flexible (Katsos and AlKafaji 2019).
TASK 3
How different types of business organizations are legally formed
Business organizations are that type of organization in which dependency is upon the
needs required to establish business and its type. Various organizations are their which are
required to be dependent upon their nature for its formation. Such organizations can be of any
category and are explained as follows:
 Sole proprietorship: This is one of the most commonly formed organizations and helps
small scale business to grow. These are run by an individual. His fully responsible for
whole of the business this means that all kind of profit and loss is to be handled by him
alone. Other responsibility has to be taken by the owner of the business only. They are
not required to face any kind of problem that is related to liability.
 Partnership: Such type of businesses are formed by two parties that has come together
in order to fulfill common motive. Main motive of these type of business is to earn
maximum profit out of it. Under a partnership firm liability of a partner is not at all
limited and is based upon investment that has been done by the partners. All problems are

faced by the partners together. For formation of such organization legal documents are
not required. A deed has to be made (Lee, 2017).
 Private Company: These companies are formed by the directors and are run by them
only. Such companies consists of shareholders and persons those have done investment.
Also no public person is allowed to buy the shares. These type of companies are majorly
gaining benefit of rebate in taxes and also liability of owner is also limited.. These
company is considered as separate identity then its owner.
Public Limited Company: In such type of company government organizes all kinds of
work over investment. This is gained through public support. Main purpose of this
companies is to provide better services to its customer. Lot of capital is required
in order to set-up these organization. These types of organization is required to
funded and they are issuing shares, making bonds, forming debentures (Ma and
Marquis, 2016).
Advantages and disadvantages of unincorporated, incorporated business.
Incorporate Organization: These are those type of organization that are formed out of
legal existence due to which it has the tendency to bear any kind of contract. This is very easy to
form and also secured in nature and raising of fund is also easy.
Advantages:
 Right of perpetual sequence has to be followed by these types of organization and profit
is earned by the person himself.
 Such organization has an advantage that it can be sued and is separate from its owner.
Disadvantage:
 IN incorporate business it is not easy to disclose the information it has.
 It is time consuming and also money spends is more.
Unincorporated Organization: In these types of business organization main functions
and operations of an event has to be performed for earning of huge profit. Major benefit of such
business is no legality over paying tax and legal complex procedure is not to be followed for
formation. Fund raising is very difficult task and also very hard to arise funds.
Advantages:

 Annual accounts are easy to maintain and company formation process is easy not
complex.
 Also cost involved in this business is low which makes it cost efficient.
Disadvantage:
 Authentication of contract is required for legality of company is less (Ngai and et. al.,
2018).
Major difference among incorporate and unincorporated businesses is as follows:
Incorporated Association:
 Name and address must be decided and attested properly.
 Shareholder and manager are nominated for these businesses.
 Required “Memorandum of Association”
 Apporval of each stakeholder is required.
 Designe of article of association has to be done.
 All documents are to be sent to Companies house.
 The main sources of raising funds is taking loan from bank, issue of bonds, share etc.
Unincorporated Association:
 Actual objective of business has to be set.
 A valid contract should be there when two or more partner.
 Association liabilities are not limited so it is essential to consider amount of share.
 There are various sources of raising funds in this kind of association such as bank loans,
capital, raising funds for private money lender(Katsos and AlKafaji, 2019) .
Some major advantages and disadvantage of companies over partnership firm are defined below:
Advantages:
 Company have the major benefit of over enjoying of right of perpetual succession
 In partnership firm it is not as much easy to raise funds as compared to company.
 Company have limited liabilities and in partnership entity the member have equal
liability.
Disadvantage:

 Formation of the company is not easy while partnership firm easily gets developed.
In context of company the decision-making process requires huge funds on the other side it is
easy to make meaningful decision in partnership firm.
TASK 4
ADR and its applicability under legal system
ADR stands for alternative dispute resolution system it is the process by which a dispute
has been solved that occurs between two parties. These are emerging as an important system in
recent times and are being used by people very frequently. Under this system a dispute arises has
to be solved outside the court. This is considered to be important because disputes are solved
outside the court. Under this various mode are being used they are mediation in which a mediator
is appointed by the parties to help both the parties to come to a conclusion. Then negotiation in
which two persons has discussion with each other and comes to a common point of interest.
Then comes arbitration which is the most commonly use method out of all. Now some scenario
is there in which ADR can be applied are as follows:
Scenario 1
In this case Sarah has been working in a company as secretary for more than 7 years. Also her
performance is also good. After 9 months losing a fight of divorce, she started showing
behavioral changes in her and her efficiency in working also reduced. Her annual review was due
in 4 months. She also got good assessment including the last one. The head secretary is about to
retire in 3 months and it was expected that Sarah is going to take her place. However many of
them is not willing to work under her. Also 3 months ago she also got into disagreement with
two trainees. Now HR is facing problem to promote her or not. So, in this question the solution
that can be use by HR is of negotiation in which a counselor can be brought for Sarah in ordre to
help her come out of this condition. Also she should be given certificate of mental fitness to
further work in this company (Orozco, 2016).
Scenario 2
In this case Peter Romanov is an successful Russian businessman exporting high quality of
vodka among Russian spirits in UK and other European countries. Also he has been supplying

vodka to UK importer from almost a decade. For all exports price was decided 3 months prior. In
September 2019 a new order is formed as per EU rules. After Brexit there was change in
policies and price got fluctuated. UK firm send payment for 17th January 2020and used exchange
rate of order placed in 2019. This was above 10% on contacting the UK importer he was told that
contract was negotiated on August/September 2019 value is to applied as per that. In this
problem an arbitration can be used as an method because in this both the parties is going to hire
an arbitrator who is going to give judgment regarding this. That is going to be applicable over
both the parties (Pacella, 2018).
CONCLUSION
From the above file it can be concluded that business laws are those type of laws which are
very important for an organization to establish itself. Then various laws like contract,
employment and company has been explained with example. Then statutory, legislation and
standard has been explained with differences between them. Further various organization has
been told with advantages and disadvantages. Then in the end ADR has been told comparing
with given scenarios.

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