Business Law Making Process : Assignment

BUSINESS LAW

TABLE OF CONTENTS
INTRODUCTION...............................................................................................................1
TASK 1 ..............................................................................................................................1
Various Sources of Law ................................................................................................1
Law making process and role of government as statutory laws are applied in justice
court................................................................................................................................2
Contract, Employment and Company law has potential impact upon enterprise..........3
TASK 2...............................................................................................................................5
Various types of organizations are formed and legally managed..................................5
Business organizations are funded and managed.........................................................6
TASK 3...............................................................................................................................9
Recommendation of appropriate legal solutions for resolving a range of disputes.......9
CONCLUSION.................................................................................................................11
REFERENCES................................................................................................................12

INTRODUCTION
Business Law refers to the body of laws of government that runs the commercial
activities. This governing body deals with both the private and public law issues. It major
regulates the hiring practices, corporate contracts and sales of customers’ goods. Trade
laws are the commercial law that has impact over the businesses in terms of sales,
trade and merchandising (Velenturf and Jopson, 2019). Business laws bounds the
businesses of the organization in the way in which they do business. To run a company,
the enterprise needs to follow the laws and ethics of the business. Any newly start up
business needs to adhere the business laws.
The project report will explicate various sources of law. It will determine the role
of government in law making. The study will illustrate the example of company about
how contract law has potential impact on enterprise. Report will elaborate by doing
differentiation between regulations, legislations and through standard analysis for
identifying the potential impact upon the business. Furthermore, it will explain how
various types of organizations are legally formed, funded and managed. Assignment will
provide recommendations in order to resolve range of disputes through using examples.
Lastly, report will provide legal solutions in order to resolve range of disputes and
conclusion.
TASK 1
Various Sources of Law
UK's constitution refers to parliamentary sovereignty as their key principle.
Parliament is said to be a legal authority that is supreme in UK. Members of Parliament
has the power to pass any law or to end. Legislation of the parliament cannot be over
ruled by the courts (Vagts, Kohand Buxbaum, 2015). It is supreme in against of the
government institutes that includes judicial bodies and executive. Parliament has also
power to change any previous laws that has been written by their ancestors. Thus, the
Parliament can be said as “Sovereign”.
Source of law – It refers to an origin from where a law is being obtained. These are
the constricting rules that helps to govern a territory. United Kingdom of Northern
Ireland and Great Britain consist of four countries namely, Scotland, Northern Ireland,
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England and Wales. Here, some laws are applied in UK as whole but some laws are
applied only for three countries. Various sources of law are explained below -
 Legislation and Parliament – The parliament in considered as legal
authorization in the UK that can end or create any law. None of the court can
overrule its laws and legislation. Thus, it is considered as a source of law. This is
the authority that has power to approve the laws for applying in four countries.
650 members are present in House of common in Parliament. They elect the
members by using the Post system and first past. The candidate is being chosen
that has the highest number of votes by the electors. 800 peers are preset in
House of Lords (The Legal System of the United Kingdom, 2019). Queen has the
right to appoint 600 out of them. Other members are the people in House of
Lords that has given title of Lady and Lord and one of them is a senior priest in
Church of the England. Some countries have the power to pass the law in
devolved matters. It includes Scottish Parliament, National Assembly and
Northern Ireland. The countries in which these laws are passed are applied on
only those countries.
 Common Law – Common law is being made under the legal system of England
and Wales. The decisions which is being taken in the courts of the England and
Wales are used as a base for making other laws in the region. (Scholes, 2015).
These laws are made on the basis of the cases that has passed over the
centuries. At the time of starting of laws in the Wales and England since from the
11 of the century.
 European Union – The directive is being appointed for implementing the state,
national law and regulations that has influence over member states. UK is a
member state of European Union. Thus, this means that laws out there have also
had implications in United Kingdom.
 European Convention on Human Rights – Being a member state of European
council, UK is signer of the European Convention on human Rights (Solomon,
2017). Human Rights Act 1998 comes into the force. Thus, it makes courts
enables in order protect the rights of European convention in UK.
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Law making process and role of government as statutory laws are applied in justice
court
The role of the government in law making process is to pass the law and
evaluating and monitoring the actions of the courts. The role of the government is to
decide which laws need to be implemented and to manage those laws is the
responsibility of the government. The new law introduced in UK is known as bill. The bill
needs to be agreed by the houses of parliament (both) as well must receive a Royal
Agreement by the queen. In order to become a law of parliament the above conditions
should be essential to be followed. Initial an introduced bill is termed as “First reading”.
This is said to be an official notice that bill is being proposed in the court. At the flour of
houses this bill is said to be “Second reading” where the principles points are being
considered MPs looks an examined this bill in detail (How are laws made in the UK?,
2015). The bill is being voted by the members of the parliaments and this is called as
“Third Reading”. If it has majority of the votes than it is gone through House of lords.
Lastly the Queen gives Royal assents to this bill and it becomes Act of Parliament in
UK. There are two ways through which laws can be formed in UK. This is explained as
follows -
 Common Law – This refers to the case laws and are of two types first one is the
law which is passed by the judgements to becomes the new law. Second one is
existing laws that are passed by the judges that creates new distractions and
new boundaries based on their interpretation (Morley, 2016). Various
government agencies also frame laws that are called as regulatory laws. They
have the authority to follow up the laws that are created by the legislature.
 Statutory law – There are the laws that are passed by different government
agencies in various countries. State government and federal passed the laws.
Cities and towns has the power of laws that are passed by the ordinances. The
motive behind introducing the new laws is to meet the needs of citizens in order
to resolve their issues and for formalizing the law that is already in existence.
Contract, Employment and Company law has potential impact upon enterprise
Basis Contract Law Employment Rights
Act 1996
Company Act 2006
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Legislation It is body of laws that
governs the contract's
in Wales and England.
It refers to the
engagement among
the two parties. It
bounds the two parties
by an agreement and it
is also enforceable by
law.
This law is an Act of
parliament in UK.
This law includes the
fair dismissal,
reasonable notice
and time off for
progenitor. The
redundancy of the
unfair dismissal is
also included in the
Employment Rights
Act. This Act mainly
deals with the rights
of the employees.
The business needs
to consider this law
by providing the fair
wages and
remunerations to the
workers
(McCorquodale, Lise
and Brooks, 2017).
It is also the act of the
parliament in the UK.
This act includes the
legal formulation,
termination and the
entity. This act defines
incorporation process
of the companies that
are newly formed. It
describes that
companies can now
fulfils their submissions
and duties by
communicated with
their shareholders
through electronically
(Laudon and Traver,
2016). This act now
has described the
director duties as to do
promotion of their
success to the
shareholders. There is
right to sue the director
of the organization in
this act by the indirect
shareholders. The
nominee shareholders
could receive the
company's information
through electronic
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medium.
Regulations This contract Act has
potential impact on the
businesses. For
making a contract valid
the parties should
consider following
elements of valid
contract -
 Acceptance and
offer – An offer
must be made
by one of the
party to another
one as it shows
the willingness
that must be
acceptable by
the other party.
Acceptance
means that the
other party has
to agreed upon
the conditions
and terms which
is being written
by the one of
the party.
Without making
any negotiations
if the party
This law is also
associated with the
flexible working
conditions of the
employees.
Employers are
ensuring that the
employers are
obliged with the
flexible working in
their organization. As
per the employment
particulars, the
employers need to
serve the conditions
and terms of the
employment in the
written form to the
employees. The
organizations need to
disclose the
information of their
business for the
public benefit. Paid
off time is also be
given to the
employees as per this
act. Before the
company is planning
to make their
This act provides rights
to the limited company
that now there is no
need to hire a
company secretary,
the one director is
enough to run the
business operations.
Naming rules of the
company is being
upgraded under this
act. Directors of the
company can now
keep their residential
address secret from
the public record by
providing the service
address. Annual
General Meeting is not
compulsory obliged by
the private companies.
Private companies is
now not bounds to
organize Annual
General Meeting (Zhou
and Wen, 2019). Share
Capital rules in the
private companies is
also being changed. At
the time of company
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agreed on the
terms and
conditions than
it is said be as
the contract is
accepted by the
both of the
parties (Merry,
Davis and
Kingsbury,
2015).
 Consideration –
The
consideration
must be present
in valid contract.
This is important
from the
perspective of
both the parties.
For example, if
one party sales
the goods to the
another party
than there must
be something in
return. Without
having
adequate
consideration no
party will enter
employees
terminated from the
job they need to give
a prior notice of 1
week. The employees
may have notice
period of long
duration under this
act. The employees
are also protected
from the right that
they are not unfairly
dismissed. Minimum
wages of the workers
need to be paid of by
the employers. At the
time when the
employer is in
insolvency conditions
and fails to pay their
staff in this condition
the secretary of the
state will pay some
amount of the loss on
behalf of the
government.
According to this act
redundancy amount
will be paid through
calculating the
service period of the
formulation, the
memorandum of the
association and
articles of the
association needs to
comply by the
company under this
act.
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into the
contract.
 Intention to
create legal
obligations –
The parties
needs to be
make an
agreement that
is bound by the
law and has
legally formed.
Without having
any legal
obligations, the
agreement can
be said as
contract. For
example, A Ltd
sold goods to B
on the faith that
he will pay the
amount of
goods which is
£25 after a
month this
contract is not
legally bound.
Thus, a has no
rights to claim
money from the
employees and their
age.
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B as there is no
legal document
is being signed
between them.
 Terms and
conditions – The
parties which
are entering into
the contract
needs to be
mentioned the
terms and
conditions of the
contract which
is specific and in
clear manner so
that it can be
bind by the
court. The court
will not approve
the conditions if
it is ambiguous
and vague. For
example, a
claim to B that
he will bring
moon for her
than this
contract is not
valid the
conditions are
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not possible.
Standards It will affect the
entrepreneurship
business. As per the
contract law the
entrepreneurs are bind
with the terms and
conditions of the
contract. There must
be an intention to
create legal
obligations. The
company while making
the contract ensures
that they must write
terms and conditions of
the contract on legal
document.
The company needs
to ensure that the
employees get proper
facilitates in the
organization as per
the employment
rights act. They need
to give reasonable
wages and
remuneration as per
this act. The
Employees are
facilitated with the
flexible working
condition. As per this
act reasonable notice
is being given before
dismissal.
As per the company's
Act 2006, the
enterprise needs to
follow the rules and
regulations regarding
Company Act. As per
this act one director is
mandatory needs to be
appointed. This act is
now providing flexibility
to the enterprise. They
doesn't need to
organized, Annual
General Meeting.
TASK 2
Various types of organizations are formed and legally managed
Types of organizations are as follows -
Sole Proprietorship – This refers to the sole trader. This type of business is
carried out by only one person. The legal authority is also of one person. Any business
losses is to be carried by the single business owner (Beatty, Samuelson and Abril,
2018). Thus, it is a major drawback of the sole proprietorship business. The profits and
losses of the business is carried out by the proprietor. The owner makes arrangements
of the funds by taking help of their friends and relatives. Total control of the business is
hands of the proprietor. Here the owner has limited liability.
9

The business of sole proprietorship is being formed by registering the business
name. The owner of the business needs to grant licence from the government. They
need to establish separate finances. The owner needs to report the taxes correctly.
Partnership – Two or more partners when entered into the business can be
termed as partnership. The losses are to be shared by the partners equally. Profits are
being divided equally among all the business partners or as per their capital contribution
ratio. The partners need to pay off income tax returns based on their profits contribution.
Liabilities of the partners are also limited in the partnership. In this the partners can
bring their own money to start up their business. One of the benefit of the partnership is
that risk is being shared. Thus, the loss of the business is not overloaded on the single
person. The terms and conditions of the business can also be adjusted by the partners
as per their suitability and convenience. This conditions may include the withdrawal of
the money by the partners. The money that is being withdrawal for the personal use by
the partners needs to be repaid by them.
The partners need to registered their names as per the formation criteria of
partnership. At least two of the partners needs to share ownership. They need to
mention each partner name in memorandum of association and need to mention their
contribution in the business (Beatty, Samuelson and Abril, 2018).
Corporation – This type of the business has separate lawful entity from its
owners. The liability is unlimited under the corporation. The cooperation control is in
hands of the directors of the business. Cooperation can be incorporated by filling the
articles within the state in which the firm is interested to run the business. The article
contains the information that is related to the business. It includes the business address,
total number of shareholders and number of the directors of the board which are
responsible for handling the management operations.
Number of shares needs to be issued by the corporation and the type of the
business they are running need to be mentioned in the article of association (Epstein,
2018). For looking day to day operations of the business the president is being
appointed by the directors of the board. In the case of the small corporation the
shareholder is one and it is also the director and sole officer of the business. This can
be of three types Public, private and one person. The corporations can be sued by their
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own name as they are apart from the business shareholders. The corporation does not
end by the death of the shareholders, its keeps on going. Shareholders even doesn't
pay off the obligations of the corporation or debts by using their personal assets. Thus,
this is one of the benefit to being in the corporation.
Corporation is being formed by appointing the directors of the company. They
need to submit articles of incorporation to the government. Fee of Paper filing ranges
from £100 to £800, it depends on where the business is being incorporated (Epstein,
2018).
Business organizations are funded and managed
Difference between Unincorporated and incorporates business firms
Basis Unincorporated business Incorporated business
Business
obligations and
liabilities
In case of unincorporated
business, the losses of the
business needs to be paid by the
owner itself through using their
personal property. If the one of the
owner of the business sue against
the corporation than it is for all of
them (Bacon, 2017).
This type of business protects
their owners by making them free
from the liability. Payment of the
debt must be come from the
business investment not through
making owners obliged to pay
from their own personal property.
If one of the owner sue for the
corporation than it is for business
in separate terms not for the
owners of the business.
Deductions
and tax rates
One individualism return of tax is
being filed by the unincorporated
business. Tax rate is high for this
type of business. Personal tax
credits can be claimed by the
unincorporated business they
have the flexibility. For decreasing
the personal income of owners,
On the other hand, incorporate
business files the tax returns on
separate terms. They can also
extend the taxes for later on.
Lower tax is being paid by the
corporation than the individuals.
Incorporated business does not
have any flexibility, they cannot
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they can use the business losses. claim the personal tax credits.
Cost for the
incorporation
Costs of the business can be high.
For the legal help the business
owners can pay the considerable
fees. They can even higher the
lawyer for maintaining the
operations of the corporation and
for setting up the business.
The maintenance costs must be
paid by the incorporated business.
This includes the accounting
records, federal tax and financial
statements preparations. Beyond
this incorporated business needs
to provide legal assistance and
professional assistance. Typically,
the sole proprietorship doesn't
include this costs.
Fillings and
Paper working
Unincorporated business doesn't
need to prepare the quarterly and
annual report. They are free from
the paper work which also
includes preparation of financial
statements.
Incorporated business needs to
make the annual and quarterly
reports where intensive paper
working is also being included. It
includes financial statements
(Bayern, 2016).
Other
difference
Even though the business owner
of unincorporated dies they keep
on going. The investor purchases
the corporation even though they
are existed. Unincorporated firms
can skip the reporting to show in-
front of the public. They can keep
their business private.
Through issuing the stock large in
number the incorporated
companies can raise money.
Incorporated business needs to
show their business reports in
front of their shareholders.
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Funding Unincorporated business can
increase their funding through and
business incubators and a start-up
business loan (7 sources of start-
up financing, 2019).
The funding in incorporated
business can be done through
venture capital and angle brokers.
The business can also raise
capital through retained earnings.
.
Advantages and Disadvantages of the Partnership
Advantages
 The capital of the business is equally contributed. Large amount of the capital is
being contributed as there are lots of the partners in the business. Thus, the
funds of the business can easily be raised.
 The partnership business can easily be formed. The legal formalities are less in
the business.
 It is cost saving as loses of the business is being shared among the partners
(Ashcroft, Ashcroft and Patterson, 2016).
 The risks of the business are also being shared among the partners.
 Having a partner of the different mind set and creative skills can be productive for
the business. Thus, more business opportunities are being created in the
partnership business.
Disadvantages
 Liabilities of the partners is high due to debt burden on them.
 There is loss of autonomy in the partnership.
 There are chances of disputes and conflicts among the partners.
 Stability is lacking among the partnership. Partners need to cope up with the
unpredictable changes of the business.
Thus, from the above discussion it can be concluded that 3 of the friends has
successfully ruining their JPM Publishing business and as their advisor has said to
registered their business as limited company can be helpful. By adopting the
accountant’s suggestion, the firm can easily raise their fund from the public.
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TASK 3
Recommendation of appropriate legal solutions for resolving a range of disputes
Recommendation
Alternative disputes solution — This is generally classified into four stages which is
negotiation, mediation, collaborative law, and arbitration. It allows the parties to come
up with the more creative solutions that court can be legally allowed to impose. This is
one of the effective term that aids to addressed the issues and setting parties outside of
the court. (Zhou and Wen, 2019).
Case 1 — In this case firm are not able to pay the amount to their creditors because
Champion Ltd faced the financial problems due to decline in its customers so, Firm are
not able to pay the loan amount to the bank as well they not able to pay their liberalities
to creditors. Thus, creditors are afraid that firm not pay their money timely, so they apply
for court and the low is winding up petition.
Solution — In this case the creditors apply the winding up petition. It is a legal action
taken by a creditor or creditors against a company that owes them money (although
others can also petition). Thus, court is favoured the creditors as firm pay all the money
to creditors in any situation. Thus, to reduce the creditors firm sale their assets and
shares in the market and firstly they payment all the money to creditors as reduce the
creditors. Therefore, this act is favoured the creditors because creditor has valid reason
to obtain their money. In this given case, the creditor can ask for the negotiation so that
they can claim for their money that have invested in company. Henceforth. Creditor has
to negotiate them and for this they must sell assets of the firm. So, compensation can
be given. Therefore, Champion Ltd should sale their assets and make payment to the
creditors to reduce the liability.
Case 2 — In this case, Mr Anderson was the CFO in Amber Ltd. On the other side, A
competitor, Beta Ltd offered Mr Anderson a more attractive role as its CEO. Thus, Mr
Anderson cannot apply the resignation letter according to the procedure and contract. In
this contract of employment that Mr Anderson should give them 12 months' notice to the
organization, but they do not give the notice and firm are not accept because they not
follow procedure so this is creates the disputes among Mr Anderson and Amber Ltd.
Thus, to resolve all the issue firm can suit the Mr Anderson.
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Solution — According to the Alternative disputes' solution firm can used the arbitration
method. In this method firm go to the arbitrator and solve their problem outside the
courts. The dispute will be decided by one or more persons (the "arbitrators", "arbiters"
or "arbitral tribunal"), which renders the “arbitration award" (Velenturf and Jopson,
2019).
In This case study arbitration method will be used to make judgements on the
parties as per the given case study according to their knowledge. This is the third party
decision both parties are legally binding up, and they both follow the decision of
arbitrages. Thus, Arbitration is often used for the purpose of resolution the problem of
commercial disputes, particularly in the context of international commercial transactions.
In certain countries such as the United States, arbitration is also frequently employed in
consumer and employment matters.
In this case arbitrator has listened the both parties, afterwords, they made
judgement in the favour of Amber Ltd. From this, it can be stated that Mr Anderso was
in fault as he didn't follow all the procedure that has already mentioned in company
contract. So, he cannot leave the company before competition of the notice period of 12
months. If he do, so then he has to pay the penalty. Thus, Amber Ltd should use the
arbitrator method to resolve the problem. Therefore, the solution of the arbitrator will
bind both of the parties. In this given case study, Mr Anderso is in fault as he breaches
the company contract so the decision of arbitrator will bind on him.
CONCLUSION
From the above project report it can be concluded that Business law refers to
legislative body of the parliament in the UK that governs the trade and E-commerce
business. It has been summarized that the bill can become a law of the parliament
when it receives the royal approval from the queen and from both the houses of the
parliament. It has been determined that employment law has potential impact upon the
business operations as the corporation need to adhere the rules that includes fair
dismissal, fair wages and redundancy polices related to their employees. The
companies Act has generally rules regard to its incorporation. It has been determined
that there are three types of business namely, sole proprietorship., partnership and
corporation and each and every business is legally formed and managed.
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