Sources of UK Law and their Impact on Business

This report discusses the sources of UK law and their impact on business operations. It covers the role of government in law making, application of statutory and common law, and the impact of company, employment, and contract law on businesses.

BUSINESS LAW

INTRODUCTION
Business law is related with the commercial as well as trading activity as undertaken by the
company for its business purpose. Under business law, different rules, regulations and provisions
are there which has to be complied by every business organisation at the time of undertaking of any
commercial business activity. It is associated with the formation as well as incorporation of new
business enterprises thereby defining terms and conditions under which new business organisation
can be formed. The present report is related to application need of the various UK Laws. It will
define brief meaning of all the sources which has become essential part of UK Laws. Also,
emphasis will be made regarding the role and procedure of government at the time of making law.
Further, explanation related to statutory and common law application in the justice courts will be
provided. Report will also differentiate between legislation, regulations and standards along with its
impacts on business. It will also examined various laws relating to the company, employment and
contract law with its influences on business operations. At last, legal advice and recommendation
related to two case study will be provided for making an appropriated conclusion of the same.
MAIN BODY
TASK 1
a) Defining sources of UK Law.
Parliament has the power to design the concept or principle of the UK constitution which
makes the Parliament with the identity of highest legal consultant which can have the right to either
create or makes different laws prevailing in UK as well as its member states. Thus, sovereignty in
parliament resulting in enacting the legislative body to bring changes in country. Before making
any law, a Bill has to be passed to both the Houses such as House of Commons and House of Lords.
After that it is required to take the consent of the Royal Assent by which the law is to be
implemented or established.
Sources of law are defined as
origin of laws, rules as well as regulations which acts as a binding rules and norms for every state
(Management Association ed., 2015). It enable any state in making governing rule over its territory.
It encompasses of different parts which are as follows:
Customs law: This law mainly
runs from the ancient times. As in this law the laws and regulation are carried forward to provide
justice to parties. Thus, in such aspects the same laws are running in recent time to get fair decision
to parties in respect of opposing to any illegal activity. Thus, in such aspects customs are undertaken
in respect of amending the exiting laws so that they can secure more rights and also protect the

interest of the citizen in better way.
European Law – The European community has become part of the source of UK law since 1973,
at the time in which UK became member of the European Economic Community. This laws is
mainly imposed in respect of protecting the rights of the citizen of the European people. Further the
European Law has some part:
The treaties – Is related with the formation of aim which are related with imposing of legal
responsibilities on the member states including the Treaty of Rome 1957, the Single European Act
1987, etc. for maintaining equality in employment.
Regulations – It helps in bringing uniformity of law throughout community by considering effect
on all member states immediately after issued.
Directives – Implied for proper management of law among all the member states for making it if
similar nature and not having same identity. It lay down objectives which are required to be attain
by each member state and implement it in member state by national parliaments.
Decisions – It empowers different parties with authorities and power to do some work or restricting
or preventing others from performing or doing something.
Parliament – Under this source of law, i.e. Direct Legislation and Indirect Legislation (Bacon,
2017). Parliament law is also known as statue laws which is based on written constitution as the
judgement are given on the bases of the laws which are already written in the constitution. The
direct legislation is related with Acts of Parliament which has been created by passing a Bill through
various processes under both the Houses. Indirect legislation is formed as per the directions of a
regulatory body. It can be government or a local authority. These regulatory bodies are having
power as given by the parliament so as to legislate under an enabling act.
 The first stage of Bill for becoming act is started with the introduction and first reading in
House of Commons and then in House of Lords.
 The second reading consists of debate and speech by minister proposing the bill. Here,
voting is done for getting result. The bill is passed if majority wins.
 In committee stage of 20 – 45 members, Bill is inspected and required corrections are
suggested.
 In the third reading, a short debate focusing on core aspects of the Bill are considered.
 At the last stage, Bill is required to take Royal Assent from the Queen, before it is
considered as Law.
Delegated Legislation – They are formed bodies outside the Parliament by taking exercise of all
the legislative powers as delegated by the Act of Parliament. The legislations are as follows :-
 Orders in Council – It defines provisions related to the Emergency Powers Acts 1939 and
1984, which grants power for making law in the national emergency situation to the Privy

Council.
 Statutory Instruments – It provides Secretary of each member state to formulate rules to
protect credit facilities as used by the users. Are basically framed by the government
department so as to execute principles of policy set down by Parliament.
Regulations for implementing law from the EU – It provides authority to the ministers and
government departments to implement directives, treaties & its related provisions in each member
states (Cleaveland, Dutcher and Epps, 2015)
 Bye Laws – Are formed by local authorities and regulating bodies having statutory powers
such as London Underground and Network Rail so as to regulate all facilities as provided by
them.
 Case Law – Also known as Judicial precedent and is built on doctrine of stare decisive. It is
related with the jurisdictions of English common law. Judgements passed by judges in
crucial cases are recorded and kept as sources of law. In case of no legislation, judges makes
decisions as per their own senses related to wrong and right about the case and decide
dispute with the help of first principles.
b) Role of Government in process of law making along with application of statutory and common
law
The law is to be enacted by the parliament and thus they had power to establish laws in
countries. The process of making a law starts with the formulation of the Bill by the ministers and
other government bodies who are proposing to bring in such change. The new Law or Act is made
with the help of Parliament and its houses. The process of making law starts with:
The public authorities examines the need of the law by reviewing the condition of the
society and than accordingly the bill is to be initiated. The Bill is presented before the cabinet
ministers who wants to bring in changes in the existing parliament or regulations. The proposal in
the draft form is introduces as a Bill in Parliament. It is introduced for the first reading in the House
of Commons where all the members takes a look on the bill introduced and then move to the House
of Lords (Morley, 2016)In the first reading procedure of Bill is done. Also the date for second
reading is set decided in the first reading.
In the second reading, debate along with short speech by minister proposing the bill is given.
The main aim of this reading is to seek voting for evaluating the result. If votes are in majority, bill
is passed to committee stage where there are 25 - 45 members who are appointed for making cross
examination of the Bill clause by clause. Amendments required if any is proposed and Bill then
moves to its third stage. In third stage, debate which is having focus on the core points of the Bill is

made. All the changes related to grammatical or syntax errors are made in the House of Commons
and major changes are done in the House of Lords.
After all the changes and amendments done from both the Houses of Parliament, the Bill
finally moves forward for taking the Royal assent of the Queen. This royal assent is considered as
very much essential part of the formulation of Law. Thus, after obtaining the approval from the
royal assent, Bill is considered as Legislation.
Application of Statutory and Common Law
Statutory Law – Also called as Legislation or the Statues which is basically a law as passed by the
legislature. A body of law which is a part of the statutes formed. These laws are in the written form
i.e. statutory laws are written laws which can be easily accessible for the purpose of references in
any of the case or subject matter. Such law are created deliberately by the government with the help
of elected legislators and along with the legislative procedure (Allen and Blackham, 2018).
Judiciary is having the option to either interpret or makes enforcement of the statutory law. In this
the judgement is given on the bases of laws written in the constitution and the judges are bound to
follow such condition. In this the case such as Lee V Lee air farming 1960 which is mentioned
under the companies Act. As in this case study the matter is related to concerning the corporate veil
and separate legal entity. In this the judgement is given on the bases of cases written in the
constitution.
Common Law – It is formed by the judiciary over the time phase and as per the requirement of the
new legislation in the member state. Common Laws are also known as Case Laws which are not
passed by any of the legislative body but are framed by the judiciary on its own. Whatever judicial
decisions are passed by the Judges of the courts and tribunals in respect of the important cases are
recorded for the future and further use of them as a basis or principles of law in making decision of
the relative subject matter. The cases which is determined as Industry V Bottrill. 1999. This case
rounds around the sole trader company engages business at large scale. The matters is mainly
discussed in respective of lifting the corporate veil and the definition of the term employee.
c) Impact of company, employment and contract law on the business
Company Law: It is also known as Business law which governs or regulates all the
business operations and working of a company or a regarding the role of government business
enterprises. The company had to work according to the given norms mentioned under the
companies act, 2006. The aim of company law is to provide regulations and provisions for
maintaining and controlling rights, relationship, manner of conducting of business activity of a
particular employee, firm or an organisation. With the help of company's law, a company can be

formed, funded, managed smoothly. A company is defined as an artificial person under the eyes of
law thus having separate legal identity which remains in existence even after members death or
insolvency. Its existence comes to an end only after dissolving it in legal sense (Hopton, 2016). Any
change or amendment in the company's law has to be followed by businesses so as to ensure proper
compliance of it. The major impact arises in case of business activities which is related to
government norms regarding dealing with other business. As sometimes to deal with other company
resulting in bounding various norms which restrict the company to deal for longer time period. For
example – Salomon Vs A Salomon & Co Ltd. In this case the company is separate legal person as a
result it is not having direct relationship between the shareholders and third parties dealing with the
company.
Employment Law: It is related with the rules, regulations and provisions which binds and
regulates the relationship of the employee with the employer among a business enterprises. Under
the employment law, all the terms and conditions related to the process of hiring, recruiting,
selecting and employing are defined which has to be followed and taken into consideration. Thus,
various terms and agreement are mentioned under the employment and labour law, 2016. The
employer duty is to provide proper and healthy working conditions to all its business employees.
Fair and equitable treatment should be provided to all employees and workers for better growth and
development of both the business and employees as well. The impact of employment law arises in
case of strict polices which bound employment to carry it during attaining the work. But it results in
bringing less retention of employees in work premises. This results in causing impact in respect of
increasing productivity and stability of companies in market. For Example – In Pimlico Plumbers
Ltd. and A Smith Case, court ordered that Pimlico has to consider Mr Smith as its employee under
the employment act. Also, he should be provided with all the treatment and facilities which other
employees are receiving under the Equality Act. Thus, he can make use of sick leaves, paid annual
leave etc.
Contract Law: It is associated with the agreement, contract which is entered between one
or more party having common objective or thought process. Thus, both the parties are bound to
follow the terms and condition mentioned under the Contract law, 1919. The agreement entered is
enforceable by law for making it legally binding on parties entering into the contract. It is very
much essential on part of the party to become competent as well as capable of entering into the
contract. The impact of contract law is that it bring fraud in contract and also affects parties loyalty
by dealing in some common matters. For example - In the case of Carlill v Carbolic Smoke Balls
Co, there was English contract law decision as given by the court of appeal. The case was related to
an advertisement which contains specific terms and conditions for achieving rewards on completion
of the specified task. It was a unilateral binding offer which has been made by the company for

giving reward to that person who voluntary accept the offer and perform it properly and correctly.
The company was liable to completing promise as made under the contract and is thus liable to give
reward as announced to person who accept and perform the contract.
Differentiating between legislation, regulations and standards and its impact upon business.
In every organisation, it has its own standards according to which it performs. Also there are
some legislation and regulations which has to be abide by company for its smooth working.
 Legislation – The term Legislation is basically a law or enactment which has been made by
the particular governing as well as statutory body which have been assigned power to
formulate such law as and when required (Nsubuga, 2019). Legislation is used before
becoming a law or an Act of Parliament is known as bill, which is required to obtain Royal
assent from the Queen after it passes. It has regulating power which confines business
operations as per the act made and impact its working.
 Regulations – Are known as orders, rules, provisions having power as well as authority to
make bind functions of any business firms and company. These regulations are defined by
authority having powers to do so in relation with the business activities and operations of a
company. If a company performs beyond its prescribed boundary then penalties will be
charge for violation of such act, which impacts the image of business as well.
 Standards - Standards are known as set defined quality norms and levels which the
company should adopt for better working and performance. It helps in making improvement
in its business performance and profitability level as well. By adopting best and quality
standards as used by other competitive firms, opportunities can be turned into advantages.
TASK 2
Types of organisation with its management, funding function.
A Business is an entity generally formed with the main aim of carrying on any commercial
or trade activities. Motive behind conducting of such business activities is related with providing of
own goods and services to its customers for fulfilling their demands, needs and thus making them
satisfied. Along with customer satisfaction, company also aims at profit maximization and better
performance. The types of business are described below:-
Sole trader - A business which is solely owned, formed as well as managed by the single person
known as the Sole trader. This person runs its business operations with its own skills, beliefs,
thoughts and experiences (Villiers, 2015). Also, the decision making power rest wholly with the
sole trader. Every business operation is directed, controlled as well as planned by the sole trader
without considering interferences of others. All the profit earned and losses incur are of the sole

trader. Further, he becomes personally liable for all the business liabilities and losses arises on part
of business.
Advantages Disadvantages
 Sole trader enjoys the benefit of full
control over the business and its
related decision - making process.
 All the revenue earned and loss
incur in relation with the sole trader
business operations are remain with
the owner wholly.
 Is considered one of the easiest form
of business organisation to operate
and manage as it has only one
director.
 Sole trader has burden of personally
liable for all the business liabilities
as no there is separate legal entity
provision applicable
 When it comes to business
expansion, sole trader faces
difficultly in making arrangement
and raising of fund from own and
thus impact business operations and
growth.
1. Partnership - A business agreement or contract between partners having similar objectives
and ideas. All the partners comes together for carrying on such business thereby sharing all
the profits, losses of the company in the ratio each partner contributes its capital or as
decided by them. Also, liabilities of the partnership business are equally bear by all the
partners.
Advantages Disadvantages
 Easy to form without making
compliance of all the legal
formalities. An agreement can be
entered by all the partners in either
written or oral form (Hansmann and
Kraakman, 2017). This business has
combination of different skills,
experiences and expertise which can
be used for better growth and
business expansion.
 Such business has wide source of
capital which benefits operations in
short as well as long term.
 Lack of harmony among partners
can affect the management and
administration function of the
business.
 Partners after retirement remain
liable for all the acts which had
been by him as a partner.

2. Limited Liability Company – A private company in which the owners are held personally
as well legally liable for the debts up to the extent to which these owners has made
contribution in the capital amount.
Advantages Disadvantages
 In this form of business organisation,
there is no restriction on the number
of members.
 One of the advantage of this business
type is that it limits the liability of all
its members up to the extent to which
they had contributed to the capital
amount.
 Tax benefit is also provided to such
business type.
 Limited liability companies are
having separate entity Independent
from its members and directors who
have formed it.
 On departing by the members, the
limited liability companies adapts the
perpetual succession.
 Formation of limited liability
company is considered as one of the
most expensive business formation
as compared to partnership or sole
proprietorship businesses.
 The existences of risk is also high.
Management and funding process of above business organisation are as follows:
Basis Management Funding
1. Sole Proprietorship In this business type, all the
administrative as well as
controlling rights rest with the
single person i.e. the owner of
business.
All the activities and operations
carries by business, are under the
direction and control of sole
proprietor itself.
Sole traders has to arrange
their business capital on their
own. Savings and personal
financial assistance can be
helpful in business type for
funding its business
operations.
2. Partnership All the partners have equal right In such business type, partner

on the managerial function of
business. Mutual decision are
made by considering every
partners point of view (Erickson,
2018).
contribute from their own
pockets or seeks financial
assistance from relatives, bank
loan for fulfilling business
financial needs.
3. Limited Liability
Company
Limited liability companies are
managed by its owners, directors
and key managerial personnel
having competent authority to do
so.
With the help of financial
institution, company can
arrange for capital needs, loan
from relatives etc.
CASE STUDY – Legal Advise
Case 1
Champion Ltd. acompany receives cash payment for moving its business operations so that
development of new stadium can be done by a premier league club. This shifting results in financial
issues such as default made by company in making repayment of bank loan and creditor's amount
because of decline in customer base. Such case depicts that Champion's Ltd has become insolvent
and incapable in repaying all its dues and liabilities for which creditors threaten company to apply
for winding up petition.
Winding up is defined as a process of legal proceeding in which dissolution of company
takes place. By dissolving company, it sells all its business assets and whatever the amount is
realised is used for making repayment of all the dues and liabilities of the company. Champion Ltd
has to undergo Compulsory winding up procedure because of default made by company in making
payment of loan and creditor's amount (Conley, 2016). Process of winding up start by making
appointment of Liquidator for making proper realization of Champion's assets for paying debt and
distributing surplus remaining as per courts order. In respective of compulsory winding up,court
orders company for winding up of business if they are not continuing their business for longer time
period. In this their assets and liabilities are realised and distributed to creditors and the whole
procedure is to be undertaken by the liquidators.
All the powers of directors ceases on appointment of Liquidator. Also, company can't
conduct its business operations unless it is beneficial for winding up of company. After 7 days of
appointment, copy of compulsory winding up is send to Registrar thereby serving a notice of being
wound up to the Champion Ltd. After realization of assets by Liquidator, court appoints

Commissioner of Court for verification of accounts as well as distribution of funds. Meeting of
creditors will cross examine all financials and decide preferences as well as date for distribution of
assets. Any dispute related to claiming will be resolved by Court.
Case 2
Mr Anderson CEO of Amber Ltd accepts the offer made by competitor firm Beta Ltd by just
giving notice of short tenure period which is breach of employment terms and conditions as
specified in the Amber Ltd employment law.
As Mr Anderson is having access to all the credential information of the company, it can be
one of the threat for Amber Ltd and can become strength for Beta Ltd. As per the employment
contract of Mr Anderson in Amber Ltd, it is specified that 12 months notice had to be given for
terminating the contract, which is not fulfilled by Mr Anderson and by breaching it he joins the post
of CEO of Beta Ltd. It is considered as Breach of contract, for which Amber Ltd can sue Mr.
Anderson and makes him liable for completion of all the terms as specified under employment
contract or can prevent Mr Anderson from rendering official services to Beta Ltd by seeking an
injunction over it. Also, Amber Ltd can sue for making breach of duty of good faith, trust, fidelity
and confidence. It is the duty of all key members and employees to make decision by keeping in
mind its impact on business as well, which is not done by the CEO (Lynk, 2015). All the actions
and decisions made are not in the best interest of company which is to be in good manner as per the
duty of fidelity. Further by sharing highly credential and important information of Amber Ltd
business, it is making default on part of breach of duty of trust and confidence which can result in
business loss to Amber Ltd. Thus, with the help of legal proceeding or arbitration settlement can be
done in such case. In this arbitrators is appointed to settle the disputes out of court and both the
parties are bound to follow the judgement and decision given by the arbitrators. By choosing the
arbitration methods it gets the judgement on speedy bases and also save time. But the disadvantage
is that the decision is bound on both the parties and parties cannot reach to court once the decision
is given by arbitrators.
CASE -
By analysing the case, Mr. Rodgers was key personnel of Sunrise Brokers which establish
Sunrise's precious metal trading desk in month of October 2011. For entering new employment
agreement, termination of 12 month notice has to be done after September 2014 which is restricted
as per post termination contract. Mr. Rodgers signed contract with competitor of Sunrise
commencing on 1 January 2015. Information related to resignation has been given to the company
by Mr. Rodgers on 27 March 2014 without providing full information related to new job offer.

Sunrise stated Mr Rodgers that no notice can be given before September 2014 & resignation
given if any will be breach of contract. Thus he was told to return to work. On this he took period of
annual leave after which he failed to return as a result Sunrise did not paid salary to him (Hodges,
2018). A declaration about Mr. Rodgers being still an employee is given with sanction related to
preventing being working for competitor firm.
Thus, in this case the High Court declared that Company can refuse to give salary and ask
for resign to staff in case there is any breach of contract. So, the result of which Mr. Rodgers
remains employee and is thus restricted under employment contract.
CONCLUSION
It can be summarised that company while performing any business operations either of
commercial or trading nature has to adhere to applicable business law. Compliance has to be made
of rules, regulations and provisions for better working and functioning of the company. The report
has defined that for becoming an Act of Parliament, a Bill is required to be passed as well as
approved from both houses along with that Royal assent needed. Also, it has stated that different
standards and regulations have to be followed by business firms for remaining competitive in the
market place. Statutory and common law are both related to Justice court where these are used for
making appropriate conclusive judicial decision of the subject matter of the case. Both the case
study has been provided with appropriate legal advice so that conclusion can be derived in best
manner.

REFERENCES
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Conley, H., 2016. Gender equality in the UK: Is reflexive and responsive legislation the way
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Partnership business advantages and disadvantages. 2019. [Online]. Available through:
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