Business Law Report: UK Legal System, Company Formation, and Disputes

This report provides a detailed analysis of UK business law, beginning with the nature of the legal system, including its sources (case laws, legislation) and the role of government. It examines the impact of law on businesses, covering taxation, employment regulations (minimum wage, contracts), and the legal requirements for businesses. The report then delves into the formation of different types of organizations, such as sole traders, LLPs, and PLCs. Finally, it explores legal solutions for resolving disputes, offering insights into the legal framework for businesses operating in the UK.

Business Law

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO1 - NATURE OF THE LEGAL SYSTEM :..............................................................................3
LO2 – EFFECTS OF THE LAW IN THE COMPANY:................................................................6
LO3 – FORMATION OF DIFFERENT TYPES OF ORGANISATION :.....................................8
LO4 – LEGAL SOLUTIONS TO RESOLVE AREAS OF DISPUTE :.......................................10
CONCLUSION : ...........................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
The law leaves an impact over any business is very essential and vast for an organisation,
they have various kind of business module in UK which plan an important role in business of
company. For understanding depth of this topic we have to go through nature of legal system and
their source in UK, role of government to make law, the impact of various laws have on any kind
of business, formation of various kind of business organisation along with their funding and
management with best solution for resolution of an issue outside courtrooms. These are the topic
which come in the module of business in UK and their source of law(Cejnar, and Duke, 2018).
At time of covering whole topic point to point we know for serious changes of law in UK and
have major scenario within source of their organisation. Nevertheless the essential information
provide us wide view of legal system of UK and role of government play an legal system of
country. Starting topic with basic nature of legal system of UK leads us on rest of legal concept
which mainly create the base of whole topic.
MAIN BODY
LO1 - NATURE OF THE LEGAL SYSTEM :
The UK four countries under them which are England and Wales, Northern Ireland and
Scotland and each of them have separate jurisdiction and courts from law which apply on various
jurisdiction derives from statutory instrument and parliamentary act. They have various courts
and jurisdiction they decides the matter as according to their courtrooms regulation but the
appeal go to Supreme court of UK. Legal system of UK is good and doing well as there is no
written constitution in the country as Queen is the head of state but every authority vests in
government which carry out every executive function which they have significant reform of
constitution sine labour come into force in year 1997(Cowling, and, et. al., 2020). This
government immediately start process for devolution some area of government in the country
forming in UK.
DIFFERENT SOURCES OF LAW :
There are three source of law in United Kingdom before December 31st 2020 but after exiting
from BREXIT they have two sources of law through which they consist law without having
written constitution:

CASE LAWS :
The decision made through judge in court of records or higher court is binding on every
inferior court of country. From going through president of earlier case the judgement of similar
case happen in past which already assists court for having decision if fact of case are same.
When the case has to be decided on similar fact such as new case then case will get treated the
same way as before the principle of stare decisis which meant as to stand by thing decided, court
of have to follow the precedent set through previous case with similar fact and facts which are
similar and not same then judge have options:
1. Distinguish : Fact of case for judge is significantly differ then judge have option of
distinguishing 2 case and they need not to follow decision of earlier case.
2. OVERRULE : Same decision have been made from an inferior court then judge have
option to overrule and not agree with earlier preceding however outcome of earlier case
remain same but not get followed(Baillie, 2019).
3. REVERSE : When appeal have to be raise in higher court then judge can reverse
judgement of lower court if decision made through lower court seems wrongfully
interpreted.
 LEGISLATION :
Legislation is a primary source of law in United Kingdom as this is the only entity which
make law or abolish, this means making new law or altering old laws. Parliament pass a bill
which have to get approved through both houses which are house of lords and house of commons
when bill get approved through both houses then this bill become law of the country.
Statute or act of parliament is important source in making of a new law or alteration of old law as
this is one of a primary source which create law of country beside decision of judge in court.
ROLE OF GOVERNMENT IN MAKING LAW :
This have big role in government which make law in UK as this is only way to make law in
country through the parliament(Hardman, and Rowell, 2021). The legislation is made through
parliament which have two houses, which is house of common and house of lords, the
parliamentary act applies in whole of UK.
The two kind of bill which have to be produced before the parliament:

 PUBLIC BILL : When the public at large want to change the law adopted from cabinet
in programme of legislative government.
 PRIVATE BILL : Bill introduced through non ministerial MP's, the bill have priority in
some days but not every time as lack of parliamentary time.
The procedure which have to be followed for bill to become an act:
FIRST READING : Stage one is a formal reading for title of bill before get published.
SECOND READING : Second stage have general debate in house of lords and house of
common discuss general principle of bill.
COMMITTEE STAGE : In this stage bill get examine before pass amendments of bill have to
be done on this stage.
REPORT STAGE : If amendment done in stage of committee then house vote on any
amendment in speaker and stage select a particular amendment for debate.
THIRD READING : Final stage consider bill for amendment and MP's have last chance for
vote on bill.
PROCEEDINGS IN THE HOUSE OF LORDS : After reading either house if lord amends the
bill this sent back to house of common. The bill get exchange within houses until proceedings
were ended(Adeyemo, 2020).
ROYAL ASSENT : When royal assent received then a bill converts into act.
COMMON LAW :
Decision which have to be made through appellate court or judicial precedent are called
as case law, this system give pre eminence for common law as this consider as unfair to treat
same fact in various manner. Judge refer case law which happen in past for making decision in
present case(Kharisma, and Hunaifa, 2022).
STATUTORY LAW :
This is written act or document which consider as will of legislature. This declaration for
command made through law which have to prohibit or followed in certain action of people. This
is system of rule of law or principle which laid down through legislature which govern citizen of
country. When bill is passed from both houses then this become statutory law. This have to get
followed through each citizen and if they do not then judicial proceeding have done against

citizen and if they do not then judicial proceeding have to done against citizen and court have to
follow the act or law pass through legislation.
LO2 – EFFECTS OF THE LAW IN THE COMPANY:
Laws in the UK apply to all parts of every business and every business has to face the legal rules
and obligations in order for its business or organization to run smoothly and this impacts from
employer to employee from contract to company from the company or industry laws. Ensuring
that your business is compliant with regulatory requirements can help it grow and protect the
business from a costly mistake(Mandal, and Aiyanna, 2019).
• BUSINESS IMPACT:
When a company generates revenue or profits there are legal obligations that affect the company
by paying taxes to HMRC (HM REVENUE & CUSTOMS) which depend solely on the structure
of the company:
PERSONAL ENTREPRENEUR: Within 3 months of becoming self-employed, a sole proprietor
must register with HMRC. If registration fails the sole proprietorship will have to pay a fine of
£100 and after registering the business, completing the annual self-assessment test is a must
requirement and paying the tax due.
LIMITED COMPANIES: There are certain requirements for this company, the company must be
registered with the company house with all directors listed along with the person having
significant influence over the company. Filing the annual tax return with HMRC and paying
corporation tax(Mandal, and Aiyanna, 2020).
• IMPACT ON EMPLOYMENT:

As consistent with the Employment Act a enterprise has felony responsibility for his or her
personnel via way of means of offering them minimal wage , pension , legal responsibility
coverage etc. If There are few felony necessities a corporation have to consist of for his or her
enterprise which in the event that they might be failing achieve this then their commercial
enterprise will face a massive loss :
HMRC : A commercial enterprise ought to need to get registered via way of means of the
business enterprise with HMRC earlier than paying any in their worker.
WORK : Legal responsibility for a enterprise is to maintain a test whether or not a worker has a
prison proper to paintings in UK or now no longer. 8.21
WAGE : Employer has to pay their worker as in line with the National Minimum Wage
furnished via way of means of the authorities of UK that is £8.21 in keeping with hour for the
age 25 and older.
SALARY : Employer have to offer the payslips to their personnel which suggests how plenty
they have got earned of their pay scale duration after the deduction of tax and coverage.
CONTRACT : All organisation ought to offer the written criminal agreement to their personnel
which incorporates their salary, operating hours , contractual rights and responsibilities of the
worker.
• IMPACT ON CONTRACT :
Contracts typically influences the commercial enterprise due to the fact for any agency or
corporation a agreement is need to to have earlier than beginning their enterprise regardless of of
the truth that they’re promoting the product or presenting the offerings.

Contract regulation is concerned in each situation of buying, promoting and reselling the product
there may be a prison elements wherein a settlement is a have to have aspect for any company or
worker with-inside the commercial enterprise global.
LO3 – FORMATION OF DIFFERENT TYPES OF ORGANISATION :
Company formation is the manner of registering the organization with the Companies House that
is a registrar for the organizations in UK , all people can check in the business enterprise via
finishing the web utility shape. After registering , a organization can input into contracts in its
very own call or take possession to his property(McCashin, 2020).
1) SOLE TRADERS : As a man or woman enterprise , sole dealer wishes to sign up with
HM Revenue and Customs to shape a agency and after registering with HMRC sole
dealer should post the self evaluation tax go back to absolutely shape as a enterprise in
UK and want to report an tax go back each year.
2) LLP : There are few approaches wherein a confined business enterprise may be registered
, you can actually sign up the organization on-line with out the approval of the
registration via way of means of Companies House and through a expert enterprise
registration agent or ship a postal to Companies House at once through providing the
agencies call , workplace address , administrators details , PSC ( individual with
enormous manage) records , Memorandum and Article of association. Everything desires
to be there with-inside the data listing in suitable way for the formation of LLP.

3) PLC : Public Limited Company desires to have precise capital for sources and belongings for
the organisation. For the formation of PLC is to record the Article of Association which ought to
sincerely states the reason of forming the organization , capital & belongings in conjunction with
the club with Companies House as no enterprise can take area in UK with out the registration of
the Companies House(Mogaji, 2020).
MANGEMENT AND FUNDS OF BUSINESS ORGANISATIONS :
There are numerous methods through which a enterprise proprietor can manipulate the budget
for his or her employer via which a enterprise can develop withinside the marketplace and lift its
fee. Few of the various methods via a corporation finances may be controlled with the aid of
using the organisation :
• SMALL BUSINESS GRANT has been supplied with the aid of using the authorities of UK
with the neighbourhood government and personal employer through which they offer investment
and provide possibilities to small enterprise proprietors that is to be had for brand spanking new
groups or present one
• CROWDFUNDING offers a platform wherein a corporation can improve the finances with the
aid of using numbers of investments from man or woman traders and purchasers. Company can
supply an fairness in change of the funding or it could offer the offers and rewards for the buyers
in alternate in their capital.
• VENTURE CAPITALS make investments the capital into begin ups and developing enterprise
with a great excessive danger which frequently outcomes in as a exquisite capacity for elevating
the employer. They provide a considerable capital with know-how and take a big hazard which
lead them to anticipate a great rewards returns and make certain that the employer have robust
marketing strategy for the funding who’re supporting in financial increase in a region or
nationwide.

• CROWDFUNDING offers a platform in which a organisation can improve the finances
through numbers of investments from person buyers and purchasers. Company can provide an
fairness in trade of the funding or it could offer the offers and rewards for the buyers in trade in
their capital(Nemeczek, and Pitz, 2018).
• VENTURE CAPITALS make investments the capital into begin ups and developing enterprise
with a terrific excessive hazard which regularly consequences in as a brilliant capability for
elevating the company. They provide a big capital with understanding and take a massive threat
which lead them to count on a full-size rewards returns and ensure that the agency have robust
marketing strategy for the funding.
• MERCHANT CASH ADVANCE is a finance through which groups receives their investment
in trade for a percent of the each day credit score card Income , its simplest for the organizations
who take their majority sale through credit score cards. MCA will offer budget earlier primarily
based totally on common month-to-month income taken through the card.
LO4 – LEGAL SOLUTIONS TO RESOLVE AREAS OF DISPUTE :
ADR (ALTERNATIVE DISPUTE RESOLUTION) is one of the green criminal
machine in UK as it’s far extra bendy , less expensive and quicker compared to the courts
consequently it’s miles extra handy for the humans. There are three methods supplied through
the authorities of UK via which any disputes may be resolved in an handiest approaches :
1) ARBITRATION : Arbitration places ahead a arbitrator who makes an unbiased selection
approximately the dispute. Decision of the arbitrator is legally binding on all of the
humans and later they can’t visit courtroom docket if they’re happy with the selection.

The selections made with inside the arbitration is crafted from the papers despatched and
the provided proof with the aid of using each events. Most of the folks that use arbitration
as a felony answer is the enterprise proprietors as they do not need to visit the courtroom
docket for representing their organisation as it is able to damage the photograph of the
company(Nwafor, 2019).
2) MEDIATION : Mediator with-inside the dispute try and recall answer for each the
perimeters being unbiased to anybody of human beings with-inside the dispute. This
creates a healthful criminal surroundings for each of the events to solve the problem in an
maximum suitable manner. Mediator attempts to discover a answer which allows each of
the events and make each of them comply with a end through which an settlement could
advantage each facets and the settlement might be legally binding if it’s miles a signed
mediation settlement.
3) CONCILIATION : As as in comparison to different dispute resolutions conciliation is
often a loose for the decision and but it’s far much less formal then the opposite decision
systems , it’s far much like a mediation however with one of a kind prison duties.
Conciliator makes a speciality of what each events needs after which come to an end
which enables each of them , the selection which could be taken could be binding most
effective when you have agreed it with-inside the agreement and if any of the events
aren’t happy with the choice then they could get a provide of impartial arbitration in any
other case they are able to select to transport the dispute to the courtroom docket.
ADR ( ALTERNATIVE DISPUTE RESOLUTION ) is the maximum brief and smooth manner
to get entry to the decision of the dispute concerning any problem among the events and they

may select to go along with ADR device in place of going to the courtroom docket due to the
numerous motives that is time saving , no problem of going to the courtroom docket dates and
they could solve the problem in non-public etc(QC, 2022).
M4 – COMPARE AND CONTRAST DIFFERENT SOURCES OF LEGAL ADVICE :
After moving into all of the elements of the unique dispute decision the realization for the first-
class might best be primarily based totally upon the real state of affairs of the difficulty and
which of the dispute decision events are maximum cushty in as consistent with their comfort or
the clause of the agreement. If someone can find the money for then they could virtually go
together with the arbitration as it’s far the maximum quickest technique of the decision machine
and the selection of that arbitration might be legally binding on each events plus neither of them
can attraction or visit courtroom docket for the identical remember no matter of the reality if
they’re happy with the arbitrator’s selections or now no longer(Taylor, 2021). Some would
possibly decide on the mediation technique as it’s far unbiased and the mediator attempts to
return back to an end wherein the choice could gain each events and few would possibly choose
the conciliation method as occasionally it’s miles loose and much less formal and the principle
thing is not like arbitration if the both of the birthday birthday celebration isn’t pleased with the
selection they could select to transport the problem to the courtroom docket. Every dispute
decision has its professionals and cons absolutely relies upon at the scenario of the celebration
and which of the gadget they need to head for to remedy their dispute.
D3 – EFFECTIVENESS OF LEGAL SYSTEM :