Business Law: Legal System, Sources of Law, Government Role, Key Legislations and Regulations

This document provides an overview of Business Law, including the legal system of UK, different sources of UK laws, the role of government in the process of making law, and key legislations and regulations that new businesses need to be aware of. It also discusses the political implications of employment law and contract law on business, and provides a critical reflection of the UK legal system with its strengths and weaknesses.

Business Law

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
TASK 1............................................................................................................................................1
1. Legal system of UK and difference between civil and criminal law......................................1
2. Different sources of UK laws..................................................................................................2
3. Role of Government in the process of making law.................................................................3
4. Key legislations and regulations that new business need to be aware of................................3
5. Political implications of law on business eg: employment law and contract law on business 4
6. Critical reflection of UK legal system with its Strengths and weakness of UK legal system. 5
TASK 2............................................................................................................................................5
Classification of public and private sectors organizations and their legal structure....................5
advantages and disadvantages of different legal structures.........................................................7
Management and funding of business organization....................................................................7
TASK 3............................................................................................................................................8
Legal solutions for business problems.........................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business law governs the business to protect them from the external forces or monitor
them to follow all legal aspects. It deals with the various issues of different law such as private
law, public law etc. It help the business organisation to solve all the legal issues and run their
business properly. The report highlights the different sources of law like statutory law, common
law, EU law etc. and government role in making the law. It explains the steps of statutory and
common law to applied in justice court. The company law, employment law and contract law
make an huge impact on the working of business. It also explains the legal formation of different
business organisation such as sole proprietor, partnership, joint venture, company etc. In the
second section of the report it highlights two cases and address the issues and law applicable to
this cases.
MAIN BODY
TASK 1
1. Legal system of UK and difference between civil and criminal law
UK has three separate legal system: First is for Wales and England, second is for Scotland
and third is for Northern Ireland. They have some unwritten rules that sets rights of their citizens
and the way in which government should act. England and Wales operate a common law system
that helps in combining passing of legislations. These laws are established by passing of
legislation by parliament. They have a sovereign parliament
Parliament is sovereign : It means that the parliament is the supreme authority which make all
the laws or pass the law with his concern. It has the power to create and end any law which can
not be overrule by any court. In different country the role of parliament are varies. Some country
limits the power of parliament such as India while other country like United Kingdom provides
the freedom to the parliament to use their rights and make the decision and law. In UK the
decision of parliament is final decision and no one can override them.
The sovereign parliament refers that the parliament has the power to control the rights
and work as a supreme authority including all the government institutions, judicial bodies and
executives (Abdullah, 2017).
Civil law Criminal Law
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 These laws are related to private rights.  These laws are related to crime and
punishments.
 Civil cases are mostly involved in negligent
conduct.
 These cases are way more serious as
compared to civil cases
 Example Breech of contract  Assault
 If a person loses civil case then they might
be required to pay financial penalty or an
order to change behavior or in rare cases go
to jail.
 In case of criminal cases if a person loses
case them they are more likely to face
incarceration or some type of probation
2. Different sources of UK laws
Different sources of UK law
There are different sources of law like statutory law, common law, civil law and
European law. UK consist of four different countries such as England, Wolves, Northern Ireland
and Scotland. Some law are applicable to whole UK while some law are applicable to the
specific countries.
Common law : It also known as Anglo American law which are based on certain cases
or the decision of Judiciary (Rendon, 2016). It is made by certain judges who consider the both
established principles and statutory law which are based on the earlier decisions.
Statutory law : It refers to the law approved by both house of lords and House of
common with the assent of the Monarch. The statutory law are in the form of written and
published which was enacted by the legislative body. They become effective from the date of
written into the bill of parliament and can be modified or change by the later legislative
(Statutory Law. 2019).
Civil law : It refers to the body of rules which describe the different remedies and private
rights. Civil law are made to solve the disputes between the individuals in various area like
family matters, contract and property law. It is quite different from the criminal law.
European law : It act as a link to resolve the dispute between the EU law and national
law and helps to bind all the national authorities. It operates within the European Union member
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states and has political institutions with different economic and social policies. EU law is a body
of legal agreements or protocol which operates its activity along with legal system.
3. Role of Government in the process of making law
Government play important role in the process of making law. The core function of
parliament is to pass the law, represent the interest of citizens, monitor and control the law.
Before passing the bill to the parliament idea must be generated which passed as a proposed bill.
The proposed legislation is known as bill which start with the House of common and after
completing all the stages it pass to the House of lords. Than house of lords follow the same
stages and pass back the bill to the House of common with the suggestions of amendments.
First reading : In this stage title name is discussed and the sponsors name is revealed to
the parliament than they issue the date of second reading. Now the bill is ready to published for
the debate by the members of the Houses.
Second reading : In this stage the spokesperson introduce the bill and outline the special
point to provide opportunity to the opposite party to provide their views and opinion regarding
the proposed bill (Procedure for passing laws in the UK. 2019). After the discussion and second
reading both the houses votes for the bill that weather they have to pass the bill or not. If the bill
is supported than it passed to the committee stage.
Committee stage : In this stage scrutiny of bill is done with the various amendments and
the committee examines the different clause of the bill. Further the chairperson of the committee
pass the amendments after the voting by the committee members. Than the bill redrafted and
return for the report stage to the houses.
Report stage : In the report stage all the member of parliament go through the
amendments taken in committee stage and the third reading of the proposed bill is taken place.
Third reading : In the third reading stage after all the amendments passed by the report
stage bill pass to house of common and the MP' s vote for passing the bill. If the majority of
people vote in the favour of the bill than it pass to the House of Lords for first reading and follow
the same procedure. After the mutual concern or agreements the bill pass to the Monarch for the
final approval. Only after the Monarch approval the bill become an act.
4. Key legislations and regulations that new business need to be aware of
Ways to applied the statutory and common law
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Statutory law : It is applied by following the different rules like literal, golden and
mischief rule. It is based on the pre defined rules, regulation and act. The judges interpret the
case and go through the different acts to understand the situation of case and determine that
which fact is applicable to the current situation (Vaughan, and et.al., 2019). Judges can not
denied the fact or legal acts in statutory law. It is compulsory to follow the act regarding the case
and than interpret them.
Common law : Common law is based on certain cases. The judges resolve the case on
the basis of the decision which was taken in the similar cases. For example – a customer file
case on the cloth company that they order the baby pink dress but the delivered dress is dark
baby pink. In this case judges make the decision in the favour of company that customer did not
specify the exact colour. If the judge consider this case for it current case and find that in
previous case all the factors are not considered so they can modify or change their decision.
5. Political implications of law on business eg: employment law and contract law on business
Company law 2006 : It help the company to run the business with the efficiency and
effectiveness by applying the different rules and regulation to limit their power. It explains all the
rights and duties of shareholders, employees, customer and board of directors (Hudson, 2017).
The company act 2006 describe the process of forming company, its legal procedure, business
etc. and governed by the insolvency act 1986.
Company law affect the business because it describe the type of business, it application
and whether the business is legal or not.
Employment law : It describe the relation between the employee and employer by
binding them to the legal rules and regulation. The purpose of employment law is to protect the
rights of employee and employer so they can enjoy the benefits (Williams and Scott, 2016). It
includes different legislation, regulation and rights like the equal wages act, safety and security
act, equality act etc. The employment law help the business to protect the rights of the employee
and provide them a safe and secure environment so the overall performance of the company
would be improved.
The safety and security act provide the safe environment like the proper air conditioning,
water supply, ventilation etc. to the employees so they can work in better environment and
improve the productivity of the business.
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Contract law : an agreement become contract after after creating the legal relationship. It
is the promise between the two or more than two party which explains the different terms and
condition regarding the contract and the legal action taken buy the authority on the breach of the
contract (Hannigan, 2018). If any party breach the contract than other party can sue or demand
for the remedies to pay its losses on breaching the contract.
The contract act make huge impact on the business of the company. It help the, to protect
their rights from the wrong practices of the other party by taking the legal actions.
6. Critical reflection of UK legal system with its Strengths and weakness of UK legal system
Strengths: They have their own independent judiciary and compliance. Other than this
arbitration and legislation in UK is cost effective. UK is one of the top most leading financial,
insurance and commercial centres present in the world.
Weaknesses: Have ancient system partly adopted by US and other countries. Parliament does
not approve any aspect of common law as it is an evolutionary process of traditional responses.
They also lack ability to initiate legal proceedings themselves and because of this they are less
likely to complete legal aid application.
TASK 2
Classification of public and private sectors organizations and their legal structure
There are basically two classes of business one is incorporated and another is
unincorporated. Incorporated businesses are corporations while unincorporated businesses are
sole traders and partnerships firms.
Unincorporated legal forms:- These types of businesses are not having separate legal
personality. The main forms of unincorporated businesses are as follows:-
 Sole trader:- Here the control of the business is with a single individual although it is very
risky. They can distribute the assets as they wish because all the assets of the business are
owned by the individual only. Sole traders are like self-employed by HMRC, and they
must have been registered and have to make annual self assessment tax return that
includes the business profits that are treated as personal income(Vaughan, and et.al.,
2019). They may employ staff and can trade under a particular business name.
 Partnership:- It is form of business where two or more legal persons set and run their
business in purpose to generate profit for them. There is a legal binding partnership
agreement to clear out the amount of capital contributed by each of the partner and what
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share of profit they will be getting during the business. As partners, they have to share the
risks, costs and responsibilities to run the business in effective manner. There decisions
making is altogether, and they have to bear out each other decision-making. All partners
are self-employed, and they have to pay out their taxes on bases of their share of the
profits. The partnership and individual partner have to make self assessment returns to
HMRC and a proper record keeping is necessary to show business income and
expenses(Abdullah, 2017).
Incorporated legal forms:-
Limited Company:- It is the common legal form to run a business and is a separate entity.
According to the companies act 2006, a company must have two constitutional documents that
are:- a memorandum that records initial members who wish to from a company and are agreed to
become its members and this memorandum can not be amended. Another document is articles of
association that is a contract between the company and members and setting rules for the
company. The companies act 2006 provides flexibility with the help of different articles that
suits specific needs of the company. The limited company is basically owned by the people who
have invested in the business that are its members. Here the benefit is that personal assets of the
owners are not at risk and finances comes from the members either from loans or from profits
retained in the business. These companies have more capacity to finance as compare to
unincorporated legal forms as they finance themselves with loans and can use there assets as loan
security. If a company is having taxable income than it must be informed to HRM, and they have
to make annual returns to HMRC.
Advantages of having limited company over partnership:-
Partnership firm have few procedural formalities are there and termination of partnership firm is
easier than compared with the limited company. But limited company is having different
advantages as life of the limited company does not end with the life of members, and they are
able to raise funds for there business from its members. During the sale of the business value of
limited company is high as compared with that of partnership firm. It is also a separate legal
entity in the eyes of the law because of which more preference is given by the government. There
are various tax deductions and members are protected against any losses that company may be
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facing (Cheung and Lai, 2015).
advantages and disadvantages of different legal structures
 Sole Proprietorship: Biggest advantage of sole proprietorship is that the owner has high level
of autonomy to run their business. They have no other owner to device their profit. But they
also have a disadvantage i.e. they lack liability protection for business owners i.e. they are
responsible to pay every debt and obligation.
 Partnership: Biggest advantage of partnership is that they can share their responsibilities of
company management and share their ideas with their partners. But they also have a
disadvantage i.e. no personal assets protection for partners is offered.
 Corporation: Biggest advantage of corporation is that they can raise capital by issuing bonds
and stocks they can use it to expand their business or for paying companies obligations. But
they also have a disadvantage i.e. all the shareholders of the company need to pay taxes for
dividend received from the business at their personal income tax rates.
Management and funding of business organization
Management of both partnership and limited company differs from each other as in case
of partnership firm all the members in partnership firm have equal rights and responsibilities.
They together have to manage the business responsibilities, and they share profits as well as
losses equally. Decision making is done by mutual understanding and day to day management of
business need a coordination between the partners, and they bear the expenses together. In case
of a limited company different rules have to followed by the working individuals and a proper
record keeping is there. The responsibility of director is to make sure that all are following these
rules and tell shareholders about the benefits they will have during there contribution. There role
is to manage and pay corporate tax on time so that business can run smoothly.
Business organizations need a huge amount of financing to grow there business in right
direction. There are different options for the firm to have funds in hand:-
 Personal funds:- It is the easiest way to fund businesses and also the quickest way. It is
somewhat risky but if the owner is having funds then they can invest on their own ideas
and no need to depend on other sources for getting funds(Vaughan, and et.al., 2019).
 Bank loans:- Company can have funds with the help of banks as it is the most secured
and risk free organization to take loan from. Banks provide loans at a particular rate of
interest in both unincorporated and incorporated businesses. They give advantage over
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overdrafts and the only need to worry about is making a regular instalments. They
provide the loan at the cheapest options as compare with that of credit cards or overdrafts
and businesses can have tax benefits as well.
 Angel investors:- These investors have funds, and they look to invest in higher rate of
returns. It is less risky than debt financing and there is no need to pay back if business get
fail due to some reasons(Cheung and Lai, 2015)..
 Venture capital:- For investing for either start-ups and small businesses having high
risks venture capital is financing option for the firms. They are ready to provide guidance
and expertise as they invest in those areas where they have proper knowledge. The source
of funding is high and there is no need to refund the money.
TASK 3
Legal solutions for business problems
Every business organisation faces some kind of business issues in form of poor cash flow
management, acquisition of capital, employee training and selection related, marketing strategies
etc. It is required on the part of management of the company to have effective as well as strong
control over business operations for gaining competitive advantages in the market place (Yang
and Li, 2017). If any company got stuck into legal matter, then it will be considered under the
Companies Act and other provisions norms as specified as well as applicable. It is duty of every
business organisation to make proper compliance and adherence of applicable business rules,
regulations and other norms for remaining out of penalty provisions.
Case 1: Appropriate steps taken by Regent Vision Ltd to communicate with their
employees as to fulfil obligations under the Health and Safety Act 1974
The present case is related to taking of appropriate steps Regent Vision Ltd to communicate with
their employees as to fulfil obligations under the Health and Safety Act 1974. This case study
will be focusing on points to be focused on for the next board meeting as to the legal
requirements and indicate the steps which the company should be taking.
There are various health and safety related legal requirements that are required to be fulfilled by
the company such as: First and the foremost requirement of the company is to fulfil and adhere
health and safety Act 1974, electricity at work regulations, 1994, work timing regulations 1998,
control of hazardous substances at work, reporting of injurious diseases and dangerous
occurrences regulations 2013 etc.
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Other than this company also need to focus on various regulations such as:
 They need to maintain and update their equipment’s, workplace, devices used within the
organizations etc.
 Company should also focus on keeping their workplace environment clear with proper waste
management system.
 Ensure whether there is proper provision of training, information and instruction.
Steps to be focused on by the Champion Ltd. Are as follows:
 First of all communicate with all the employees and as what are the health and safety related
issues they are facing at the workplace.
 Then appoint a lawyer who is expert in explaining all the legal requirements related to health
and safety requirements that are required to be fulfilled under Health and Safety Act 1974 at
workplace.
 Communicate with the lawyer to ensure that all the legal requirements to ensure their
employees safety are identified and fulfilled.
 Check whether requirements for safe operation like better workplace environment,
maintenance, effective and well-maintained equipment’s, systems are present or not.
 Conduct an audit to check whether all the employee’s health and safety requirements under
Health and Safety Act, 1974 have been fulfilled or not.
 Afterwards conduct a risk assessment and check suitability and sustainability of the
workplace.
 Conduct an audit in order to check whether proper periodic breaks are provided to the
employees within fixed regular intervals or not.

Case 2: Employment law
Issue: The present case is about Charlotte who is employed as an accounts clerk in the finance
department of the company has been asked by a friend Daisy, who runs her own dress making
business if she could do her bookkeeping in her spare time. This case focuses on whether Under
employment law will Charlotte be able to accept this offer? The main issue involved is that
whether an employee can-do two-part time jobs or two full time jobs or one part time and one
full time job simultaneously or not. All the rules, regulations, employers obligations are required
to be considered by the employee.
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Rule: Under employment laws it is not illegal to work under two organizations at the same time.
In fact, Under Employment law an individual to can work at as many jobs as they want. But
under employment contract made by with the employer there might be a problem. Before
accepting any offer, all the points of breech of contract should be studied by the employee.
Analysis: So according to the case study Charlotte will be able to accept offer made by her
friend Daisy. But under employment contract made by her employer she might get restricted to
accept the offer made by her friend daisy. Charlotte need to study her breech of contract rules.
Confidentiality rules i.e. what type of information she is not supposed to disclose and whether all
the rules and policies of the organization are being followed by her ornot.
Conclusion: Charlotte need to go through her employment contract that she has signed with her
employer and if that contract allows her then she can accept the offer which is made by her
friend Daisy.
Case 3: Closure of the Newcastle branch
Issue: Nicholas Jakcob who was an electrician worked all his life in Newcastle. He has worked
for the last three years for Regents Vision but due to restructuring and closure of the Newcastle
branch he was offered another job in London and he refused to move to London. So, this case
will focus on Can Nicholas claim to have been made redundant.
Analysis: there are two things that are important to be considered under this. First is that Under
employment law Nicholas can be made redundant due to closure of closure of the Newcastle
branch. It is one of the most genuine reason to make an employee redundant. Under employment
laws if business is failing or has been closed down, employer can redundant their employee.
Second is the legal contract which is signed between the employer and Nicholas. According to
this contract employer need to pay compensation to their employees if there is any change or
they need to give them enough time so that they can prepare themselves according to the
situation. So, if Nicholas thinks that his redundancy is not genuine then he is free to ask for free
legal advice and can file a legal case against their employees on the basis of their contract which
is signed between him and his employer.
CONCLUSION
From the above file it can be concluded that business law is related with different rules,
regulations and standards which every business organisation is required to comply with while
conducting of any business activities and operations. With the help of commercial law, it
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regulates contracts, agreements, manufacturing, distribution functions which are being
undertaken by company with the aim of making high profit margins along with customer base as
well. The report has defined that there are different types of business organisation which are
having its own advantages and disadvantages such as sole proprietorship business, partnership
etc. Each business type is required to follow and adheres to rules and regulations as specified by
the business or commercial law in respect of being managed and funded.
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REFERENCES
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Statutory Rights to Petition the Court for Unfair Prejudice and/or Just and Equitable
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Hannigan, B., 2018. Company law. Oxford University Press, USA.
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Corporate Sector. Journal of Political Studies. 22(1). p.87.
Loke, A., 2016. Winding-up of a foreign company on the just and equitable ground. Sing. J.
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Martin, S. L., 2017. How Much Is Substantial Evidence and How Big Is a Significant Attorney
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Charges. Research on aging. 38(5). pp.580-601.
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in Southeast Asia Empirical Evidence from Telecoms & Engineering. AJMI-ASEAN
Journal of Management & Innovation, 3(1). pp.65-81.
Stabile, D. R., 2018. Background of the Employment Act III: An Economic Bill of Rights.
In Macroeconomic Policy and a Living Wage (pp. 105-134). Palgrave Macmillan, Cham.
Stabile, D. R., 2018. The Political Economy of the Employment Act of 1946. In Macroeconomic
Policy and a Living Wage (pp. 135-168). Palgrave Macmillan, Cham.
Vaughan, S., and et.al., 2019. Of Density and Decline: State of the Nation Reflections on the
Teaching of Environmental Law in the UK. Faculty of Laws University College London
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Williams, S. and Scott, P. eds., 2016. Employment relations under coalition government: The UK
experience, 2010-2015. Routledge.
Yang, E. and Li, V., 2017. The Interplay between Arbitration and Winding Up Petitions. Asian
Dispute Review. 19(1). pp.29-33.
Online
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