Table of Contents INTRODUCTION...........................................................................................................................1 SECTION 1......................................................................................................................................1 TASK 1............................................................................................................................................1 1(a). Meaning of the statement provided along with various sources of UK laws.....................1 2(b). Role of government in UK law making process and applicability of statutory and common law in justice courts......................................................................................................3 3(c). Illustration of impact of company, employment and contract law upon business and differentiation between legislation, regulations and standards...................................................5 TASK 2...........................................................................................................................................6 SECTION 2......................................................................................................................................8 CASE 1............................................................................................................................................8 CASE 2............................................................................................................................................9 CONCLUSION..............................................................................................................................11 REFERENCES..............................................................................................................................12
INTRODUCTION Business law is the body of laws and rules that governs transactions, dealings and agreement made in the ordinary course of business. It falls into two distinctive areas viz. Regulation of commercial entities by laws of company, partnership, agency and bankruptcy and regulationofcommercialtransactionsbycontractlaw.Regulationofbusinessaffairsis important to protect the entity and avoid legal consequences which may cause huge financial loss. The report covers nature of legal systems and legislations impacting businesses, types of various business organizations and legal solution for problems and conflicts arsing within and outside entities along with recommendation(Alvarez, ed., 2016). SECTION 1 TASK 1 1(a). Meaning of the statement provided along with various sources of UK laws. Everyyear,UKgovernmentidentifiesvariousareaswherelegislationscanbe implemented. Every law has to be presented in the form of bill before the parliament for receiving royal assent. A list of laws that the government wish to get approved by Parliament is laid down. The laws that have received royal assent and can be implemented is announced in presence of MPs, and various other dignitaries in House of Lords. The Queen's speech marks beginning of parliamentary year further, the speech disseminate various changes, priorities and plans in coming years. It is written by ministers which may be lengthy and differ every year and it may contain drafts legislation, foreign trade policies along with its objectivesand bills.The statement “Parliament is sovereign” means that it has the supreme authority to create laws and statutes. The power to enact law andmake amendments or repeal an existing law is with the parliament(Bamberger, Meshoulam and Biron, 2014) .No courts have domination or jurisdiction to make a law void or null, hence, can not be challengedinanycourt.However,thereshouldbedistinctionbetweenpowersvarious government bodies. Further, Westminster Parliament is not bound by European or third party. In every situation, parliament sovereignty shall prevail. There are various sources of UK law which provide legal information in detail. These are as follows:
Primary sources:Such sources contain data and information that are restored in a fresh form which have not been recorded, interpreted, or used before. Case law:Courts pass judgements and decisions which are used for concluding future case laws. It is presented in a report form and are prime sources of UK law. Further, these containreliableandauthenticfactsandissuesalongwithjudicialprinciplesand decisions. English system has doctrine of judicial precedents, under which judgement passed by courts are used to conclude future cases(Barbero, and et al., 2014)A judge should compulsorily use decisions passed by higher courts. Decisions given by lower courts should be ignored. These can be regarding appeal cases, criminal, civil, common, statutory etc. Legislation:UK has a partially written constitution which has not been fully coded. Laws have been enacted by Parliament for written portion of it. The scope of these legislations extends to whole UK. Citizens are required to act in a certain way and their rights have been provided in constitution. Further, supremacy of parliament is applicable, which means that only parliament has authority to enact or rescind a law. Further, laws are above all other sources and its validity or applicability can not be questioned. It is dividedintoprimaryanddelegatedlegislationandincludesaddition,deletionor amendments to make it more useful. European directives:The European Union provides various laws and rules in the form of directives and which are applied to its member countries. Free trade and exemption from export and import duties are some its major features. However, UK has decided to move out which will cease its right to participate in EU decision making. Hence, this source should be used till the time UK is a member country(Bhatnagar, 2016) Secondary sources:These include document, files or data which have been extracted and further interpreted from primary sources. Usually, these are a work of authors or researcher. Legal encyclopaedias:These are meant to provide complete information about laws in a simpler form. Halsbury's laws of England and Wales is an unique, authentic and widely accepted encyclopaedia of law which contain legal definition, sections and their easy interpretation in a narrative way. Further, it is updated in timely manner as and when amendments take place. One may access it online or get a hard copy.
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Parliamentary publications:Hansard is the official report that is prepared on the basis of proceedings or debates of both the houses; House of commons and House of lords. These are published on a daily basis on the official website(Bogan, Fertig, and Just, 2014).Further, command papers are also an element which are basically consultation papers made for government proposals and policies. Non-parliamentarypublications:Theseareproducedbyvariousgovernment departments and agencies. These may include research reports, technical information, statistics etc. Most of them are available electronically. Further, old information can also be accessed. Law commission:A law commission has been constituted by UK government in the year 1965 to assess and monitor various laws. They carry out consultation for knowing various reforms and alterations. Further, public at large and other interested parties are involved in discussion in order to get their views and opinions. These are then compiled in a report form and finally, submitted to Lord Chancellor. The aim is to remove all the loopholes and make all laws, fair, simple and cost-effective(Christensen, Bartman and Van Bever, 2016). Law journals:There are many legal journals available which are good source of information. These may contain academic arguments and other interpretations which provides legal issues in detail. These are used by practitioners with a view to update knowledge level of various legislations. Textbooks:These are the best places to get information for research work on a legal topic. These may be written by authors in a simple and intelligible way so as to use to understand complex issues. 2(b). Role of government in UK law making process and applicability of statutory and common law in justice courts Government has a major contribution in providing laws and maintaining effective legal system in UK. It has different powers which have been divided into three categories. These are as follows: Executive role:Queen and government are considered executive parties. Prime minister and Cabinet of Ministers are also included for the portion attributed to Civil services. Thispowerisexercisedtomakeandimplementgovernmentpolicies.Further,
government has the responsibility and accountability to Parliament as it has supreme authority to change a government. Further, the government is elected from the members of Parliament. Government is responsible to check the scope and proper functioning of acts implemented(Collis, Holt, and Hussey, 2017). Legislative role:UK Parliament has the legislative power. It consists Monarch, House of Lords and House of Commons which participates when a bill is presented before them. The powers of Monarch is very limited and workson the command of Prime Minister which is provided in consultations with MPs. Both the houses vote for the bills. However, there is a specific procedure for a bill which is as follows: First reading Second reading Committee stage Report stage Third reading Royal assent After receiving royal assent, it becomes an Act which should be abide by all UK citizens. Further, House of commons is above House of lords in law making process. Parliament create or amend laws, examine government's policies and effectiveness of legislation and direct it to make financial decisions that will extend to whole UK. Further, Parliament has the power to assign government to make subordinate laws. Judicial role:UK has courts and tribunals through which cases are decided and passed. Government establishes courts where judges hold hearings of petitions filed. Tribunals are for administrating appeal cases(Dodd, and Hanna, 2018) . The judicial appointments are made by Crown. Hence, the decree passed by judges are above all as they have been placed by the Queen. Further, judges have independent authority and Crown may remove a judge after approval received from Both houses of parliament. Common law:It is also known as judge made law because it is based on judicial decisions passed by judges. The basis of such laws is judicial precedents. The main motto is to have a specific principle that can be applied for deciding similar case laws. The judicial decisions passed in past are referred to reach to a conclusion. Hence, it can
be said that, judgement passed in previous cases are used in deciding the matter in future. Amendments can be made through statutory laws. Statutory law:It is a system of law in written form made by various legislative body to protect and regulate citizens of UK. A bill passed by receiving royal assent become statutory law. Further, it is treated as core structure on which whole legal system rest and laws are made. All the statues and rules must be complied with by all people living in UK. Furthermore, amendments in statutory law is not easy, as it requires a separate law to make modifications(Dubljević, Sattler, and Racine, 2014). 3(c). Illustration of impact of company, employment and contract law upon business and differentiation between legislation, regulations and standards Companies law:Companies Act, 2006, provides provisions that are applicable to a corporation. It contains laws for formation of business, preparation and maintaining various documentsandregisters,appointmentofminimumnumberofdirectors,subscriptionby shareholders, conducting meetings, winding up procedure and many more. A company can take birth only when it complies with the above-mentioned act. Further, it must file application to get registration in order to commence its commercial activities. For instance, if company does not prepare memorandum of association, then it can not be incorporated. Similarly, ifcompany enters into a contract beyond its powers then it will be wound up if such contract can not be rectified. Employment law:Every business hire employees to do work for it in order to achieve organizational goals and objectives. Therefore, it is important for employer to protect its workforce and provide them healthy and safety environment. Employment Act, 2002 should be abide by, which provides rules on working compensation, hours, leaves including maternity and paternity, benefits, dismissal etc. Human resources are important, thus, they are in a great position to impact the business significantly(Forsgren, and Johanson, 2014). For example, If a employee is dismissed without giving valid and sufficient justification, then he may apply in employment tribunal for justice. Contract law:An agreement formed with a legal intention and valuable consideration between two parties which is enforceable by law is called contract. Organization enters into contract with different parties for carrying its activities in a smooth and legal way. In UK, it is governed by Sale and Supply of Goods Act, 1994, which provides protection to vendor and
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purchaser. Further, specific legal action can be sought in case of a breach in terms and conditions of contract or a party has failed to fulfil its requirement(Fu, 2014).For instance, seller has failed to pay the payment within specified time. Then in such case its will account as breach of contract and buyer can approach for legal actions. Differentiation between legislation, regulations and standards LegislationRegulationsStandards Thesearemadebyvarious legislativebodytogovern citizensofUK.State governmentmayalsoform legislation for the state which may vary. It is compulsory for everyone to follow them. The aimoflawsaretoprotect peopleandpunishtheones doing wrong. Thesearethedetailed instructionsonthe implementationand enforceability of laws. These are mandatory to abide by for effectiveadministrationof businessactivities.These make it easy to carry business by following rules. Theseareformedfora particular system and used as guideline. Usually prepared in the form of document which entails criteria which should be considered in the business. It is complied to meet requirements andexpectationstoensure quality and efficiency. TASK 2 In the given case, Jenny, Penny and Marie have formed a JPM, a partnership firm. They are looking for sources for funding as they are considering an expansion. However, they have been advised by their accountants to convert the current structure into a limited company. There are many different business types which can be considered on the basis of their advantages, disadvantages, management and funding. These have been discussed below: Sole proprietorship:It is a types of business that owned and managed by one person. It has no legal identity, hence, there is no separation between owner and entity. Owner has has all the control of business activities. Further, profits and losses are not shared with other people(Green, 2018). However, he may employ person for helping him out in day to day work. Generally, it operates at small scale and the liability of sole trader is unlimited. The business is easy to incorporate as well as dissolve. Further, it does not have huge formalities or paperwork. Along with this, the profits of sole trader is taxed for
once. However, sole proprietor have unlimited liabilities if debts remain unpaid. Further, the rate of employment taxes are applicable on business income. Along with this, wider fund raising options are not available. Partnership:It is an association of two or more persons to from a firm through a partnership deed. The business is lawful and profit sharing ratio is as mentioned in the agreement(Guo, and Werner, 2016). Further, partners are jointly and severally liable for debts of firm. If there is no ratio mentioned in deed then profits and loss are divided equally. It has greater advantages as compared to sole proprietorship. Even two people with mutual interest can form it, along with this, the set up cost is not huge. Also, it is very easy to change its structure to a a new one and registration is optional. On the contrary, partners have unlimited liabilities and each partner may be held jointly and severally liable for the acts of other partners. Furthermore, there is great risks of disagreements and conflicts. Company:It is an artificial legal person having separate legal identity along with perpetual succession and common seal. It is a legal person in the eyes of laws who has the right to sue or be sued. Further, it has right to buy properties in its own name. A companyisformedwhenit'snamehasbeenregisteredwithCompaniesHouse. Companies Act, 2006 should be complied with. It can be limited by shares, guarantee or even unlimited. It is the most preferred types of business as it is a legal person having registration. Further, wider options are available to raise funds. However, it can face legal consequences and expensive to establish(Harley, Faems, and Corbett, 2014).Limited Liability Partnership (LLP):It a combination of partnership and company. The liability of partners is limited and they are not held liable for jointly and severally for the acts of other members. Management and funding of different types of business organisations. SoleProprietor:Capitalobtainingisoneofthemajortaskforeverybusiness organisation. There are very limited sources of funds for a sole proprietor owner. First and the prime source of fund can be owner's own money. Other options are quite difficult for a sole proprietor for raising funds. Management of funds, business decisions and other activities mainly done by the sole trader himself as he is the boss of the company. Employees are appointed by proprietor to provide assistance in routine work.
Partnership:In partnership business members usually carry unlimited liabilities, if business goes down, it is the owners responsibility to compensate for all the unpaid debts. Partnership owner have various sources of funds which include personal savings, bank loans. Partners have equal rights to manage a partnership business. Sometimes only one partner works, and the other partner have limited liability and partnership in all the business activity(Kim, and Lui, 2015). Company:There are various sources of funds for a company which includes retained earnings, debt capital, debentures, bank loans, equity shares, working capital and many more. Investors are interested because of its being a registered entity. All these sources of funds can be used in various situations. Detail analysis of every sources of fund is necessary before selecting right source of funds. Management of funds and other related activities are managed by top management team or by director of the company. Board of directors manage the affairs, formulate policies, procedures etc. Limited Liability Partnership:Sources of funds for LLP business includes short term or internal sources, banks, venture capital. There are many partners in LLP firm but they are not liable for other persons misconduct. Apart from this, capital of a partner is a first preferred and basic source. Every partner is responsible for their own act. Shareholders of LLP can take part in day to day operations. All the partners are responsible for compliances with laws and regulations(Liao, Q. J and et al., 2018) SECTION 2 CASE 1 In the given case, Champion Ltd. Was compensated to change the location of its company for surrendering place for the development of a new stadium by premier league club. However, they company faced financial problems because of losing majority of its loyal customers. Further, it failed to pay loan to banks as well as creditors within specified time to which creditors wish to approach for winding up petition. Winding up petitionis a legal way filed by creditors for dissolution of a company. These are presented to make insolvent company to pay the unpaid amount of creditors by selling its assets and contribution by members. A creditor who is owed more than£750 has the right to file this petition in courts. Hearings will be conducted to establish status of company's insolvency
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and an official liquidator will be appointed for realisation of assets(Macfarlane, Zhang, and Pun, 2014). Creditors are important for every company as they are good source of funds. A contract is executed with creditors which contains amount along with date within which it has to be paid. Further, their actions affect in a significant way as they have power to wind up the company. To settle down the matter with creditors, negotiation can be used. This is the simple and easy to use method. Champion Ltd. Can use this method whereby, its creditors and top management will meet in order to make them understand about what went wrong and why it is not being able to repay the amount. Mutual terms and conditions will be formed upon which ultimate decision will be made to resolve it. CASE 2 In the given case, Mr. Anderson was holding the position of CFO in Amber Ltd., and had the access to highly confidential information. He was offered a job position of CFO by Beta Ltd., a competitor. Following which, he gave resignation notice to Amber in a short period. However, his employment contract with the current company stated to provide a 12 months' notice by either side in order to terminate the contract(Niskanen, 2017). Mr. Anderson showed his interest in taking up the prospective job after a period of transitional arrangements with Amber, which was supposed to expired on 31th May, 2016. Amber Ltd. Raised its objections to the proposal due to not serving a 12 months' notice. After further exchanges, Mr Anderson ceased working for Amber at the end of May 2016. Amber Ltd. Is desirous for an injunction to prevent him from joining Beta Ltd. Or any other rival and from contravention of duties of good faith, fidelity, trust and confidence for a period of 12 months. Injunctionis an order of court to compel defendant (person, corporation or government entity) to refrain from proceeding further with something, depending on what plaintiff is requesting. This provide relief or legal remedy to applicant along with this, compensation can be sought by petitioner for injury. Arbitration is the method that can be used by Amber Ltd. To take actions in order to resolve the matter. Amber Ltd. And Anderson should appoint a person as arbitrator in front of him, the case scenario will be presented. He will listen both of them together with employment contract to see terms and conditions to check the validity and authenticity. It will provide a
speedy and cost-effective method without going to court. Injunction must be used when, arbitration failed to provide a conclusion. It involves going to court which is again a wastage of money and time. Hence, should be avoided at first instance(Purce, 2014). There are many other legal solutions other the two mentioned above. Each of them have their specific characteristics, advantages and disadvantages which should be considered before choosing one. Some of the commonly used legal solutions are as follows: Negotiation:In this method, a direct communication is held between parties to disputes with an intention to come to a mutual conclusion for resolving disputes. These may be used to solve existing problems or may be used to prevent future disputes. It is voluntary in nature, the parties may appoint a third person to help them communicating with each other. Further, it is an informal way and very flexible method. Mediation:This method is used when negotiation is failed. A third party, mediator is appointed to facilitates resolution of disputes by managing and supervising the exchange of information and bargaining process. Further, mutual criteria are formed to get to a conclusion. Effective solutions are found by mediator which are used to resolve disputes. It is a short term, task specific and easy process. Arbitration:It is a less formal, easy, cost-effective and out of the court settlement. An arbitrator is appointed with the mutual consent of both the parties, who is an independent person. He hears both sides along with this, evidences submitted are also examined for making a decision(Savage, M and et al., 2014). The disputing parties surrenders their power to arbitrator. Multiple arbitrators can also be appointed. The judgement so passed is final and ave binding on both the parties. Conciliation:The disputes are resolved in an amicable manner in order to bring two sides together to reach a decision with a view to avoid taking case in courts. The parties decides mutually on terms to settle the matter out of court. It optional in nature and have greater flexibility along with the matter remain confidential. An interesting element is that non-binding settlement can become part for resolution. CONCLUSION From the above report, it has been concluded that business law are compulsory for organizations to follow for carrying their activities in a legal way. Every country has their own
legal system which provides laws that govern rights of individuals and strict actions will be taken by courts against wrong doers. Further, there are various sources available through which legislations can be understood. Furthermore, employment, company and contract law are there which are applicable on entities. These are important to comply with to avoid any legal consequences which saves huge loss of finance also, brand image gets destroyed. These can not be compensated with any other thing. Along with this, correct business structure should be chosen by taking into account advantages and disadvantages and options of raising capital. Lastly, legal solutions should be applied for resolving disputes and conflicts. An appropriate method must be selected and used from all the solutions available.
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