Business Law : Sources of Law Assignment

Report

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Explanation of different Sources of Law..........................................................................1
P2 Explanation of role of government in law making and application of statutory law in courts
................................................................................................................................................2
TASK 2............................................................................................................................................4
P3 Specific examples to illustrate various laws and their potential impact upon business....4
TASK 3............................................................................................................................................5
P4 Exploration of different business organisations legal formation......................................5
P5 Explanation of management and funding of business organisations................................6
TASK 4............................................................................................................................................7
P6 Recommendation of legal solutions for resolving range...................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business law is said to be the laws that govern various dealings between individuals and
commercial matters. They are present to prevent and resolve problems that may affect or hurt a
business which can cause legal disputes (Davidson, Forsythe and Knowles, 2015). It has
different components, which include criminal, civil and legal law. Pegasus is a small partnership
company owned by Jay and Alex. It was founded in 2014 and deals with the deliveries of
packages to customers in Ashford, Kent. This report will explain the nature of UK's legal system
and different sources of law as well as role of government in law making and how statutory and
common law is applied in the country's court. With the help of an example, it will illustrate
potential impact of employment and contract law upon business. Exploration of different types of
business organisation's legal formation will be done and explanation of how they managed and
funded will be covered. Finally, recommendation of legal solutions will be given for resolution
of ranges.
TASK 1
P1 Explanation of different Sources of Law
UK’s sources of laws are:
Legislation (House of Commons, The House of Lords and The Monarch): These houses have
made up statute laws, which have been enacted by parliament, who develop legislations and
policies that supersedes common law.
Common Law: These are laws created by judges during court cases, which are generally binding.
They are flexible and can be overruled by other laws (Hammer, Hendy and Kelly, 2014). Lower
courts have to follow judgements that are decided by higher courts, according to precedent
doctrine.
European Union Law: As one of the sources of law, this system operates among state members
of European Union, which consists of political institutes, social and economic policies (Besley,
2015). They have to consider laws of importance and has more power as compared to national
laws, when conflicts arise.
The European Convention on Human Rights: This source ensures that Human rights of
identified individuals are protected under ECHR.
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The English System law in which England and Wales have been given this system is not
officially codified. It has been divided into criminal and civil law.
Criminal Law
A body of law related to crime, which is established by statute and punishment is given to
persons who indulge in violation of the laws of country. This includes acts that can threaten and
harm public's safety and welfare (Nelken, 2017). There are prosecutors, juries, burden of proof
and reasonable doubt present and resolutions of the case are done in court, with a judge to decide
a verdict of that particular individual of being guilty or not. Examples are robberies, murder and
theft.
Civil Law
Civil law comes in when private issues between 2 or more people arise and disputes have
to be resolved. In this, there are claimants, standard of proof and probabilities balance
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Illustration 1: Judicial Structure of England
(Source: United Kingdom Law Research Guide. 2018)

(McMorrow, 2015). Compensations are given to those parties that have faced trouble and no one
goes to prison. Examples are personal injuries, contract breaches and family disputes.
The problems associated with UK's law system are as follows:
 There is lack of financial support for legal cases in UK (Law, 2015). Very few people are
eligible for legal aid which causes them to not fight for their case due to inadequate
funds.
 UK's legal system is unable to adapt to new technology and effective utilise innovations
which makes them lag behind.
 Politicians and rich people are easily able to save themselves from court cases through
corruption.
 Lack of competent staff, causes inability to fight cases effectively. Non-profit legal
services have decreased over the years.
P2 Explanation of role of government in law making and application of statutory law in courts
Government plays an important role in law making. Legislatives draft bills or laws and
there are steps through which approval is given. There is a first reading in which bills arrive, their names are announced and given to
members of parliament.
 Second reading consists of main debates about purpose, principles and key areas of the
bill that has to be made (Singer, 2018). A voting is done in the end by parliament
members and is passed ahead. A committee stage comes next in which scrutinization of the bill is done and amendments
are made, if required.
 Report stage occurs next, in which more examination of the bill is done and reported.
Members review amendments made and further suggestions and voting is done.
 Then third reading is done, where members of parliament debate and vote for finalisation
of the bill.
 Consideration of amendments is done by each chamber and is given approval (Percival
and et.al., 2017). It is then sent for final agreement at the Houses and the Queen
approves it, therefore, making it a law or act of parliament. This is also known as Royal
Accent.
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Common and statutory law is applied in courts when there are cases that have to be
addressed. There are general principles that have to be followed during its utilisation, and there is
a degree of flexibility given to Supreme Court when cases are handled and they feel that an
exception can be made (Jones and Sufrin, 2016). Once a higher court follows these acts of
parliament, lower courts have to oblige to the same. Statute can make modifications, if they feel
that the law requires some changes.
Pegasus' business can be affected by acts of parliaments in many ways. Business laws
keep getting modifications by legislation, which can cause changes in operations. The taxation
policies will cause Pegasus to create new plans for their budgets and costs (Hammer, Hendy and
Kelly, 2014). Business laws can cause change in employer- employee relations due to labour,
contract and employment laws. They have to make alterations in reports of finances according to
reporting laws that have set of standards and various regulatory laws regarding the environment
will influence the business operations.
TASK 2
P3 Specific examples to illustrate various laws and their potential impact upon business
Contract Law is a major part of UK's legal system. It deals with facts that are made into
an agreement between 2 or more parties. Contracts are obligations which are voluntary and if
breached, high value of compensation is provided to the injured party. These include exchange of
property, performance of services and sales (Rose and Leibowitz, 2017). Employment act
impacts the business of Pegasus as they have to create right working hours and manage their
work load accordingly, provide proper wages so that employees are retained. If they do pay
workers based on their efforts, they will leave, which can cause a negative impact in company.
Pegasus has to ensure that there is prevention of discrimination among employees, so that a
healthy atmosphere is created, which will impact company in a positive manner. This act can
affect the discipline and grievances at Pegasus which will impact their decisions towards their
obligations to employees. They have to offer health insurance, in case something happens to a
worker during working hours and provide them with privacy. Pegasus has to create contracts will
their employees so that they can exercise control over them and workers will be informed about
their obligations and responsibilities as an employee. Their contract includes:
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 Permission of hiring Pegasus vans and entitlement to delivery charge percentage to
driver.
 Substitution of driver within Pegasus employees only with permission.
 Drivers have to wear Pegasus uniform and drive branded vans on which tracking devices
are attached. They will have to carry an identity card while at work.
 Pegasus will exercise full control over drivers regarding their area and schedule of
deliveries that are to be made.
Employment and Labour Law is the regulation of relationships between employers,
employees and trade unions. UK has a good employment act and it benefits many people that
work and enjoy their rights along with the common law and equity act (Davidson, Forsythe and
Knowles, 2015). Pegasus has to ensure that they provide their employees with these rights as
mentioned in above laws. Individuals have to identify their employment status, so that they are
able to avail their rights and Pegasus will be able to claim unfair dismissal. It will help in
preventing lawsuits which may damage their reputation.
For example, Pegasus' contract includes agreement for provision of work to persons
along with remuneration, exercising control over them and service contract. There has to be
mutual obligations and if both parties agree, then that person will be considered an employee. In
case an individual works as a casual basic at Pegasus, employers are not obligated to provide
them work (McMorrow, 2015). The employees of Pegasus are self-employed, which makes them
independent contractors. Work is provided on contractual basis and if there is a breach of
contract, court can only be in favour when workers are working under company.
TASK 3
P4 Exploration of different business organisations legal formation
Pegasus has already been operating since 2014, they have to prepare documents and
register according to Ashford, Kent registration rules and regulations. They have decided to
establish themselves as a registered company as they have become a major customer of Amazon,
which can arise many legal threats for them. In order to prevent complexities in disputes and
court cases, Pegasus should be established as a legal company.
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Pegasus is a partnership business company, in which 2 people are present. They have to
agree upon sharing profits of their business. There is a mutual agency between Alex and Jay, as
they both operate the business and are accountable towards liabilities. A Partnership deed has to
be signed, where an agreement is done between the partners (Jones and Sufrin, 2016). Legal
formation is done with the following steps: Articles of Association: Pegasus has to send articles of association, along with
registration fees to Registrar of companies. It includes documentations in which rules for
business operations are mentioned (Polinsky, 2018). Pegasus' share capital amount and
composition, organisations, authorities, duties and of Alex and Jay has to be present. Memorandum of association: Pegasus has to send a memorandum of association to
registrar office , which includes names and signatures of partners and profit- loss sharing
ratio. Partnership deed: This will include names and addresses of company as well as its type
of business and partners present. Contribution of Jay and Alex's capital amount and
accounting period of Pegasus (Nelken, 2017). Date of commencement and their profit-
loss sharing ratio will also be mentioned. Obtaining local license: Pegasus needs a local license in order to carry on business
activities (McMorrow, 2015). They have to submit relevant documents to registration
office, so that they are provided with the license. Determination of tax obligations: Jay and Alex have to determine their tax obligations
and because Pegasus is a small business, they need to register themselves at local and
state levels. A state employer identification number is needed as well.
 Opening a business bank account: Pegasus requires a separate bank account from the
partners for business transactions and operations (Jones and Sufrin, 2016). A copy of
partnership agreement has to be submitted along with Tax ID number.
Legal formation of company is a long and complex process. At times, registrations can
get rejected if the officials are not satisfied with provided information. It is beneficial to register
Pegasus, as it can help company in fighting cases and disputes, if they arise.
With the establishment of Pegasus done, Jay and Alex will be directors of company.
Their roles and responsibilities will include making strategic decisions that will influence
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business operations so that targets of delivering packages are done effectively and efficiently
(Davidson, Forsythe and Knowles, 2015). They have to hold meetings with respective managers
and listen to their ideas and opinions so that Pegasus can grow and expand.
P5 Explanation of management and funding of business organisations
Business organisations can only operate when they have funds available. Pegasus can
arrange for funds in the following ways:
Savings of partner
This is a primary source through which partnerships can be funded. Each partner may
have personal savings through which they can invest in the company. It is up to them to decide
how much they would like to contribute and create a ratio accordingly. Pegasus already has
funding of capital by Jay and Alex.
Loans
Partnerships can go to banks or financial institutes for loans to fund their business (Rose
and Leibowitz, 2017). The partners will have to repay according to ratios of responsibilities
which has been decided by them. If required, Pegasus can apply for a loan from their respective
bank.
Business line of credit
This funding source is similar to a loan, but business line of credit allows partnerships to
take money whenever required. Partners will have to repay accordingly to their responsibility
ratio. Pegasus can apply for line of credit if they require more funds.
Additional partners
Partnerships can include more partners in their business, which will lead to funding of
their business. This will help to increase capital, without help of any loan and liabilities that will
have to be repaid in the future (Cameron III, 2015). Pegasus can invite partners to join their
company if they feel that their funds will be insufficient.
Just like every business organisation, management of partnership firms is important. Jay
and Alex are partners at Pegasus, they both have equal rights in managing their business. They
make decisions mutually regarding profits and losses of business, coordinate control of activities
and have the authority to delegate work to employees. They both come together to plan strategies
for achievement of goals in the company. After they create those strategic plans, organising it is
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done effectively and they are able to monitor work performance of employees. Management
leads and controls functions in such a way that everything is done efficiently (Hammer, Hendy
and Kelly, 2014). They create marketing strategies to ensure that customers choose them for their
loyal service. This ensures that operations, accounting, financing and marketing is done properly
so that big companies reach out to them for delivering their packages to customers in the city. It
will lead to their growth and expansion as well.
TASK 4
P6 Recommendation of legal solutions for resolving range
Pegasus may face disputes at any time during their business operations. It is important for
them to analyse legal solutions, so that they are able to resolve range. Alternative dispute
solutions (ADR) is a method for resolving disputes between companies and customers in which,
no one is required to go to the court. They have various schemes through which company can
contact such providers for voluntary membership. It is done outside the courtroom. UK's
government encourages this technique as it is accessible with provision of various schemes. It
includes arbitration, in which parties submit a dispute to an arbitrator, who is responsible for
binding a decision and is generally consensual. Mediation is a process that is non binding, in
which parties work with a 3rd person called mediator, that helps them in settling the dispute in a
fair, quick and cost friendly manner (Percival and et.al., 2017).
Pegasus is well aware that legal advice for commercial issues costs an average of £350
per month. This is expensive, time consuming and confusing. Alternative ways of obtaining legal
advice can be group legal services plans, in which plans are provided for individuals to choose
from, so that they can get legal advice within their budgets. There are various online services
available for people that are unable to afford lawyers. Some provide free legal advice while
others charge from £7 per month. Non-profit organisations have been set up for those with
average incomes (Alternative dispute resolution for consumers, 2015.). There are several
paralegals, lawyers, investigators and social workers that can help resolve disputes. Legal clinics
are institutes set up by law schools for training students that learning to become lawyers. They
provide cheap or even free of cost services to persons who are unable to afford legal services.
These alternative solutions can help Pegasus overcome and resolve disputes that may
arise in the future. It will help them maintain their reputation, save costs, time and energy.
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CONCLUSION
This report can conclude that UK's sources of law system include legislation, common
Law, European Union law, the European Convention on Human Rights and is divided into
criminal law and civil law. The Queen is the person that give the final approval of the act or law
that has been made and government plays an important part in drafting bills. Pegasus' business is
influenced by employment and contract law. They have to make contracts which address
employment and labour laws so that they can handle disputes with their employees in a legal
manner. Personal investments, loans and addition of partners can help Pegasus fund their
business and manage it by effectively running business operations and delivering packages
efficiently. Alternative dispute resolution can help company is handling legal disputes and
preventing them through arbitration, mediation and alternative options such as legal clinics and
online services.
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REFERENCES
Books and Journals
Besley, T., 2015. Law, regulation, and the business climate: The nature and influence of the
World Bank Doing Business project. Journal of Economic Perspectives. 29(3). pp.99-
120.
Cameron III, G.D., 2015. International Business Law: Cases and Materials. Van Rye
Publishing, LLC.
Davidson, D. V., Forsythe, L. M. and Knowles, B. E., 2015. Business law: Principles and cases
in the legal environment. Wolters Kluwer Law & Business.
Hammer, R., Hendy, J. and Kelly, D., 2014. Partnership Law. In Business Law (pp. 389-418).
Routledge.
Jones, A. and Sufrin, B., 2016. EU competition law: text, cases, and materials. oxford university
Press.
Law, J., 2015. A dictionary of law. OUP Oxford.
McMorrow, J.A., 2015. UK Alternative Business Structures for Legal Practice: Emerging
Models and Lessons for the US. Geo. J. Int'l L.. 47. p.665.
Nelken, D., 2017. Comparing legal cultures. Routledge.
Percival, R.V and et.al., 2017. Environmental regulation: Law, science, and policy. Wolters
Kluwer Law & Business.
Polinsky, A.M., 2018. An introduction to law and economics. Wolters Kluwer Law & Business.
Rose, A. and Leibowitz, D., 2017. Getting Out of a Contract-A Practical Guide for Business.
Routledge.
Singer, L., 2018. Settling disputes: Conflict resolution in business, families, and the legal
system. Routledge.
Online
Alternative dispute resolution for consumers. 2015. [Online]. Available through:
<https://www.gov.uk/government/publications/alternative-dispute-resolution-for-
consumers/alternative-dispute-resolution-for-consumers>
United Kingdom Law Research Guide. 2018. [Online]. Available through:
<https://tarlton.law.utexas.edu/english-law/home>
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