Business Law: Sources, Role of Government, Company Law, Employment Law, Contract Law, Business Organization Formation, Management and Funding

This article discusses the sources of law in UK, the role of government in law making, potential impact of company law, employment law and contract law on business, how different types of business organization are legally formed, and how business organizations are managed and funded.

BUSINESS LAW

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
P 1 – Different Sources of Law in UK - .....................................................................................4
P 2 Example the Role of Government in law making & how statutory & common Law is
applied in the justice of the courts. .............................................................................................5
P 3 Company Law, Employment Law and Contract Law potential impact on Business ..........7
P 4 Explore how different types of business organisation are legally formed............................8
P 5 Explain how business organization are managed and funded. ............................................9
P 6 Compare and contrast different sources of legal advice and support for dispute resolution
to make appropriate recommendation to legal solutions...........................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
In English Law, the sources of law are discussed with wide scope. There is not only the
legislature but also the common law, human rights or EU law. They all play a crucial role in
determining the origin of this important legislative tool available. Similarly, the government has
many stages through which a law is incorporated in UK (Slorach, J.S. and Ellis, J., 2021). All the
deliberation is done in both the houses and then it is moved forward to the head of the state for
admitting law. The statutory and common law are both very important in UK justice system. The
former is passed by the deliberation of the ministers and later can be formed from case to case. In
English Law, there can be many types of business but these organization can be mainly of sole
trader, partnership, limited liability partnership and limited company.
MAIN BODY
P 1 – Different Sources of Law in UK -
Source of Law is nothing but the origin of law. It is actually from where the framework
of the law of that country is being derived and then formulated. Source of Law maybe in writing
or unwritten or both (Williams, M., 2022). Source of law are the varied factors which determine
and lead to the contribution of the subjected organs of the state law. Unlike any other nation, the
English Law can be categorically distinguished in local or from foreign origin. Source of law can
also be described or be called as principal or subsidiary sources. The English law has varied
sources of law such as Common law( Case Law), Legislation, Human Rights Law and EU Law
1. Common Law - The common law can be defined as the rules and regulations which are
not formulated by the Parliament rather by the Judiciary. English Law system the
judgments, case laws, comments, decisions, etc. are considered the primary source of
law. In English Law the judge made laws are published in law reports. There are many
such reports like the Law Reports of Appeal Cases, Weekly Law Reports, All England
Law Reports, specialist series, English Reports etc. These judgments are then set as
precedents and must be kept in mind by the courts subordinate to these said courts.
2. Legislation – Legislation of any country which is formulated by the makers by the act of
the Parliament. The Act of Parliament is ever evolving and the researchers must conduct
thorough examination so that new laws can always be made and amendments can be
done. The Act of Parliament only determines the that how the set of laws are passed,

which are to be done by a authorised person only. This source of law is the most superior
and cannot be challenged by anyone in any court of law. Legislation has two kinds such
as the primary legislation including acts of parliament or statutes or the delegated
legislation ( where authority is delegated by the ministers). Legislation has a wide variety
like the statutory instruments, the bye laws, orders of the council, etc. In the English Law,
parliament has sovereignty it can anytime delete a law or vice verse.
3. European Laws - The European legislation also acts as the source of law which also
covers the wide area of international agreements as well (Forrester, J.I., 2018). These
treaties or agreements should also be marked as important source of law. Since they are
evenly recorded in the Command Papers, Treaty Series, etc.
4. Human Rights Law – The human rights Law can be the basic rights or rights which must
be provided to a citizen only because they are human being. These also acts as the source
in the UK law. The Human Rights Act, 1998 is nothing but a UK passed law. The
secondary sources of law also includes many textbooks, commentaries, digest, etc by
legal writers and analyst. The opinions of the legal experts are also to be kept in mind
while sourcing the law.
P 2 Example the Role of Government in law making & how statutory & common Law is applied
in the justice of the courts.
P 2.1 Role of Government in Law Making - The government plays a crucial role in making the
law. In English Law, the laws are made by the sheer motivation and hard work of the parliament.
The parliament has two houses in the English Law, I.e the House of Lords or the House of
Common (Thompson, L., 2020). The houses a set of stages which they follow to make law by
debating, examining or by suggestions. Any Law if to be created must be written down after
deliberation and this process is called drafting the a written material is called the bill. The bill is
then passed through varied stages in the parliament before it gets the assent of the head of the
state namely the Queen. The stages of the bill getting assent are as follows -
1. First Reading - This a formal stage where the bill is proposed to be read in the house
where it is proposed.
2. Second reading - This is a debatable stage, where the bill is put on for discussions so that
there can be changes made.

3. Committee Stage – A committee is set up so as to talk about the said changes and also
work through the end. There is no time limit in this round of debate. And the final bill is
then proposed for voting in the house where it is presented.
4. Report Stage – After the final examination the votes are to be done and there must be a
majority of vote in this house so that the bill can be moved forward for final deliberation
in the next house and then to the Queen herself.
5. Third Reading - The bill when proposed in the other house can now also make
amendments and sent the bill back for the other house to agree (York, S., 2022). After this
consideration of agreements the bill is either accepted, rejected or back in place. Hence
this process thus surmises to be known as ping pong process.
6. Royal Assent - After the bill is approved by the monarch it becomes a part of the act of
the parliament.
2 Common Law and Statutory Law Role in the Court of Justice – In the English Law, the
law is governed by both the common law as well as the statutes laws (McMahon, K., 2020). But the
main thing is the mixture of both for the justice to be served.
1. Common Law – There maybe two kinds of case laws in the English Law, in one case the
is no existence of any law and the court decides on its own motion whereas the later case
the judges have to apply judicial minds upon the existing question of law, statutes,
regulations, etc. This process can help because in this the court of justice have a a lot of
previous cases to check from in case of a question which has the same question of law.
And the courts must follow these common law as one is inferior to other. There is also a
binding or persuasive value of these common laws.
2. Statutory Laws – This is a process where a law is derived or determined by the federal
or state governments. This has a wide scope i.e. rules, regulations, ordinances, etc. The
laws which are issued to meet the requirements of all the citizens. The laws are already
existing and the courts can easily go through the existing laws and act accordingly. They
are already mentioned in a piece of paper and can be applied in any matter to which it is
related. The justice can easily be attained. If there is any change with evolving time, the
laws can be changed and accordingly made or amended.

P 3 Company Law, Employment Law and Contract Law potential impact on Business
1. Company Law, 2006 – The Company Law of UK is a very robust legislative tool and
this act has all the governance rules, business laws, etc. This act is very advanced and
provides safeguard to all the members. The UK Companies Act 2006 has a very
transparent guidelines for that of reporting of all the financial transactions which does not
allow others to cheat and corrupt the government. The Companies act, 2006 laws are not
static or coherent in fact they are changed or amended from time to time according to the
need of the individual. These are the done through the term called the statutory
requirements (Osier, M., 2020.). All companies can have the directors remunerations.
Similarly, the companies must be registered under Companies (Miscellaneous Reporting)
Regulation 2018. The annual reporting of each year is also done. The statement director
report must be made in large companies which has employee count of more than 250
employee. The corporate governance must be done according to the Corporate
Governance Code which also necessitates the company to give the Directors Report
statement.
2. Employment Law, 1996 – This was the modification to the older labour laws which was
there in the English Law now covers many situations like the unfair dismissals, wrongful
dismissals, maternity leave, duties of employee and the employer, redundancy, etc. It is
very important to penalise one in case of contractual employment contract. It determines
and recognises the rights and duties of employees and employers and also give them
recognition and de recognition (Omolaja, O., 2018). The part time workers are also
recognised in this act. The Workers rights and the ones which are self employed are also
protected in this code. Employment law obliges both the employers and the employees to
keep an safe working environment. They provide the guidelines which are needed in any
contract which done between the employer and employee.
3. Contract Act, 1999 – The employment of employer and employee in English Law is
protected by the Contract Act, 1999. The contract can be witnessed in most people life,
these set of agreements protected by an authorised person legally enforceable by law are
called contract. Now with this set of contract the relationship of employer and employee
is validated and can be easily interpreted in case of default (Akhtar, Z., 2020). The

contract helps to determine factors like who will be responsible in case of breach of the
contractual relationship of that the employer and the employee.
P 4 Explore how different types of business organisation are legally formed.
Business organisation structure helps to determine the implications of a tax payer, ability
of one to raise finance and the extent of personal liability to be determined (Barnett, K., 2021).
The business structure can help us to determine the tax and legal implications in an organization.
In English Law, there are many types of UK business structure -
1. Sole Trader – In this form of business structure, it is very easy and simple to register such
business. The Sole trader must register in Her Majesty Revenue & Custom and must
declare that the business is run to be run solely. The sole trader has sole responsibility
and liability in all business matters (Rye, J., 2020.). The person is thus entitled to all the
profits earned by the business and all the liabilities are to be handled by that person only
by filing Self Assessment Tax Return.
2. Partnership – In this kind of business structure, there must be two or more than two
individual who must incorporate and form an agreement between them as to share all
the profit and loss occurring in an organisation. In partnership form of business
organisation people tend to part all the risks, costs, benefits, responsibilities and liabilities
happening in an organization. All the partners are individually liable for others partners
defect in an business organization. The partners tend to share the tax paying liability
equally. And similarly, agree upon a share so as to share the profit if earned.
3. Limited Liability Partnership - There is a whooping similarity between the partnership
and limited liability partnership but in the later the liability is determined by the amount
of share they have invested in that particular partnership. This partnership must be
registered with the Her Majesty Revenue & Custom. The LLP thus formed can be of two
individual or a company as well. In the agreement drafted in between the parties, the
share of profit and loss is determined previously only.
4. Limited Company – Such incorporation is mentioned to be as a private manage business
which can be managed by the directors. The profits and loss thus incurred by the
company can be accordingly retained (Bruner, C.M., 2018.). These company can be
limited by share or guarantee as well. They give a wider protection than the other
mentioned forms of partnership.

P 5 Explain how business organization are managed and funded.
In any business generating funds can be very tiring and is important to be done in any and
every stage of the business organization. There are many types of financing available when it
comes to availability of generating funds for an business organization. Such investment can be
both short term as well as long term (Ward, J. and Shortt, H. eds., 2020). This investment can be
of various kinds such as -
1. Business Grants or loans – In various stage of the business organisation, there maybe
cash inflow so as to provide a financial boast in any organization. These grants maybe
accepted from the British Government or the European Union. And distribution of such
grants can be done according to the needs of the business. These grants can be incurred
by local community oriented activities
2. Crowd Funding and Peer to Peer Finance - The small to medium size enterprise mostly
use the crowdfunding or peer to peer finance. In this case the investors are also holder of
the equity in a given business (Gibilaro, L. and Mattarocci, G., 2018). In such funding
both the investor and the company can take advantage as one can generate returns and
other can have easy funds incurred. In such funding they must provide for repayments of
loan that is taken in an organization.
3. Short term Loans – These funding can be generated by strong credit system. Such funds
can then lead to ownership of valuable assets and also to incur huge income. In this era,
there is online payments which can easily generate huge amount of funds on credit
facilities.
4. Venture Capital and Angel Investors – Such funding is very flexible as this involves a
third party who while given funds in the company can in return take equity in the
business organization. Both venture capital and angel investor play the same role but
there is difference in the amount as the former pays or invests a huge amount and the
later invests a small sum of money. Similarly, angel investors invest at different early
stage of a business but in venture capital investors come into picture at growth stage I.e
beyond the scope of start up. Such funding mostly does not yield the same amount of
return they are after. To have a strong angel investors one must have great networking.
The venture capital are professional investors.

5. Investor Focused Crowdfunding – In such funding, the supporters who support the
business start funding the organization. And in this customer world, such funding leads to
supporters becoming equity holder later in the business.
6. Family and friends – There can always be ones family and friend who can help one in
need of money or funds in an business organization. But in cases where one person
provides money it should be kept in mind so as to return the funds to those who
themselves have limited source of income otherwise it can end or sour the relationship of
people.
P 6 Compare and contrast different sources of legal advice and support for dispute resolution to
make appropriate recommendation to legal solutions.
Recommendation of legal dispute - In English Law, court are essential so that there is no chaos
and a smooth functioning is conducted. There are many various methods of alternate dispute
resolution such as (I) Mediation (ii) Conciliation (iii) Negotiation (iv) Arbitration. Negotiation –
In negotiation different techniques are used by a person called negotiator while solving the
dispute between the two parties. Such negotiator are impartial third party who uses various
methods like communication as to come to a settlement. The confidentiality in this process is
solely based on trust. Conciliation – In this process the parties meet the conciliator individually
as well as together . The conciliator acts as an agent and reduces the conflict between the parties,
improve the channel of communication and also adopt such other methods to end the conflict
occurring in the parties. Such order or judgment is not binding on both the consenting parties.
The confidentiality of such agreement is as prescribed by law.
Case 1 : Gorden should approach for mediation in this form of dispute resolution, parties have
full control on this process as the mediator so appointed only acts as a facilitator and in no way
can pass an order. Though it is not legally binding. It is a voluntary process hence in no way the
party is obliged to follow the settlement so occurred (Thomas, R. and Wright, M., 2020).
Mediation is required when -
 Parties tend to maintain strong relations even after the dispute.
 Parties need absolute control.
Gorden is eligible to get his wages due to the contractual relationship between the parties as
governed under Contract Act, 1990 since all the essential of the contract are fulfilled and Gordon

can go for remedy under contract law and in employment law it is the duty of the employer to
provide salary to his employee. Section 7, 8 of the Employment act, 1996 provides for the duties
of the employer. Section 13 also provides provision for the unauthorised deduction in the salary
or wages, as expected in the case of Mr. Gordon.
Case 2 –: Jane being the customer should not pay for the extra amount charged by the Virgin
Media. Since the essential of a contract states that there should be offer and acceptance of both
the parties. Virgin Media offered for both the lines I.e internet and phone but if Jane was not
given the amenities and still being charged the consideration is not justified. Jane accepted the
whole package and if on no fault if Jane, there is lack in service from the service provider Virgin
Media. It is the duty of the service provider so as to charge only the amenities which were
provided to them. The essential of the contract can be summarised as offer, acceptance ,
consideration and intention of the parties in case of forming a contractual relationship.
Case 3 : BlackHorse Limited should plan to pay all the bad debts to its creditors so as to stop the
company from getting from winding up. Similarly, creditor voluntary liquidation can be done
when it is pressuring. The BlackHorse Limited can enter into administration for proper breathing
of the business and rescue the company from becoming insolvent. They can also enter a
company voluntary agreement to maintain the operational control of the company. To repay the
money owned a time is to negotiated from the parties i.e. the creditor. (Curtin, Johannsdottir and
et,al, 2018)
CONCLUSION
It is very important to understand the sources of law as understood above the sources of
law in English Law can be of varied types. It not only incorporates the house but also common
law. The decision making process of law is also very detailed. The process passes from both the
houses and goes to the queen which shows the important factor as to how much deliberation is
done before incorporating a law in English Law. There can be amendments also if one is not
satisfied with the present bill. The common and statutory law both result in the smooth
functioning of the system as the former can literally give opinion on not discussed matter
whereas later can be discussed as already mentioned in the statutes. The legality of the company
and how it is managed and funded is also important so to give the person a sense of what should
be the tax and legal formalities in any business structure.

REFERENCES
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