Business Law: Sources, Role of Government, and Impact on Business

This essay discusses the different sources of law, the role of government in law making, and the potential impact of company, employment, and contract law on businesses. It also evaluates the effectiveness of recent legal reforms and analyzes the differentiation between legislation, regulations, and standards.

BUSINESS LAW

Contents
INTRODUCTION...........................................................................................................................1
TASK 1 (ESSAY)............................................................................................................................2
P1 – Explain different sources of law..........................................................................................2
P2- Explain the role of government in law making and how statutory and common law is
applied in the justice courts. ........................................................................................................3
P3 – With the help of examples, illustrate how company, employment and contract law has put
potential impact on business........................................................................................................4
M1- Evaluate the effectiveness of the legal system in terms of recent reforms and
developments...............................................................................................................................5
M2 – Analyse the potential impact on business through differentiation between legislation,
regulations and standards. ...........................................................................................................5
TASK 2 ( Report).............................................................................................................................6
P4 – Evaluate how different types of business organisation are legally formed. .......................6
P5 – Explain how businesses organisation are managed and funded..........................................7
P6 / M4 – Compare and contrast different sources of legal advice and support for dispute
resolution to make appropriate recommendation to legal solutions............................................8
M3 – Analyses the advantages and disadvantages of the formation of different types of
business organisation...................................................................................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business in the land of the United Kingdom is a dream for every individual or the group
of person. Business gives the different level of success to UK, their whole economy is control by
the business sector. In UK many big companies are operating their businesses like Tesco,
Morrisons etc. they got the opportunity in UK just because of simple and clear rules and
regulations which operate the business organisation. Behind success in anything there would be
some extra efforts, this statement would get considered when the UK parliament shown it at the
time of enacting the Company Act. A lot of time was consumed but at the end in the year of
2006, their efforts shown the result in the aspect of Company act. Under business law various
rights have been protected of the business organisation, liberty should be provided to do business
in the scope of legality, provides the manner to solve the disputes, assist in establishing the
standards etc. The United Kingdom has democratic form of governance it means, election was
conducted there where people of UK choose their representatives and these representatives select
their supreme authorities who take the decisions for the State. The company act is the main legal
model which provides the framework to operate the business operations according to law, it
contains 1300 sections and 16 schedules which explain various rights and duties of business
organisation, companies have to comply with these laws otherwise it impose high penalty on
business companies (Abdul-Malak, and Senan, 2020). However the company act has a big
support to businesses other than company law or business law there are some other acts or laws
also which put an impact on businesses. There is an Employment Act of UK which mainly
covers the rights and duties of the employer's and the employee's towards each other at
workplace. In context to businesses employment act provides the guideline to all the employers
and the employee's to bring discipline at workplace and bound the employer's to behave in well
manner with the employee's. Another act or law which influences the businesses is Contract law,
this act gives the confidence at the time of dealing with another companies. This act plays the
significant role in businesses, without binding the parties it will be difficult to say that
transaction would be completed or not. In this assessment also these acts will be discuss to seen
the impact on businesses.
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TASK 1 (ESSAY)
P1 – Explain different sources of law.
Laws are the set of rules and regulations which govern the behaviour of human beings. It
will be a responsibility of every individual to obey all the laws for every sector. In UK there is a
democratic form of governance it means the authority of law making is in the hand of
government only. In government also not every public authority has a right to enact the laws
there is a separate authority for making laws which is known as legislature. Its the only authority
which has a power of making laws for the state, legislature is the process of making laws which
is performed by the parliament consist of house of Common and House of Lords. The laws are
classified into two parts first one is Primary sources of law and another one is secondary source
of law.
Primary sources of law- Legislature is a process to make laws and this process would only be
followed by the parliament of UK. Other than parliament none of the public as well private
authorities has a right to deal with the laws, whether to amend or alter the laws only parliament
has a right to do it. The main sources of the UK laws are the legislation which got followed by
the parliament consist of two houses i.e. House of Common and House of Lords. These two
houses by following the procedure of converting the bill into law introduces new act for the state.
At the staring of it, bill got introduces at first house which is House of Common, after that with
marking the area of changes in bill it got send to the House of Lords. After making all the
changes in the bill and agreed on some point with two third majority of both the houses bill got
sent for the Royal assent which is given to the Monarch. After receiving assent from the queen
of England the bill got converted into law (Alfouzan, 2020).
Another source of law which would be considered as primary only is the Judicial Precedents
which is also known as case laws. These are not the proper laws which got prepared by the
legislation but, these are the judgement's of the Supreme court or the High Court which acts or
become law for all the subordinate courts. There are some judgement's which would be applied
in the similar matter by the subordinate courts passed by the Superior Court. It is mandatory for
all the subordinate courts to apply the judgement's of Supreme Court when the similar matter
came in the court, at that time there is no need of an argument, counsellor has to proof that the
matter covers the same facts in which the Supreme Court already passed the judgement.
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Secondary sources of laws- In this category those interpretation would considered as laws
which are supply by some retired judges of Supreme Court or the High Court. Judges of superior
court are the legal experts they got aware about laws and carries best level of knowledge about
laws. So the legal experts who publish their books, articles and journals on laws would get use in
the court as law. But, these are not overruled the original laws which are made by legislature.
These acted laws would be use at the time of contradiction of laws.
P2- Explain the role of government in law making and how statutory and common law is
applied in the justice courts.
The law making process is totally in the hand of government, legislation is done by the
parliament only which consist of two houses i.e. House of Common and House of Lords. These
two houses took the responsibilities of dealing with the bills, verify all the provisions, do some
alteration in it and with the majority passed the bill to the Monarch for the Royal assent. Laws
are made for the people and it should be made by the people only so the people of House of
Common got elected by the people only and then they will frame laws for the public. As the part
of government they have to show some care towards law making, its a big responsibility which
has to be done with efficiency (Brown, Liñares-Zegarra, and Wilson, 2018). The law making
process got divided into stages which is performed by both the houses, initially at first stage
name of the bill got suggested in the chamber. At second stage bill got discussed on its weak and
some strong points and sent it to the committee which got established among the members of
both the houses. Committee bring out some changes or alteration in the bill and sent it to another
stage which is known as Report stage . In this stage all the corrections would get done
recommended by the committee. When the bill got discussed and some changes were made it
would get send to the House of common. Later on after discussion was done in House of
Common it would be send to House of Lords. If any modification is required then, House of
Common point out that area and send the bill again in House of Common. Either the house of
common accepted the bill or may be some more changes would be point out by them after it
again bill got introduced in House of Lords. This correction cycle will goes on until by the
majority of two third of both the houses passes the bill. After receives green signal from the
houses bill got present at final stage to the Monarch for the royal assent. When the Monarch
signed on the bill only then, that bill got converted into law.
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P3 – With the help of examples, illustrate how company, employment and contract law has put
potential impact on business.
There are so many factors which put an impact on the businesses some are internal and
some are external. Internal factors are the employee's, assets, machinery which influences the
working of business organisation , some are external like government policies, environment, tax,
customer taste and the laws. Business must needed one particular law which regulates all its
functioning and show the legal path to run the business. In need of such act UK parliament made
its best efforts in enacting the act like Company act. This act become the main legal framework
for all kind of business. It shows various ways to run the business, generate the rights of the legal
companies and show them the process of running the business legally. It also contains some
penalties and charges against the companies which breaks the laws and run their business
illegally. The company act has a great potential impact on every kind of business as its the only
act which govern all the business organisations. Apart from the company act there are some other
acts also which puts some potential impact on businesses such as; Employment Act and Law of
Contract.
Law of Contract- it is essential in the line of business to make connections and do deal with the
other companies. It will give a great exposure to the companies and company will get known in
the business market. But in dealing with the other companies there will be a threat of not
fulfilling the duties of businesses. It is really important to bound the parties towards their
promises in performing the business deal. To make the legal obligation of performing the duties
against each other contract framing is the best option between the companies. After making the
contract parties got bound to perform their duties if not then, the party who got failed in
performing the duty has to pay the compensation for breaching the contract. This would be the
reason that now even at the join of joining by the employee in the company contract would get
sign so that the employee's got bound to give their best in achieving the targets of the company
(Hagiu, 2020).
Employment Act- Prior to the employment act various efforts was made by the UK parliament
to bring out such laws which safeguards the rights of the employee's. The safeguarding rights of
the employee's came into notice when several complaints were came out by the employee's
against their employer's. Business would only get done efficiently when all the employee's were
highly motivated and enthusiast towards the company success. If employee's got exploited, as
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they didn't get the minimum wages, didn't get the paternal or maternal leaves, didn't get the
medical facilities on time and they got removed from the company unfairly like they didn't got
informed about their removal from the company and even no proper procedure got followed
which is essential to follow at the time of removing the employee from the company.
Company Act- This is the main act which govern all the business organisations of the United
Kingdom. It has 1300 sections and 16 schedules which contains the provisions regarding the
process of doing business in UK. This act has a great impact on business as it convey the
procedure to run the business, showing legal path to the company and also at the time of winding
up assist the company. Its a main act for the business without this act there will be a great chaos
in the business environment.
M1- Evaluate the effectiveness of the legal system in terms of recent reforms and
developments.
It is very important to regulates all the laws which are already came into existence, there
must be some governmental authority who performed this duty. Law Commission is the body
which take care of all the laws, it cam into existence since 1965. From that year they gave their
contribution in regulating the laws of the United Kingdom. Commission's main motive is to do
research on new reforms and acts and try to find some amendments areas where they can bring
some changes in the reforms due to which it makes the legal system effective. The changes were
provided by the commission to the parliament and leave on the parliament only to develop the
reforms (Idris, Saridakis, and Khan, 2022). There are some changes made by the commission in
the areas of jurisdiction or in the court system, the changes are done on the rules of contempt of
court and provisions were added in the family law especially in the provision of purchasing the
property by an individual.
M2 – Analyse the potential impact on business through differentiation between legislation,
regulations and standards.
Legislation, regulations and standards are three different terms which are connected with
other. They have different areas of working and functions but at the end its all are the part of
English legal system. Firstly the term legislation came into picture which have a significant duty
to perform for the legal system, its a primary and the only body government body consist of the
parliament has a duty to make the laws for the whole State. Legislation deal with the bills
introduced in two houses of parliament i.e. House of Common and House of Lords. After
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legislation there is a function of regulating the laws, regulations means implementation of laws
carefully and present the laws to the public in their original manner. At the end after presenting
the laws in its real face, its time to tell the public about the laws and maintain the value of laws in
the eyes of public. Standard means to provide the direction to obeyed the laws in which the
direction was made to obey the laws.
TASK 2 ( Report)
P4 – Evaluate how different types of business organisation are legally formed.
Before doing a business it will be better for the person to decide the structure of a
business organisation because each and every structure has different features and legal
obligations in regard to taxation policy, fund raising, number of members, ownership etc. it will
be beneficial for the person to get all the knowledge about the business market.
Sole Proprietorship
It is the most simplest form of business structure as it only has one owner which control all the
activities of the business organisation and perform all the business operations individually. As
the only owner of the business organisation has some benefits and also some disadvantage of it.
Such type of business organisation has very simple process of establishing and due to very less
administrative responsibilities management of the company becomes very easy (Lee, 2021). Sole
trader has to make the registration of the company at HMRC for legality of the company.
Partnership
After the sole proprietorship, partnership form of business structure is very plain in which there
can be more than one person who holds the title of ownership. Before starting the business and
trading in this form of business structure partner who agrees to share the company loss and profit
together came into a contract agreement which make them bound to fulfil all the requirement of
the partnership firm. To build the legal image of the company in front of business market
partner's should do the registration of the company at HMRC. After the registration partners are
responsible to send the partnership tax return.
Limited Company
Doing business with the Ltd. Company means to carry the large scale business company as it
requires high amount of fund and responsibilities to carry the business smoothly. There are some
board of directors who are responsible for managing the Ltd. Company. Such big companies got
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their registration at Companies House and at the time of registration only they have to prepared
two documents i.e. Memorandum of Association and Article of Association.
P5 – Explain how businesses organisation are managed and funded.
People started doing business to make money and reputation in the business market and
the requirements of starting the business is also money. There are different types of business
structures which has different areas of working and has different demands in relation to fund.
Sole Proprietorship
Such type of business organisation which has only member and who is also the owner of the
company, it can be analyse that it requires less amount of fund to meet with the expenses (Ma,
2018). As a single owner of the company it doesn't require any sharing of profits, distribution of
salary etc. there is just a normal expenses of the company. To cover up the necessary expenses of
the company the sole trader can raise fund through banks by raising loan, borrow money from
acquaintance and family members.
Partnership
Unlike the sole trading this type of business structure has more than one owner who brings their
own share capital at the staring of the business. That brought share will decide their share of
ownership in the company. This structure has some responsibilities like; liabilities pf the
company such as debts and loss, distribution of salary among the partners, tax paying
responsibilities etc. Such business organisation has some source of raising funds like;
crowdfunding, bonds, loan etc.
Limited Company
It is the most complex form of business structure as it has many members, directors, workers and
also thousands of shareholders who invest in the company by purchasing the shares of the
company and this is the common way of raising fund for such type of Ltd. Business
organisation.
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P6 / M4 – Compare and contrast different sources of legal advice and support for dispute
resolution to make appropriate recommendation to legal solutions.
The most common form of solving the dispute is the court system. This method is very
ancient even before the courts people got the justice in the court of King (Noone, and Ojelabi,
2020). People have faith in courts and they believes that only through judicial proceedings they
would be able to get the justice. Other than court system there are some other methods also
which helps in solving the disputes outside the court, these methods can be learn through some
scenario given below;
Case Scenario 1
Legal issue- Is it justifiable to demand claim by workers from their employer's?
Legal solution- To solve the matter of claims it will be better to solve the dispute through
negotiation.
Justification- Negotiation is the method which can be use in those cases where there is a need of
bargaining. Both parties try to bargain the amount they want or to pay. One person has appointed
who provide an advice to the parties known as negotiator. Advice passed by them do not bound
the parties.
Case Scenario 2
Legal issue- The charges asked from Janet to provide the service including phone line charges is
justifiable or not?
Legal solution- To make sure about the justification about charges it will be better to use the
process of mediation to solve the dispute (Osier, 2020).
Justification- Mediator is the person who heard the parties and after hearing he gave such an
advice which would not be harmful to any of the party.
Case Scenario 3
Legal Issue- Is the application is maintainable or not for the purpose of winding up by one of the
company creditors.
Legal solution- In the context to Black-Horse company to solve the matter of winding up the
company arbitration is the method to solve the dispute.
Justification- Arbitration is the method which is more common as compare to negotiation and
mediation. It is similar to the court proceedings the only difference is, through arbitration parties
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got the relief soon. An arbitrator has to be appointed who heard the parties and paased the
judgement which bound the parties.
M3 – Analyses the advantages and disadvantages of the formation of different types of
business organisation.
There are various types of business organisation's like; sole proprietorship, partnership,
limited liability partnership and limited company (Taiji, 2020). These are some different types of
business organisation's which carries different features, characteristics and independently they
have its own merits and demerits which are discussed below;
Advantages of Sole proprietorship
 It has the simplest structure.
 It requires very less fee for the registration
 Enjoys all the profit individually
 Less risk
 Less investment
Disadvantages
 Owner carries unlimited liability
 No financial support
 No sharing of risk
 Tax has to paid from personal profit
Advantages of Partnership
 Process of establishing the company is easy
 Risk got regulates by the partners
 Investment can be done easily
 company's liability got shared among the partners
Disadvantages
 Every partner has a burden of company's liability
 Partner's are liable for other misconduct and negligence
 Profit got shared among the partner's
Advantages of Limited Company
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 Members are free from the liability
 Raising fund is an easy task for the company
Disadvantages
 It becomes difficult to manage the company
 Compose high administrative responsibilities
 Require high fee for registration the company
CONCLUSION
In the above given assessment various topics were got discussed regard to business law of
the United Kingdom. The assessment was done in two parts, the first part would got covered in
the form of essay and the topics which were discussed in the essay format are; different sources
of UK law in which both primary and secondary sources were explained, role of UK government
in law making, impact of Employment Law and Contract Act in business would be discussed
and in the last part of essay three terms i.e. legislation, regulations and standards got briefly
shown and discussed. In the another part of the assessment which has done in the format of
report, and it covers various topics like; legal formation of different types of business
organisation, process of business organisation got their fund, some scenario got discussed with
their legal solutions and in the last merits and de merits of different business structures got
discussed.
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REFERENCES
Books and Journals:
Abdul-Malak, M.A.U. and Senan, M.H., 2020. Operational mechanisms and effectiveness of
adjudication as a key step in construction dispute resolution. Journal of Legal Affairs
and Dispute Resolution in Engineering and Construction, 12(1), p.04519051.
Alfouzan, A., 2020. Proposing CSR Provisions in Kuwaiti Legal Vision: A Middle-Ground
Between UK and Indian Companies Law. In Governance and Sustainability (pp. 43-68).
Springer, Singapore.
Brown, R., Liñares-Zegarra, J.M. and Wilson, J.O., 2018. What happens if the rules change? The
impact of brexit on the future strategic intentions of UK SMEs. The Impact of Brexit on
the Future Strategic Intentions of UK SMEs (March 1, 2018).
Hagiu, I., 2020. Alternative Dispute Resolution Methods and E-Justice: Solutions for Court
Support. Law Annals Titu Maiorescu U., p.148.
Idris, B., Saridakis, G. and Khan, Z., 2022. The effect of outward and inward internationalisation
on different types of innovation: evidence from UK SMEs. Journal of International
Management, 28(2), p.100903.
Lee, J., 2021. Mapping an Investor Protection Framework for the Security Token Offering
Market: A Comparative Analysis of UK and German Law.
Ma, F., 2018. Statutory derivative actions in China and the UK: ten years on. The Company
Lawyer, 40(1), pp.28-38.
Noone, M.A. and Ojelabi, L.A., 2020. Alternative dispute resolution and access to justice in
Australia. International Journal of Law in Context, 16(2), pp.108-127.
Osier, M., 2020. Discussion Report–UK and EU Company Law After Brexit. European
Company and Financial Law Review, 17(2), pp.200-204.
Spotorno, A.R., 2018. Piercing the corporate veil in the UK: The never-ending mess. Business
Law Review, 39(4).
Taiji, R., 2020. Gender, nonstandard schedules, and partnership quality in the UK: Exploring
heterogeneous effects through a quasi-experiment. Social Science Research, 85,
p.102370.
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