Business Law: Sources, Role of Government, Impact on Business, Legal Forms and Funding

This report covers various sources of law and its impact on the business organisation. It explains the role of government in law making, different kinds of business organisations and how they are legally formed, and how business organisations are managed and funded. It also provides a critical evaluation of the legal system and law with examples.

Unit 7: Business Law

Table of Contents
INTRODUCTION ..........................................................................................................................4
TASK ..............................................................................................................................................4
P1. Explain different sources of law...........................................................................................4
P2 Explain the role of government in law making and how statutory and common law is
applied in the justice of courts....................................................................................................5
M1 Analyse the effectiveness of the legal systems in terms of recent reforms and
developments ..............................................................................................................................6
P3 Using specific examples, illustrate how company, employment and contract law has a
potential impact upon business ..................................................................................................6
M2 Analyse the potential impact on business through difference between the legislation,
regulations and standards............................................................................................................7
D1 Provide a coherent and critical evaluation of the legal system and law, with evidence
drawn from a range of different relevant examples to support the judgements. ........................8
PART 2............................................................................................................................................8
P4 Explain how different kinds of business organisations are legally formed...........................8
P5 Explain how business organisation are managed and funded ...............................................9
M3 Analyse the advantages and disadvantages of the formation of different kinds of business
organisation. .............................................................................................................................10
D2 Critically analyse the formation of different kinds of business organisation .....................11
P6 Compare and contrast different sources of legal advice and legal support for the dispute
resolution to make appropriate recommendation to legal solutions. ........................................11
M4 Recommend legal solutions for resolving a range of disputes, using examples to
demonstrate how a party might obtain legal advice and support .............................................12
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business law is defined as the core area of legislation that are important to consider in
order to secure the right of the individual and organisation. The emergence of UK legal system
take place from the common law system that is based on the principle of equity that provides fair
and just treatment to all the individual. It provides comprehensive framework that monitors,
governs and regulates business activities. It is important for an organisation to create sense of
belongingness and harmony among the people so that they become satisfied at workplace to put
their efforts towards the organisational goal. Employees are the asset of the organisation who
contributes in performance of the business. The regulatory framework of UK imposes an
obligation over the organisation to secure the interest of its employees to promote their retention
and prevent conflicts among the other employees. Business Law covers range of protection that
are provided through different legislation including employment law, contract law and company
law etc. according to the nature, type and size of the business (Aguda, 2018). This report will
cover various sources of law and its impact on the business organisation. Further, it will analyse
the current reforms that take place in the economy of UK. Also, it includes significance of
financial resources that must be properly utilised and managed and mechanism that provides
amicable settlement of dispute through Alternative Dispute resolution mechanism.
TASK
P1. Explain different sources of law.
The UK legal system is varied and diverse as it provides various detailed legislation that
safeguards the right and interest of the individual. It is unwritten and uncodified, based on the
Principle of equity that provides just and fair legal system to all its citizens. Legislation and case
laws are considered as the primary sources of law in United Kingdom. The legislative authority
is the law making body that frames statutory policies and regulation to enforce their legal right.
Primary Sources of Law
The Common law is the primary source of law that is identified as the law of land and plays
significant role in the growth of English legal system. The role of International Convention,
treaties, customs etc. are important to give legal existence to the rights of the citizens. Also, case
law is the another source of law that is used as judicial precedent, derives through different
judicial matters (Akhtar, 2020). It act as a judicial precedent for the lower court and help them to

decide the similar issue arise in any of the case. Although, legislation is made with the help of
proposed Bill that are presented before the two Houses of Parliament who gives their assent to
the Bill to implement it as a law. However, legislation palsy signifiant role in maintaining law
and order in the society. Law is a set of rules and regulation that governs the behaviour and
conduct of the citizens. It influences the act of the individual and reduces the crime rates in the
society. The judicial authority contributes in securing the right to access justice of the victim as it
is their fundamental and legal right. The power of legislative body is divided into two parts
named Delegated Legislation and Primary Legislation. In Delegated legislation, some authority
has been given to the Delegated legislation to frame its own views for reducing the burden over
the legislative authority especially when the Houses of Parliament is not present to make
necessary laws.
P2 Explain the role of government in law making and how statutory and common law is
applied in the justice of courts.
The development of English legal system derived from the common sources of law where
principle of just, fair and equal treatment are applicable to settle the dispute between the parties.
The paramount objective of UK legal system is to impart justice and ensuring safety and security
of the individual. Government are the official authority that exercise their roles and
responsibilities to penalise the offender by imposing strict penalties over them so that individual
can live freely without any stress and fear (Ali, 2018). The government are the executive
authority that enforce the right of the individual and facilitates their safety within the territory of
nation. The main objective of government is to promote social welfare and justice in the society.
Common law and Statutory laws in the judicial system
Common law and statutory law are dealt with two different forms of law in which one is codified
and another is uncodified. Common law is the unwritten and uncodified legislation that is
identified by various International Convention, statutes and customs etc. It is a procedural law
that provides detailed knowledge about the legal proceedings and formalities that are required to
claim Justice from the court system. Whereas, statutory law is the substantive law which is
written and codified that provides detailed framework to implement statute and laws in the
society that are binding in nature and have some legal consequences. These laws are effective to
fulfil the needs of the society and ensuring the peace and security in the country.
Role of Government in law making process

Government plays significant role in making laws and executing those legislation through
executive (Teague and Donaghey, 2018). The government identifies the societies need and
emerging issue that are affecting their rights. After that, government establish the proposed bill
including some suggestion and legal views are attached with it. Both the Houses of Parliament
consider the suggestion and bill is presented to overcome those challenges by implementing Bill
as a law. It involves complex procedure which includes lot of discussions and debates and then,
enforce the law as a legislation to bind the citizen with its legal provisions.
M1 Analyse the effectiveness of the legal systems in terms of recent reforms and
developments
There are various legal reforms has ben taken place in the English Legal system that brings
major change in the UK economy. The recent reforms and developments cover the areas of
business law, employment law, cyber act and many more. The modernisation and
industrialization in the UK economy, has also increased the number of offences against the
human body, property, and person. These new legislation aims to protect the right of the
individual and the organisation. The human conduct and behaviour also developed that leads to
criminal intent mind and use of highly equipped weapons stressed out the government and force
them to enforce strict laws against the wrongdoer (Butler, 2022). There are few instances that
shows recent development in the UK legal system such as Employment right Act that secures the
right of the employees and employers, Criminal Law Act of 1967, Equity Act of 2010 etc.
P3 Using specific examples, illustrate how company, employment and contract law has a
potential impact upon business
The regulatory framework made by the government helps the organisation to manage and
operate their business activities in most efficient way. It binds the organisation to legally comply
with the statutory provision that are made to regulate their business activities. The set of
standards and norms has been made to meet the requirement of the authority that are designed to
protect the rights of the consumers. The main reason for imposing of such legislation is to
provide safe and healthy goods and services to the potential users of the product. The company
Act of 2006 provides comprehensive legislation to incorporate and establish the business
organisation by following the certain steps that are important for establishing a company. It
provides the rights of the employees, shareholders and directors who re the core members of the

organisation. It provides the unique features of the company which includes its separate legal
existence, common seal, perpetual succession and company can sue and can be sued.
The employment law of the UK is another important legislation that governs and monitors the
activity of the employees and employers. It aims is to maintain the cordial relation between
them. It promotes the coordination and integration of work through encouraging and motivating
the employees towards the organisational goal. It covers range of protection that are available to
the employees so that thy become motivated and inspired to perform their job role at workplace.
The employment law protect the employees from all kinds of discrimination in terms of holidays,
salary, dismissal, paternity and maternity leave etc. The main objective of employment law is to
bring sense of belongingness and harmony among the employees. It enhance the quality of work
and improve work performance of the employees and employers. The contract of employment
defines the roles and responsibilities of employees and employers that are binding in nature. If
any of the party fails to legally comply with it, will be held liable for the breach of contract. It
boost the morale and confidence of the employees to sustain the long term growth in the
competitive market.
The contract law is the legal agreement that are made between the parties and are enforceable
against each other. Both the parties are mutually agreed to the terms of the contract and exercise
those rights against one another (De Girolamo, 2022). The party can claim damages and
compensation for the breach of the contract and the loss they has suffered.
M2 Analyse the potential impact on business through difference between the legislation,
regulations and standards.
The impact of legislation, regulation and standards have positive impact on the business. It
regulates, guide and monitor the business activities. It influence the business activities and direct
them to legally comply with those standards and provisions that are made by the officials to
conduct and process the production of goods and services.
Impact of Legislation, Regulations and Standards
Legislation are the rules and statutes that are made to regulate and exercise the legal provision as
per the said manner. It legally complies the organisation according to the nature, type and size of
the business. It is made to define the process, method and production of the products as per the
said provisions. Regulations are the direction and official order that are made for the businesses

to ensure the safety and health of the consumers. Whereas Standards has been made to meet the
level of quality and legal compliances that are mandatary obligation for the organisation.
D1 Provide a coherent and critical evaluation of the legal system and law, with evidence
drawn from a range of different relevant examples to support the judgements.
The unique legal system of UK is based on the constitutional monarchy and unwritten
constitution is the supreme law of land that defines the rights and functions of the authority. The
two Houses of Parliament such as the House of Lords and House of Commons are entitles to
discuss and debate for Bill to convert it into the effective legislation that will provide the benefit
to the public at large. The proposed bill becomes law and enforceable on all the individual with
some legal consequences.
PART 2
P4 Explain how different kinds of business organisations are legally formed.
There are various forms of business organisation that are legally formed as per the statutory
framework that are made to establish and form the business organisation. It is formed according
to the nature, type and size of the business and different statue are imposed on them. In which,
few organisation are very simple and easy to form whereas some of them involved complex legal
formalities. The liability and responsibility of each organisation is unique and bring efficiency in
the working system.
The range of business organisation are discussed below:
Sole proprietorship –The sole trader business is singly owned business and easy and simple to
form. The management and function of the business is performed by the sole trader. He is
entitled to enjoy all the profit and loss of the business. It involves less legal formalities and less
investment. One of the biggest disadvantage of this form of business organisation is that the
liability of the sole trader is unlimited and chances of investment is comparatively less.
Partnership – it consists of two or more person who are jointly formed the partnership firm and
carry out the business activities to earn profit. The partnership agreement has been made between
the partners which is known as the partnership deed (Haines, 2018). The major drawback of
partnership is unlimited liability of its partners due to which the partners can use their personal
asst to pay off their debts to creditors It avoid the conflicts and misunderstanding among the
partners at partnership firm.

Limited Liability Partnership – the liability of the partners is limited and it is an extensive
form of general partnership. They are not required to use their personal asset to pay debts and
they have some features of limited company and has separate legal existence. The major
drawback of this form of business organisation is violation of privacy right that may affect due to
public disclosure of financial statements and accounts.
Limited Company – it is legally complied with the provision of Corporate Act of 2006 which
provides procedure for its establishment and incorporation. It owes several distinct features due
to separate legal existence, have common seal, perpetual succession etc. The liability of the
members is limited and huge investment is required to attract the investors.
P5 Explain how business organisation are managed and funded
Finance is an important aspect of the organisation as it is require to manage and operate the
business activities. It is required for day to day operation of a business. The finance manger are
responsible for effectively managing and utilising the resources to avoid its wastage. It can be
raised through multiple sources and helps to meet the uncertain business environment. It assist
and guide the business to meet the financial need that is required at every stage of business.
There are some sources of funds that are discussed below in detail:
Equity Fund- It can be raised through shareholders who contributes their part of share to the
capital of the company. It contributes in raising the funds of the company that are crucial for the
expansion of the business. It is generally used by medium and large scale business.
Banking institution – the financial institution and banks are responsible for providing the funds
to the company at low rate of interest. It is beneficial for the small scale and medium scale
enterprises. Basically, it promotes startups and new innovative ideas to expand their business in
the market.
Grants- It refers to those funds that are given by the officials and government bodies to
encourage new startups and business when they need financial assistance (Lemassel, 2020). It is
given to promote innovation and new ideas that contributes in the economy of the country.
Crowdfunding- it is such source of fund that is raised with the help of donation and demanding
the public to assist for funds. It is useful method for new businesses to overcome the need of
finance. The small and medium scale enterprises is used such kinds of finance source.
Angle Donors- These are the family embers and friends who contribute in rasing funds to meet
financial needs of the business. It ensure further expansion of a business.

M3 Analyse the advantages and disadvantages of the formation of different kinds of
business organisation.
There are range of business organisation that are formed according to the availability of the
resources and needs of the business. It is associated with certain advantages and disadvantages
according to the form of business organisation are discussed below:
 Sole Trader
Advantages
Sole trader business is most suitable form of business organisation if individual have less
resources and funds and capital. It is most simpler form of business organisation which involves
less legal formalities and easy to establish.
Disadvantages
In this, the chances of expansion and profit is less. The unlimited liability affects the personal
asset of the owner.
 Partnership
Advantages
The loss and expenditure of the business are equally contributed by all the partners. It involves
less formalities and not compulsory to form written document of partnership deed (Macgregor,
2019).
Disadvantages
The liability of all the partners is unlimited due to which their personal asset are highly affected
and pay off their debts to creditors.
 Limited liability partnership (LLP)
Advantages
It has all the features of the company and liability of the members is limited. The partners are not
required to pay off their debts to the creditors.
Disadvantages
There is violation of privacy right of the partners due to public disclosure of all the financial
documents that are mandatory to produce before the companies House.
 Limited Company
Advantages

It is complied with the provision of Corporate Act of 2006 which gives widest protection to all
the members and stakeholders who are associated with the functioning of an organisation. The
company is always distinct from its members .
Disadvantages
It deal with complex legal procedure that are required to incorporate a company. It demands
huge investment that are important to attract the investors to raise the capital of the business.
D2 Critically analyse the formation of different kinds of business organisation
The different forms of business organisation includes the sole proprietorship, partnership,
limited liability partnership and limited company that are formed to earn profits and higher
revenue to expand the business. It involves less and more legal compliances according to the
nature and type of the business.
P6 Compare and contrast different sources of legal advice and legal support for the dispute
resolution to make appropriate recommendation to legal solutions.
The Alternate dispute Resolution mechanism is the most effective method of settling the
dispute between the parties. It is less costly and time saving process that provides speedy legal
solution to the parties. It is used to amicably settle the dispute between the parties ad improve
effective communication among them (Mitkidis, 2019). It is less complex than the Litigation
process where long hours of trial and proceeding has been taken place to provide justice to the
party.
CASE 1
Issue – Whether the employees claim for wages are valid?
Solution – The party can solve their issue with the help of negotiation process that will give
them legal solution to deal with the problem.
Pretext – The negotiation process is considered as the appropriate mechanism that are used to
address the legal issue to resolve the dispute between the parties.
CASE 2
Issue – Whether imposition of cost for instalment of telephone connection lines are
appropriate?
Solution – The process of mediation is a suitable option for dealing with such issue.
Pretext – With the help of mediation, party can resolve their dispute with each other as it is
speedy and cost saving method of ADR.

CASE 3
Issue – Whether demand of creditors for determination is valid for appeal?
Solution – The process of Arbitration is desirable method to identify the issue and resolving a
dispute of Black Horse organisation.
Pretext – The party can resolve their dispute through quick and fastest mechanism of
Arbitration as it is binding upon the parties and involves less complexity of legal procedure.
M4 Recommend legal solutions for resolving a range of disputes, using examples to
demonstrate how a party might obtain legal advice and support
The range of dispute resolution mechanism is available for resolving the dispute between the
parties as it provide quick justice and legal solution to the parties. The emerging issue between
the parties can be settled down the dispute with the help of Alternative Dispute Resolution
mechanism. The matter can be resolved through following ways:
Arbitration – The process of Arbitration is conducted with the help of Arbitrator who is
appointed to settle the dispute between the parties (Smith, 2022). The decision made by the
arbitrator is binding and can be used to resolve the dispute between the parties.
Conciliation – This is the most effective method in which conciliator is appointed to conduct
amicable meting between the parties and mutually resolving their dispute. It provides speedy
remedial solution to the parties.
Mediation – The mediator is appointed to resolve the dispute between the parties. It is quick and
cost saving method that can be used to help the parties.
CONCLUSION
From this above report, it has been concluded that the UK legal system is unique and
complex and provides comprehensive legal system to secure the rights of the parties. The
common sources of law is International Convention, treaties, customs etc. that helps in
identifying the rights and interest of the citizens. The detailed legislation is made to ease the
functioning and operation of a business. The Company Act, Contract Act and Employment law
are the important statute of business law in UK. It provides rules, standards and regulation to
manage the business activities and securing the right of the stakeholders who are associated with
the organisation. The economic development of a country is depends on the effective legislation

that contributes in the growth of the business. The procedure of Alternate Dispute Resolution
mechanism is suitable option for resolving the dispute between the parties.

REFERENCES
Books and Journals
Aguda, O., 2018. The Legal Regulation of Receivables Financing: The UK and International
Perspectives. The Gravitas Review of Business & Property Law, 9(3), pp.50-67.
Akhtar, Z., 2020. Low Skilled Jobs, Free Movement Migration and Employment in the
UK. Labor Law Journal, 71(3), pp.144-153.
Ali, S.F., 2018. Mediation in the UK courts: Efficiency, Confidence and Perceptions of Justice.
In Court Mediation Reform (pp. 65-84). Edward Elgar Publishing.
Butler, L., 2022. Reform of the UK Single Source Contract Regulations: A Regulatory Weapon
in the Defence and Security Industrial Strategy’s Arsenal. Available at SSRN 4130092.
De Girolamo, D., 2022. ADR, cultural heritage and intellectual property: A continuum of dispute
resolution processes. In Research Handbook on Intellectual Property and Cultural
Heritage (pp. 544-564). Edward Elgar Publishing.
Haines, A., 2018. UK considers closer links between employment and tax rules. International
Tax Review.
Lemassel, M.M., 2020. Regulations of financial institutions in the US/UK.
Macgregor, L., 2019. Remedies for breach of contract in Scots law. In Research Handbook on
Remedies in Private Law. Edward Elgar Publishing.
Mitkidis, K., 2019. Development of transnational contract law?. In Transnationalisation and
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Morgan, J., 2022. THE THIN END OF THE WEDGE: MORALITY, CONTRACT LAW AND
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Poole, J., Devenney, J. and Shaw-Mellors, A., 2021. Contract law concentrate: law revision and
study guide. Oxford University Press.
Siliquini-Cinelli, L. and Hutchison, A., 2019. Comparative Constitutional Contract Law: A
Question of Legal Culture. In More Constitutional Dimensions of Contract Law (pp. 1-
13). Springer, Cham.
Smith, A.M., 2022. An empirical study of the effects of regulatory systems on the collection of
late payment of commercial debts owed to micro and small businesses in the
UK (Doctoral dissertation, University of Plymouth).
Teague, P. and Donaghey, J., 2018. Brexit: EU social policy and the UK employment
model. Industrial Relations Journal, 49(5-6), pp.512-533.
Vandich, A., 2022. Seven reasons to open a company in the United Kingdom.
Wesanko, J., 2021. A Corporate Compliance and Ethics Program Compliant With the Foreign
Corrupt Practices Act and the UK Bribery Act: Mission Impossible.
Williams, A. and Paterson, C., 2021. Social Development and Police Reform: Some Reflections
on the Concept and Purpose of Policing and the Implications for Reform in the UK and
USA. Policing: A Journal of Policy and Practice, 15(2), pp.1565-1573.