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

This guide on Business Law covers the sources of law in the UK, the role of government in law making, and the impact of company, employment and contract law on businesses. It also explains the legal forms of business organizations, including sole proprietorship and partnership.

BUSINESS LAW

Contents
INTRODUCTION...........................................................................................................................1
PART 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
PART 2 (REPORT).........................................................................................................................6
P4 Explain how different kinds of business organisations are legally formed............................6
P5 Explain how business 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..............................................................................................................................10

INTRODUCTION
The United Kingdom is the easiest place to set up a business in Europe, as per the World
Bank it just take thirteen days to set up a business in the land of UK and it got the fourth position
in regard to best place of doing business around the world. Even now the government of UK
have a plan on some areas for growth to cut down the corporate tax rates which helps to make
the UK the best place all over the world in doing businesses. Their main aim is to attract all the
sizes of the business organisations and the investors by providing them a healthy and competitive
platform. Despite of current economic disruption and many global challenges which was faced
by Europe, the UK business environment act positively and always have a mindset to look for
future opportunities this mindset provide them a great position in the global business market, the
private sector got encourage and that will be reason that UK is the world's sixth largest economy
and one of the world's top ten manufacturers are based in UK. The UK is also the world's second
largest services exporter and the world's sixth- largest trading nation. There are many companies
of different countries which have their headquarters in the UK. All the success in the field of
businesses on which more than half of the economy is based on business sector would got
achieved due to the act which got enacted with the motive to make UK the best place to do
business around the world (Armour, and Enriques, 2019). That act or laws was came into force
in 2006 with the name of Company Act. This is the act which become the legal model for all the
business organisations of UK, it provides various rights and impose various duties on business
companies to make them legal and support them to achieve their desired targets. Further there are
many other acts also which influences and put positive impact on businesses are; Employment
Act, Contract Act etc. The Employment act helps the companies to know the value of employees
and bound the employers, mangers of the companies to provide all the basic needs to their
employee's. Just like employment act the contract act plays the crucial role in supporting the
businesses, through contract many big or important deals were got completed and even the
employees contract with the employers bound them to treat them properly and support them. The
above assessment was got divided into two parts and in these two parts various questions will be
discuss in relation to UK businesses.

PART 1 (ESSAY)
P1 – Explain different sources of law.
In the United Kingdom there is a democratic form of government it means there is a
voting system in regard to elect the people who got the position in the parliament of UK and
there they deal with the bills and do the efforts to find out the areas of amendments and in the
last send the bill to the Monarch who is the Queen of England. In the United Kingdom the
sources of laws are divided into two parts which is primary source of law and the secondary
source of law. These sources are discuss below;
Primary sources of law- The main source of laws in UK is the parliament, there is no other
body whether it is private or public who have the right to make laws. In primary source of law
there is a governmental body known as parliament which follows the legislation process to make
the laws. The parliament of UK consist of two houses which have the responsibilities to deal
with the bills and covert them into law. These two houses are known as House of Commons and
House of Lords. These two houses with the procedure deal with bills which got introduced in the
parliament and after doing all the amendments in the bill it will be send to the Monarch for the
Royal assent, after got the royal assent the bill become the Act of parliament (Bellaby, 2019).
Another primary source of law is the Judicial Precedents which is also known as case laws,
these are not the laws which are made by the parliament. These are the judgement's of the
Superior courts like Supreme Court and the High Court which acts like a law for all the
subordinate courts. These judgement's can only be use a law when the subordinate courts are
facing the same matter of case on which the Supreme Court made the judgement's, if there is a
same fact and principle of law then there is no need of litigation on that matter.
Secondary source of law- In these sources all those interpretation would be treated as laws
which are given by the retired Supreme court judges. They are real thinkers of laws and experts
who have the knowledge about laws. These retired judges write their own books and journals in
which they give some ideas on laws and these ideas can be use as laws at the time of
contradiction of laws in the proceedings.

P2- Explain the role of government in law making and how statutory and common law is
applied in the justice courts.
The UK government has the potentiality to bring out such laws which never bring
contradiction in the laws. They perform their task with the care and for the betterment of the
state. The law making process is not for anyone or for any governmental body, its just only a
duty of the UK parliament to make laws and regulates smoothly all over the State. The UK
parliament follows the prescribed procedure of making laws which are divided into various
stages. Those stages will briefly discuss below;
First Reading- In the first stage only the formalities would be done by the House of Lords. The
main thing which done in the first stage is that, name of the bill got read in the chamber.
Second reading- from the second stage main activities would be started where the facts of the
bill got debated and the areas of change would be found in the bill (Bennett, and Vines, 2022).
Committee stage- In the committee stage bill would check thoroughly from the start to the end
and by voting it would get decided about more amendments in the bill is required or not.
Report Stage- In the report stage further verification would started and more areas of
amendments in the bill got found and decided whether more changes would have to done or not.
Third reading- this stage would be considered as the last for the amendments, last opportunities
would be given to find and error in the bill.
Consideration of amendments- The changes which are made by the parliament would be
transfer to the House of commons to verify the changes that, whether the changes made ny
House of Lords are correct or not. The house of Commons have a choice to accept the changes,
brings out some more changes or they can reject the changes made by Lords. If any changes was
made by House of Lords the, again it would be sent to the Lords and the same right would Lords
carried like Commons. This change process in the bill known as Ping Pong.
Royal Assent- After both the houses got agreed on some point of bill where there is no need of
changes seem then, with the majority bill got sent to the Monarch to get the Royal assent. It is
necessary to take the royal assent from the Monarch. After the consent the bill got converted into
law or the “Act of parliament”.

P3- With the help of examples, illustrate how company, employment and contract law has put
potential impact on business.
Doing business is not an easy task to perform there are many factors which influences the
business activities. There are some internal as well as some external factors which put an impact
on businesses. Businesses are done with the motive of earning profits and every businessman has
a desire to take their business at the highest level. There are various type of business structures
which carries different features and characteristics with them. Some are easy to control and some
are very complex in nature. It is important to carry on the business with all the legal formalities,
if not then company has to pay the penalty for it and it has to see some bas consequences. To
give the model for the business organisation the UK government enacted the company act which
is the main act for all the organisation because it provides various rights to the business
organisation and also bound them to perform some duties which is mandatory to perform while
doing businesses like; registration, tax payment etc. There is not only the company act which
influences the business organisation, there are some acts also which has a impact on businesses
like; employment act and the contract act (Brummer, 2018).
Employment Act- The main reason to enact such laws is to build the professional relationship
between the employers and the employee's. Prior to this act the situation of the employee's are
very drastic they got exploited by the employer's in various manner like; they were not treated
fairly at workplace, not provided minimum wages to them, not provided leaves to them, showed
discrimination and remove them after completion of task without following the proper procedure
of removal. This act provides the rights to all the employee's and bound the employers to treat
their employee's fairly. Employee's are the real assets of the company and its essential to
maintain the assets of the company otherwise company has to suffer their success. Employment
act put the potential impact on businesses, it will give positive working environment in the
company.
Law of Contract- Contract are made by the parties to bound each other to perform their duties.
The contract gives the surety to all the employee's that the employer's are not able to remove
them without following the legal procedure. In businesses various big deals were taken place
which carries lot of amount between the organisation, that big deals demands the surety that the
organisation is reliable to trust or not. If the companies doing some deal and made a contract for

it then it means that the other business organisation is bound to complete their part of duty if not
then, the organisation has to pay the compensation for it (Bruno, and Lapsley, 2018).
Company Act- It is the main act which carries various provisions related to company making
rules and even winding up the company. The act contains 1300 sections and 16 schedules which
provides the legal knowledge to run the businesses.
M1- Evaluate the effectiveness of the legal system in terms of recent reforms and
developments.
If any reform got introduced it put the direct impact on English legal system, there is a
statutory body Known as Law Commission which has a duty to maintain all the laws. Law
Commission got introduced in 1965 and from that year it performs the duty to examine all the
laws. Law Commissions are set to bring efficiency in new reforms and make it cost effective, it
brings out some changes in the new reforms and after the changes got made it would be send to
the UK parliament, its up on the parliament to consider the changes. There are some changes
which are made by the Law Commission in various reforms like; jurisdiction system of courts,
contempt of courts and also some changes in the family law (Choonara, 2022).
M2 – Analyse the potential impact on business through differentiation between legislation,
regulations and standards.
The term which are given in the question are related to same field which is law. The term
legislation means, its a body which has the power of making laws fro the State. Its a procedure to
make laws and it cam be done with the help of Houses which deal with every bill. The term
regulations means to control all the existing laws and present the laws in their real sense to the
public. After regulating the laws it would be essential that the laws which are made would be
followed by the people.

PART 2 (REPORT)
P4 Explain how different kinds of business organisations are legally formed.
The different forms of business organisation are established according to the availability of
resources, finance and profit. Each organisation posses some advantages and disadvantage
according to its nature, type and size. There are few organisation which is easy and simple to
form. Whereas some of the organisation involves complex legal formalities and legal procedure
as per the provision laid down under any statute. Although, few organisation is not compulsory
to register.
The following business organisation are detailed out below:
Sole proprietorship – it is singly owned business that is run by the sole trader. The functioning
of a business lies in single hand who is fully responsible for all the management of an
organisation. It requires less investment and chances of expansion is low. Sole trader is entitles
for all the profits and revenue earned by the business. The major drawback of sole proprietorship
is that the liability of the members is unlimited due to which he bears all the losses through his
person assets (Hess, 2018).
Partnership – it is formed by two or more person which is established to carry out the business
activities with the motive of earning profit. An agreement is made between the partners which
defines the right s and responsibilities of each partner and termed as partnership deed. It is not
compulsory to register a partnership firm but advisable to made in writing to avoid any conflict
and misunderstanding among the partners. The biggest drawback of such forms of business
organisation is the unlimited liability of the partners and there is chances of conflicts due to
difference in their perception and culture.
Limited Liability Partnership – this form of business organisation is an extensive form of
general partnership and involves some feature of company such as legal existence of the
business. The liability of the partners is limited and not required to pay off their debts from their
personal assets. But there is chances of violation of privacy right of the partners due to public
disclosure of financial statement and accounts.
Limited Company – it is governed by the Act of 2006 that provides detailed information in
relation to the establishment and incorporation of a company. It posses several unique features
which includes company has separate legal existence, common seal, perpetual succession and
many more. It defines various roles and powers of the employees, and directors ho are the core

part of the company. It is dealing with complex procedure and involves huge investment. The
capital of the company can be raised with the help of shareholders who contributes their part of
share in the company (McIntyre, 2019).
P5 Explain how business organisation are managed and funded
Fund is an essential element of the organisation is it help in meeting day to day requirement of
a business. It helps in dealing with uncertain and dynamic business environment. The finance
manager is responsible for managing and utilising the resources in most effective manner. An
organisation meets their financial assistance through multiple sources. It is one of the factor that
reflects the performance of the company in the competitive market. It helps to expand the
business in the global market.
There are some sources of funds for different business organisations which are discuss below;
 Sole Proprietorship- In this type of business structure which is very simple and easy to
establish, not required the high amount of fund for the business. There is only one person
who is the owner of the company it means no amount needed to distribute, it just require
to bare some personal expenses of the company which are bills, to maintain the stock etc.
to maintain such expenses it really not required high amount of fund. In sole trading fund
can be raise through bank loan, owner can borrow the money from acquaintance or
relatives.
 Partnership- Unlike the sole proprietorship there are more owner and the expenses were
also heavy in this type of business structure. The main source of fund are the partners
who bring their share of capital to become the owner and part from this this business
structure can raise the fund through bonds, crowdfunding and through bank loan.
 Limited company- This business structure is the most complex one which has many
formalities to perform and also there are many expenses which company has to bare.
There are some board of directors which are responsible for raising funds, for this
purpose at the time of raising fund the company issue an invitation for the public in
which they invite to purchase the company share. Through this process company raise a
lot of fund from the public (Payne, 2021).

P6 / M4 – Compare and contrast different sources of legal advice and support for dispute
resolution to make appropriate recommendation to legal solutions.
If some dispute would occurred between the parties the only option they think to get the
remedy is take the dispute in the court. In the court with the assistance of counsel the parties got
the remedy but it takes time. Apart from the court remedy there are some options available for
taking the legal advice or to solve the dispute outside the court room. Some scenario are given
below which can be solve through alternative dispute resolution (Sanchez-Ruiz, Wood, and
Long-Ruboyianes, 2021).
Case Scenario 1
Legal issue- Is it justifiable to demand claim by workers from their employer's?
Legal solution- Claims matter required some negotiation, to solve this matter negotiation is the
method through which this matter will end.
Justification- In negotiation process one person got appointed by the mutual decisions of the
parties known as negotiator. He listened both the parties and according to that passed an advice
to negotiate the amount.
Case Scenario 2
Legal issue- The charges asked from Janet to provide the service including phone line charges is
justifiable or not?
Legal solution- Mediation is the method which can be use to solve this matter.
Justification- In this method one person got appointed known as mediator, he should be
unbiased and give their best to solve the dispute.
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 purview of Black-Horse company, arbitration is the best method to solve
the dispute.
Justification- Arbitration is the most common method after the court system. In this method one
person would be appointed either by the parties mutual consent or trough court. In this method
arbitrator after listened the parties passed the judgement which is mandatory to obeyed by the
parties (Themistocleous, 2019).

M3 – Analyses the advantages and disadvantages of the formation of different types of
business organisation.
Some different kind of business structure are running in the UK business market which
carries different feature and also some advantages and disadvantages which are mentioned
below;
Advantages of Sole proprietorship
 It has easy process of establishing the business organisation
 Demands less responsibilities to perform
 Owner enjoys all the profit individually
Disadvantages
 Owner carries unlimited liability
 There is no one with whom owner can share the risk
 No financial support in the company
Advantages of Partnership
 Its establishing procedure is simple
 risk got distributed among the partners
 Liability got shared
Disadvantages
 partners are liable for all the company liability
 partners are liable for other partners misconduct or negligence
 Tax would be paid from income
Advantages of Limited Company
 Partners doesn't carried any liability of the company
 raising fund is easy
Disadvantages
 Hard to manage the business activities
 High fee for the registration
 Has high administration responsibilities
CONCLUSION
The above assessment has covered into two parts, first one is essay and another one is
report. The whole assessment has covered various topics related to business and the functioning

of the business organisation. In the first part topic which got covered are; role of the government
in making laws,impact of contract and employment law on businesses. In another part which was
done in the format of report covered the topics like; formation of companies legally, sources of
raising fund by the different organisation and in the last where the report ends, advantages and
disadvantages of different business organisations got mentioned.
REFERENCES
Books and Journals:
Armour, J. and Enriques, L., 2019. Equity Crowd Funding: An Acid Test for Securities
Regulation. Capital Markets Union and Beyond; The MIT Press: Cambrige, MA, USA,
p.203.

Bellaby, P., 2019. Sick from work: the body in employment. Routledge.
Bennett, A. and Vines, D., 2022. The EU–UK Trade and Cooperation Agreement: lessons
learnt. Oxford Review of Economic Policy, 38(1), pp.68-81.
Brummer, V., 2018. Community energy–benefits and barriers: A comparative literature review
of Community Energy in the UK, Germany and the USA, the benefits it provides for
society and the barriers it faces. Renewable and Sustainable Energy Reviews, 94,
pp.187-196.
Bruno, A. and Lapsley, I., 2018. The emergence of an accounting practice: The fabrication of a
government accrual accounting system. Accounting, Auditing & Accountability
Journal.
Choonara, J., 2022. The problem with precarity: precarious employment and labour markets.
In Faces of Precarity (pp. 94-113). Bristol University Press.
Gould, E., Offences relating to “dealing” in cultural property: The UK approach. In Global
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Hess, B., 2018. The Private-Public Law Divide in International Dispute Resolution. Brill.
Knapp, V., 2020. UK and EU Company Law after Brexit. European Company and Financial
Law Review, 17(2), pp.184-199.
McIntyre, J., 2019. The Judicial Function. The Judicial Function,(Australia, School of Law
University of South Australia Adelaide: 2019).
Payne, J., 2021. An Assessment of the UK Restructuring Moratorium. Available at SSRN
3759730.
Sanchez-Ruiz, P., Wood, M.S. and Long-Ruboyianes, A., 2021. Persuasive or polarizing? The
influence of entrepreneurs' use of ingratiation rhetoric on investor funding
decisions. Journal of Business Venturing, 36(4), p.106120.
Themistocleous, C., 2019. Employment status in the UK: implications for business
owners. Journal of Aesthetic Nursing, 8(2), pp.92-94.
Trivedi, C., 2021. The Unwritten Constitution Provides Greater Opportunities for Human
Rights: A Comparative Analysis of the Constitution of India and UK. Issue 4 Int'l JL
Mgmt. & Human., 4, p.1611.
Warren, K.F., 2018. Administrative law in the political system. Routledge.