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

This article discusses the sources of business law, including primary and secondary sources, and the roles of government in law making. It also explores the potential impact of contract, employment, and company law on businesses, with examples. The report evaluates different types of business organizations and how they are legally formed.

Business Law

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK (ESSAY)...............................................................................................................................4
P1 – Evaluate different sources of law........................................................................................4
P2 – In law making what are the roles of government and how statutory & common law is
applied in the justice of courts....................................................................................................5
P3 – With the help of examples, illustrate how company, employment and contract law has
put potential impact on business.................................................................................................6
M1- Evaluate the effectiveness of the legal system in terms of recent reforms and
developments...............................................................................................................................7
M2 – Analyse the potential impact on business through differentiation between legislation,
regulations and standards. ..........................................................................................................8
TASK 2 ( Report).............................................................................................................................8
P4 – Evaluate how different types of business organisation are legally formed. ......................8
P5 – Explain how businesses organisation are managed and funded. .......................................9
P6 / M4 – Compare and contrast different sources of legal advice and support for dispute
resolution to make appropriate recommendation to legal solutions..........................................10
M3 – Analyses the advantages and disadvantages of the formation of different types of
business organisation................................................................................................................11
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Business law is the collection of laws in the form of Act which is consolidated and amend
the law relating to business. Business law is the branch of civil law which is categorised into two
dimensions, procedural and substantial. Procedural law are the laws which provides procedure
relating to formation of a business and adjudication process in the court of civil judicature to
determine the disputes. The supreme legal authority of the United Kingdom is the parliament
which frame and enact laws and with an intention to enforce them with resolute firmness. Law is
essential for civilization and no nation can survive without law. In the same way to organise a
business in better way it is very important to enact law in this regard. The United Kingdom is a
developed nation which has established many businesses and operating throughout the world.
The United Kingdom, has the best law for business which aims to promote and safeguard
businesses, the companies Act of 1948, is the law which has been amended several times to bring
best ways to promote and practice business in UK (Wilson Corker and Lane2022). The
Companies Act is the largest Act passed by the parliament of United Kingdom which contains
1300 Sections and 16 schedules. It is a legal framework which provides for the protection and
promotion of business sector. It contains provisions for the formation of a company, with
different potential business organisation and new procedures (Pickavance 2021). There are other
enactment which covers other things relating to business, business faculties or employees, these
laws falls under the ambit of substantial law which determines the rights and liabilities of an
employer and employee. Such enactments are, Employment law, Equality law. Doing business is
not an easy task, it requires a lot of skills and energy to deal with many situations on daily basis
inside and outside business. It requires good understanding of business law and practical
business knowledge to establish a business. Corporation law provided different business
alternatives as per the needs of the person who wish to establish business. Such as, sole trade
company, Partnership, General partnership, Limited Liability Partnership. A person is at liberty
to choose any of the business structure as per their vision and financial budget. This assignment
will be presented in two parts, in the first part, different sources of law, the role of the
government, different corporation law and their impact on business activities will be covered in
an essay form. Whereas, part two consist of different types of business organisation,
management and how a business is funded along with recommendation dispute resolution legal
system works in business sector.

TASK (ESSAY)
P1 – Evaluate different sources of law.
The legal system of the United Kingdom extends to mainly three jurisdictions, that is
England and Wales, Northern Ireland and Scotland. Each of these jurisdiction has there separate
legislation, adjudication, courts, judges and legal councils. Where an application of a law at one
jurisdiction, if enacted from the supreme legal authority which is parliament can be made
applicable similarly on the other jurisdiction under the force of law. The disputes of each
jurisdiction may be decided separately but the final adjudication falls in the jurisdiction of the
Supreme court of the United Kingdom (Takriti 2020). There is no definition of law provided in
any of the Act, the rule of interpretation is applied to determine the issues. Law is essential for
any civilization, without law no nation can survive because law not only governs the persons, it
infuse the feeling of obeying just laws in the minds of the people. It sets a moral responsibility in
the minds of people to obey and comply with the laws of the land. There are mainly two sources
of UK law, Primary and Secondary sources.
Primary sources : It includes the laws which are enacted by supreme legal authority which is
the parliament of UK. Law Enacted by Parliament are applicable throughout the territory of the
United Kingdom. The other primary source is the Case law which are the precedents passed by
the highest court of the UK which are of binding nature on all and the subordinate courts are
bound to follow the supreme court rulings.
The main source of UK law is legislation passed by the parliament because the process of
passing legislation is complex and critical. It takes a lot of discussion to pass an enactment.
Legislation consist of various stages to make an Act. It begins with an introduction of a bill in
the both houses of parliament, which are House of commons and House of lords. To accept a
bill a majority of two third is required, where a decision is taken on majority a bill may either
accepted or rejected. Where a bill is approved, then it is forwarded for the royal assent.
The Judicial precedents are decisions of the supreme court, which are made in the interest of the
people at large and are binding in nature, such decisions are made applicable throughout the
territories of the UK. Therefore, the subordinate courts are bound to follow the judicial
precedents of their superior courts.
Secondary source of law: It includes, commentaries, textbook, customs, usages which are either
written by the eminent jurist or the outcomes which are being practised for millennia and has

recognised as an essential form of practice. The law journals which are based on deep and
critical study and research which act as tool for resolving difficult challenges where
contradictions occurs between laws.
P2 – In law making what are the roles of government and how statutory & common law is
applied in the justice of courts.
Law making process cannot be performed by any authority or any body. It is job of great
responsibility which needs to be done with due care and caution. Law making process is the job
for a entire country and in the interest of the people. Laws are made for regulating civilization.
The power of law making lies in the hands of government which represents the nation and does
the work of nation building by implementing laws. The parliament of the United Kingdom,
which is known as the supreme legal authority consists of two house, the house of commons and
the house of lords. The primary function of these house is to introduce the bill and enact laws in
the form of an Act. The representatives of the government sits in the house and discussion is
being made on the bill, if the bill is approved by both the house, then it is put forward for the
royal assent and after the royal assent it gets the status of an Act which is later made applicable
throughout the UK. The stages in which a bill initiates its journey to become an Act begins from
first reading, wherein the bill in the form of draft is presented before either of the house. In the
second reading, discussion is made on the bill about its objectives and purpose and its negative
and positive impact on its application (Lerbinger2018). Thereafter, the bill after considering all
the facets of the bill forward to the committee stage, there discussion takes place about the
relevant changes which needs to be addressed. To modify or amend the bill it is sent to report
stage and after changes made, it jumps into the third stage, where house of commons review the
changes and forward to house of lords for the same. Where a bill is approved and got the
majority of both the house, it is sent for the final stage, wherein the bill is sent for the royal
assent, if assent given it becomes an Act (Dunoff and et.al2020).
In UK, there are two types of courts, the first one is the supreme court which is superior
to all. The other courts are high court and appellate courts. There are other courts which are
named as lower courts such as , family court, divisional courts, magisterial courts, revenue courts
etc. There are statutory laws made by parliament and common law which are derived from
customs and usages. The judgements passed by the supreme courts are of binding nature and
must be followed by the lower courts. On the other hand, statutory law applicable equally in all

the courts , whereas common law is only made applicable on all the subordinate courts (Camões
Tavares and Teles 2021).
P3 – With the help of examples, illustrate how company, employment and contract law has
put potential impact on business.
A business is not an easy task to run, it has a very complex activities which requires to be
address on daily basis. A business organisation is a large arrangement of various operations
which must ensure running smoothly and effectively. To control and govern the business
activities, UK parliament has passed several legislation on this behalf. Among them, a Company
Act which provides different types of business structure. The other law which ensures the rights
and liabilities of the business faculties or employees such as, Employment law, company law and
contract law.
Contract law : A contract is an agreement which is made enforceable at law to determine the
rights and obligations between parties. Contract law is a universal law which binds the parties
under an agreement to perform their duties. Similarly, companies can also enter into an
agreement or form a contract on its name. Contract law determines the limits and objectives
which needs to be performed. By way of contract the parties are under an obligations towards
each other to perform the conditions mentioned in a contract. It makes a company more
responsible towards its objectives because of legal binding and failing to comply with the terms
of the contract puts a party under an obligation to either to pay compensation or perform the
contractual obligation.
Employment law: The law pertains to protect the interest of the employees employed in an
employment. It provides various provisions which determines the rights and liabilities of
employees. Employees are the workforce of an organisation, therefore it is essential to safeguard
their interest and this can only be achieved by framing legislation. Employment guarantees many
rights to employees to protect them from all forms of discrimination, unfair treatment, unfair
dismissal and many more. It directs to maintain the decorum of working environment. An
employer under an Employment law imposed several obligations towards its employees, to
provide them healthy and safe working environment and treat its employee fairly without
harming their dignity.
Company law: Company Act 2006, is an Act which governs all the business organisations and
provides provisions for the formation and management of a company with the legal framework.

It also assist company in paying tax. The purpose of the company law is to make companies obey
the laws. Companies are required to perform as per the laws and Acts.
M1- Evaluate the effectiveness of the legal system in terms of recent reforms and
developments.
A body called Law Commission which does deep and critical research on business sector
for analysing and identifying deficiencies in business law and recommend essential reforms to
bring improvement in business law considering the present system of business law. Law
commission is an independent body which was constituted in the year of 1965 with the view to
make business law more fair, simple and cost-effective. Law commission generally prepare its
report and send it to the government to consider the changes. The government review the report
and decides whether to commence the suggested changes or not. The government if approves
the report, put it forward in the parliament to consider the changes in business law (Ryder 2019).
There are changes recommended in by the law commission on the issue of decision
making process and to adopt the use of advance technology (Keohane2019). Whereas the
administrative law is more focused on the legality of the decisions made by officials rather than
IT system. Lately, the law commission has recommended to introduced tech-related projects
which will enable to identify the conflicts of law and related issues such as, to determine whether
the court has the jurisdiction to hear the matter or not, other areas which the law commission has
recommended is to address on the law of contempt of court, contractual deeds and variations,
data sharing, personal law etc.
M2 – Analyse the potential impact on business through differentiation between legislation,
regulations and standards.
To enforce the law, administrative machinery of the government at state and national
level functions to meet the intention of the government and law. Bureaucracy is the machinery
which acts as the agent of an government to enforce the law passed by the parliament. All the
process of enforcing law needs to be followed with prescribed rules and regulation with specified
standards set by the government (Di Vaio., et.al.,2020). Such standards provides an inference to
ensure safety and efficiency in business sector.

TASK 2 ( Report)
P4 – Evaluate how different types of business organisation are legally formed.
Business law is also called as corporation law which is a collection of various laws,
among all there is a company law which provides different types of business structure which
prevails in the United Kingdom. Company law provides the clarity about the complex procedure
on business formation. There are following types of business structure which has their own
advantages and disadvantages.
Sole proprietorship
It is commonly known as sole trade company, which is owned by a single person. The
process of establishing sole trade company is most easy and simple among the other business
structures. The owner in sole trade company is entitle to keep all the profits, in the same way
owner is liable for all the losses of the company. The sole trade company needs to get register
with HMRC in order to process the self assessment tax return.
Partnership
It is an arrangement where two or more person mutually signifies their assent on an
agreement to carry out a business jointly and equally share all the profits and liabilities of the
companies. To form a partnership, members are required to prepare a partnership agreement
where they decided the terms and conditions on which the partnership will established. It is
mandatory to register partnership firm to obtain the legal status in the eyes of law. The partners
are individually liable for their conduct, there liability is unlimited and they are liable for the loss
of the company or to pay out the due to creditors (Taskin2019).
Limited liability Partnership
It is the form of arrangement which is almost akin to general partnership, the only
difference is it requires at least two members to form a partnership. The limited liability
partnership must be register with the Companies House and inform to HMRC. Unlike other
partnership, the liability of the partners is kept limited in this arrangement, partners are made
liable to the extent of their contribution in the partnership. They are liable for their own
misconduct or negligence towards the company. The company is not made liable for the acts of
the partners because in limited liability the company the rule of separate legal entity is applicable
(Watson2019).
Limited Company

It is a most complex form of business arrangement which requires high fee for its
incorporation and registration. Limited company has high administrative obligations to perform.
It is mandatory to register limited company with Companies House because such company
works at large scale. Limited company have board of directors whose role is to control all the
business affairs and to manage the performance of the company (Huang and Hands 2022). For
incorporation of a limited company it is mandatory to prepare charter of a company which is
known as Memorandum of association and Article of association, these documents reflects the
objectives and purpose of the company.
P5 – Explain how businesses organisation are managed and funded.
Each business structure has there own code of conduct to manage and regulate the
business operations. The survivability and stability of a business depends availability and flow of
adequate funding to maintain the business rotation. There are many forms of business structures
having different characteristics and way of functioning. In context of Sole Proprietorship, which
is owned by single owner and entitled for keeping all the profits of the company and liable for
unlimited liability in the company. Sole trade business is easy to establish with little investment
but where an investment is required, it becomes very difficult to attract investors because of its
unregistered nature. Such business can obtain funding form either form financial institution or
through their relatives or friends.
In Partnership business structure, wherein two or more members share the ownership in
the form of partnership are responsible for the functionality of business. Partners are responsible
for the business requirements. Each partner are required to bring their share of capital and assets
in partnership. Every partner collectively liable for the running of a business, therefore each
partner share capital, profits and liability in partnership. Funding in partnership can be easily
attracted by way of Crowdsourcing, loan in the name of the company from any financial
institution, angel investors etc.
In case of Limited Company, which is controlled and owned by the directors and run by
shareholders. Limited liability company is a hybrid form of business structure, wherein its
members are liable for limited liability. They have a different process for raising funds for the
company. Limited company issue shares and debentures for the public. It is an open invitation
anybody can purchase the share of the company and become partner of a company. It is the main
source of raising funds for the limited company.

P6 / M4 – Compare and contrast different sources of legal advice and support for dispute
resolution to make appropriate recommendation to legal solutions.
There are various activities which a company has to deal with in regular basis, a company
is under an contractual obligations with other entities. There are instances where a company does
not fulfil the contractual obligations and which leads to raise the disputes. To solve such disputes
courts available which takes much time and cost (Menon2021). To avoid such complexities,
there is another mode by which dispute can be determined between parties out side courts, such
mode of resolving dispute is known as Arbitration. It is an outside court settlement, where civil
procedure of court is not applicable, an independent arbitrator is appointed mutually by both the
parties who decides the rights and liabilities of the parties. Such decision is not appealable, if
parties are not satisfied with the decision of arbitration they may go for court proceedings
(Charrett2018).
Case Scenario1
Legal issue: whether the claim pleaded by workers against employer for the wages is justifiable
or not ?
Legal Solution: As per the case situation, the better option is to negotiate, this will satisfy both
the parties.
Justification: The process of negation begins with identifying the facts in issue between the
parties and informally discus the issues between parties. After hearing contentions of both the
parties, the negotiator decides the case on merit basis and try to satisfy both the parties with the
view to resolve dispute amicably.
Case Scenario 2
Legal issue: was it justifiable to ask for charges along with providing the phone line service
from Janet ?
Legal Solutions: considering the facts of the case, the best option is to go for mediation in order
to resolve the issue.
Justification: The process of mediation is friendly and cost effective, it saves a lot of time and
parties are given opportunity to hear and discuss the matter face to face in the direction of
mediator.
Case Scenario 3
Legal Issue: Is it legit to apply for the winging up of a company by the company's creditors ?

Legal Solutions: The matter relating to Black-Horse Company, an arbitration is the best method
for resolving disputes.
Justification: Arbitration is the most famous and common mode for resolving disputes, it is also
known as outside court Settlement. An independent arbitrator is appointed to which both the
parties are agreed to commence the proceeding solving disputes. It is more formal than
mediation and negotiation. The decision of the arbitrator is binding on the parties unlike the
decision of mediator and negotiation.
These methods of resolving the disputes outside court can be commenced at the option of the
courts, the parties to disputes have the discretion to to choose whether to go for outside
settlement or not.
M3 – Analyses the advantages and disadvantages of the formation of different types of
business organisation.
Each business organisations have their own advantages and disadvantage, the
characteristic of each business structure is different from other. Following are the merits and
demerits of the different business structure.
Advantages of Sole Proprietorship
 An easy and simple process to start business
 very less administration functions.
 Registration without fee
 owner entitled to keep all the profits.
Disadvantages
 Unlimited liability
 less tax benefit schemes
 risk of personal loss
Advantages of Partnership
 easy to setup business.
 Sharing of risk and liabilities
Disadvantages
 partners are liable for their misconduct and negligence
 the liability of company is on partners.
Advantages of Limited Company

 partners share limited liability
 rule of separate identity is applicable.
Disadvantages
 It charges high registration fee
 there is huge responsibility on partners towards administration.
CONCLUSION
From the above report, it can be concluded that, each business or corporation are
remained and performs within the purview of law of the nation. To regulate arbitrary business
activities it is very essential to impose rules and regulation on business organisation. This report
has covered all the relevant extract on the given topics related to business, corporations, types of
business structure , their funding mechanism, their merits and demerits and the legal solution by
which business disputes can be resolved amicably.

REFERENCES
Books and Journals
Camões, P.J., Tavares, A. and Teles, F., 2021. Assessing the intensity of cooperation: a study of
joint delegation of municipal functions to inter-municipal associations. Local
Government Studies, 47(4), pp.593-615.
Charrett, D., 2018. “A common law of construction contracts”–or vive la différence? 1. In The
Application of Contracts in Engineering and Construction Projects (pp. 347-356).
Informa Law from Routledge.
Di Vaio,and et.al., 2020. Artificial intelligence and business models in the sustainable
development goals perspective: A systematic literature review. Journal of Business
Research, 121, pp.283-314.
Dunoff, J.,and et.al., 2020. International Law: Norms, Actors, Process. Wolters Kluwer Law &
Business.
Huang, Y. and Hands, D., 2022. Business Thinking Through Design. In Design Thinking for
New Business Contexts (pp. 77-99). Palgrave Macmillan, Cham.
Keohane, R.O., 2019. The theory of hegemonic stability and changes in international economic
regimes, 1967–1977. In Change in the international system (pp. 131-162). Routledge.
Lerbinger, O., 2018. Corporate communication: An international and management perspective.
John Wiley & Sons.
Menon, S., 2021. Arbitration’s blade: international arbitration and the rule of law. Journal of
International Arbitration, 38(1).
Pickavance, J., 2021. Statutory adjudication in the United Kingdom: Recent
developments. Construction Arbitration and Alternative Dispute Resolution, pp.195-
216.
Ryder, E., 2019, March. Securing open justice. In Open Justice (pp. 125-142). Nomos
Verlagsgesellschaft mbH & Co. KG.
Takriti, A.R., 2020. Law and Revolution: Legitimacy and Constitutionalism After the Arab
Spring. Nimer Sultany,(Oxford, UK: Oxford University Press, 2018). Pp. 320. $80.00
cloth. ISBN: 9780198768890. International Journal of Middle East Studies, 52(3),
pp.588-590.
Taskin, L., 2019. Book review: A better way of doing business? Lessons from the John Lewis
partnership.
Watson, S.M., 2019. The corporate legal person. Journal of Corporate Law Studies, 19(1),
pp.137-166.
Wilson, J.F., Corker, C. and Lane, J. eds., 2022. Industrial Clusters: Knowledge, Innovation
Systems and Sustainability in the UK. Routledge.