Business Law: Legal System, Legislation, Business Structure and Funding

This report provides an overview of business law including the legal system, legislation, business structure, and funding. It covers topics such as the reflection of the legal system, legislation that businesses need to be aware of, different laws that businesses have to follow, and types of funding. It also includes an overview of employment, contract, and company law.

BUSINESS LAW

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Part A...........................................................................................................................................3
Reflection of the legal system......................................................................................................3
Legislation that business needs to be aware...............................................................................4
Different laws that business has to follow...................................................................................5
Business legal Structure...............................................................................................................6
Types of Funding.........................................................................................................................7
Part B...........................................................................................................................................8
Overview of employment, contract and company law.............................................................8
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Business law has been define asset of rules and regulation that is been followed by the
organization in order to run their business in effective way. It includes law such as contract,
employment, minimum wages, copyright acts. Along with this, it is important for organization
so that it can reduce the intervention of government as well NGOs as it can harm brand image.
In addition to this, present report will discuss about various business structure that is followed
by firm in order to sustain in market. Furthermore, it will give brief discussion about the
funding used by various organization so that it can invest in functional units of the company.
Lastly, it will provide legal solution to the three case studies of the business law.
MAIN BODY
Part A
Business law refers to the rules and regulation which is formed for the commercial enterprises
that solve the issues. The government of the nation along with the members of the parliament
form in order to deliver justice to the people and punish the criminal in appropriate manner. The
law which is decided by the legislation is mandatory to followed by each and every citizen of the
country. This legal system include aspects of the business which involves formation process of a
company, unions and acquisitions, stockholders right as well as property matters for example
rental office or warehouse planetary. The legal system of the United Kingdom consist of three
laws as per the region (Aikens, 2020). the UK law is consist of five principle sources which are
legislation, case law, European union law and European convention of human right. The
government play essential role in law making process but cannot form new law or imposed new
taxes without the agreement of the parliament. The members of the parliament are appointed by
the election process of the nation. The government do not have decision power along with that
the government cannot pass the law without parliament’s approval. The common law is the legal
system in which the judge deliver the decision in favour of innocent person by hearing the case.
The statutory law is the element of the law which is created by the legislature in the form of
legislation.
Reflection of the legal system
The legal system of united kingdom consist of separate law system in the UK. The law is for the
benefit of the common people and the business units in order to deliver the justification. With the

assistance of legal system, the government of the country maintain the peace in the nation and
protect the minorities against the people of the majorities by delivering right rules and regulation
in the nation. It provide proper justice to the people of the country in order to protect them from
ay from of illegal or criminal activity (Strickson and De La Iglesia 2020). For instance, if the
person conduct and sort of activity which is considered by the is illegal then the person supposed
to be victim and punishable by the law. The murder and manslaughter id considered as the crime
by the authority of the nation. If the person murder someone then the legal system will take strict
action against them in order to punish the culprit by announcing imprisonment or penalty. The
weakness of legal system like common law is that the constitution still deliver on the bases of
ancient concept in the modern era. It will consume lots of time in decision making process
because the modification required time to deliver the best decision in favour of innocent person
and punish the criminal in a proper manner. due to old precedents some time the legal system is
not able to provide justice in effective as well as efficient manner.
Legislation that business needs to be aware
There are various laws that an organization has to follow while running the business while
some of that is compulsory in nature or other can be for limited frame of time. Moreover, o
companies has to abide such laws as it will help the organization in avoiding the legal suits as it
can affect the overall brand image of the firm in negative way. Along with this, legal suits cam
create various issues for the organization as it can affect brand name in the market and firm
can lose their potential customer. Moreover, due to Covid government of UK has amended
new rules that need to be followed by firm such as following precaution related to virus.
Likewise, social distance and sanitizing the place and to lay emphasize on safety of customer
and employees (Mees-Buss, Welch and Westney, 2019). However, if any employee is not able to
follow such rules then it has to pay fine to the government. Furthermore, Laws related to
employment need to be followed by the organization such as minimum wage rate, working
hour, contract of employment need to be made by the organization. Along with this, there
should be no discrimination with the employees on the basis of cast, religion and gender
everyone should be treated with respect and dignity. In addition to this, contract between
worker and organization should include true details about the company policy and job
responsibility and each employee should have copy of contract.

Furthermore, business now days are making use of digital technology and marketing in order
to increase their sales as well as to cover large area of market. In addition to this, to protect the
data of customer and stakeholders and to safe intellectual property form hackers every business
has to follow Data Protection Act in order to safeguard data. Along with this, act define limit of
data that can be asked by the companies form their customer as well as stop company form mis
using collected data. In addition to this, business now days have to take insurance of their
employees and employer in order o to protect them with any unusal threats. However,
insurance policy helps company in covering the cost of any negligent act done by the company
(Piszcz, 2020). Along with this, business has to provide their employees with compensation
schemes after their retirement although it is not a compulsory act that need to be followed by
companies its optional. Furthermore, before stating new company inn market of UK has to
define its nature as it helps in identifying the purpose of conducting business. After defining
company has to get a particular license form government and if it is not done then business will
face legal issues and penalties.
Different laws that business has to follow
 Employment Act:
 This law is designed to protect the rights of the employees and cover almost all aspect the
employees and employer relationship. It covers laws related to areas of employment such
as contract and condition, treatment of employees, working hours and minimum wage. It
essential for organization to comply with various rules and regulation so that it can avoid
costly employment tribunal claims (Barnett, 2021). It can also affect the business directly
that can increase or decrease the growth of organization. If any employee sue company
then it can create negative image on firm as well as lose potential employees. However, if
subordinates are aware about their rights and treat them with respect will contribute in
increasing the productivity of the firm.
 Law of torts: This law mainly covers mostly civil suits and claims that arise in civil court
that area related to contractual dispute falls under tort law. The concept of this act is to
provide relief from the wrongful act and to award monetary relief as compensation for any
damage. Thus, the main motive of this law is to help victim by compensating. It mainly
includes loss such payment of medical expense or future income.

 Copyright Act 1988: This act gives the creator an exclusive right of protecting their work
and sell them at high profit (Saputra and et.al., 2020). The protection right will be granted to
creator for their original work it doesn’t have to register work to gain copyright. Moreover,
it do not govern new useful invention rather it consist of patents and trademark. It generally
last 70 years after the authors death so it doesn’t have to worry about the expiration. Along
with this, it provide business with symbol of C inside a circle that represent that it is
protected under the copyright law. It allows company to sue the people that have infringe
copyright and ask for damage. However, it is bit costly for small business as for using the
instrument of copyright it has to pay nominal fees for registration. That will contribute in
increasing the running cost of small organization
 Contract Law: It is an agreement between two parties for completing their task. This law
regulates the legal binding between contractor and acceptor. It helps in giving clarity of the
requirement that organization wants form the candidates and guarantee a standard business
procedure (Kasahun, 2020). In addition to this, it contributes in achieving organizational
goals and objectives quickly as it serves as proof in case the other party is not fulfilling
their job. However, in case of breach of contract parties has to bear loss for the service.
Moreover, in contract one party makes an offer and another person accepts its by
communicating or performing the offers term. However, business has to make a contract
with their employees and it consist of policy that organization follow.
Business legal Structure
It can be define as outline that is used by firm in order to run their organization in
effective way as well as to earn huge profit. Along with this, it is important for companies as it
helps in defining their objective and purpose of running the organization in the market.
Moreover, there are various types of business in the market that is define in details below:
 Public organization: This type of business is run by government as well as all the
administration is run by government (Bocquet, Cotterlaz-Rannard and Ferrary,2020). The
aim of this organization is welfare of the society and the products and services are made for
benefit of general public.

 Private organization: This type of company is owned by private individuals with the
motive of earning large profit. The products and services are made by the company in
order to meet the needs of customer.
 Sole proprietorship: The is type of structure is adopted by single owner in order to run
their business and to manage various activities of organization. Along with this, it is
simplest form of structure as it do not involve many business issues (Wiener, Maresch
and Breitenecker, 2020). The advantage of this business is it not very expensive as well as
it do not involve huge paper work. Along with this, disadvantage of this structure that
owner has to face all types of debts and it pay form its personnel expense. Example:
McDonalds
 Partnership: This type of business structure involves two or more partner in order to run
company as well as to achieve common organizational goals (Barnett, 2021). Along with
this, it is one of the most common adopted structure in business as it helps in covering
large area of market. Moreover, the advantage of this type of company is that all debts
and liabilities are share by the partners jointly so there is no pressure on any one. Along
with this, like sole proprietorship it do not involve lots of paper work. However, major
disadvantage of this structure is if there is any fight between partner then it will slow
down productivity of firm. In addition to this, partner are liable to pay all debts and in
some case there asset can be sold off.
 Corporation: This form of organization has existence independent of its owner. It has
power and liabilities different from those of its owners (Gavrilovic, 2020). There are two
types of structure such as C and S. C type has separate legal entity form the owner and in
S type it involve 100 shareholders. Along with this, the advantage of this structure is
there is no liability on owner to pay. Whereas disadvantage is that it is very complex and
expensive form business structure and it involves various business activities likewise
conducting meeting with shareholders.
Types of Funding
Funding is very important for the organization in order to invest in the business sector or to
improve product quality as well as performance of firm in market.
 Limited liability: This type of organization is owned by private individual with the aim of
earning huge revenue as well as to satisfy needs of customer. There are two source of

funding available for this type of business such as internal and external (Woebbeking, 2019).
The internal source involves additional issue of share capital, deposits done by director and
form member. On the other hand, external source of finance is bank finance, angel investor
and venture capital.
 Social corporation: This type of company is owned by government with the aim of
uplifting the weaker section of society and environmental development. Along with this,
the motive of such companies is not to earn profit. Such organization for funding depends
on angle investor or grant from local state and government in order to run their business.
 Corporation: This is basically known as large group of company or people authorized by
state in order to act as single entity (Whiteside, 2021). Moreover, it has separated identity
from its owner and posses same rights as corporation. Sources of funding available for this
organization is raising capital from operation, issuing equity capital or obtaining loan
through financial institution.
Part B
Overview of employment, contract and company law
 Contract: This is known as legal binding agreement between party in order to fulfil
the condition of the contract. It generally involves two parties in which one party
makes an offer and other accept the proposal (Galvin, D. J., 2019). Along with this, it
is important for business as it helps the organization to define about their policy to
their employees. Moreover, it helps the company in accomplishing organizational
goals in more quickly.
 Employment Act: This law mainly define rights and liabilities available to the
employees and employer towards each other (Sternlight, 2019). It covers the area of
employments such working hour, wage rate, safety and actions against unlawful
activities conducted by organization.
 Company law: This act define the rules and regulation that a business has to follow
while running their organization in competitive market. Moreover, it allows firm to
follow certain standard such as defining the structure and licensing company under
this act before commencing business (Sjåfjell, 2020). Along with this, it is crucial for
company as it helps in reducing threats and manage day to day functions of firm.
These cases will be resolved in the format of IRAC

CASE-1
The issue in the case is that can Gordon is liable to obtain the wages for 2017 and can he
claim for the salary which he has agreed not to accept apart from the commission for 2015
and 2016. In the case Gordon the salesman in the Orange computers Ltd accepted the
variations which was made under the contract of employment between the manager and
Gordon agreed the terms regarding the only payment of commission and not salary for the
year 2015, 2016 and 2017 as said by the manager because of the poor financial condition of
the business (Atkinson, 2020). The salesman agreed to the terms and conditions of the new
contract which was made between the manager and Gordon. As per the employment law, the
contract of employment is the written document which specifies the terms and conditions
related to the employment that involves the wages paid to the employee, working hours,
rights of employees and various other condition of the contract. In the given case the
salesman agreed to the new terms and conditions of the contract is not liable to obtain wages
for 2017 and only receive the commission. As it was observed that in the year 2016, the
company began to make profits, it is on the discretion of the manager to pay the wages for
that year. Gordon cannot claim the wages for 2017 as he agreed to the new terms of the
contract. Gordon can only receive the payment related to the commission and not the real
wages and cannot claim the wages for the year 2015 and 2016 (McGaughey, 2018). The
right only arises when the new terms and conditions are terminated or it is only on the
discretion of manager to pay the wages if they think so. Under the contract of employment,
Gordon has agreed to the new terms and conditions of the contract and hence cannot claim
wages until any alteration is made by the manager in the contract of employment.
CASE-2
In the given case Janet called the Virgin media who is internet service provider for the
installation of the internet package which included the phone line connectivity costing £35.00
per month. The issue was that the engineer breached the terms of contract that is delayed in
providing the services and did not complete the installation and it was observed that after 3
weeks the task was completed by the engineer. The party that is the Virgin media did not
perform their part on time and there was delay in performing their part. According the
contract of law, if either party does not perform its part or makes delay in performing its part
results into breach of contract by that party (Kuzmina, 2019). Here Virgin Media breached

the terms of the contract of law. On the other hand the service provider charged for the whole
package including the phone line service which was installed three weeks late. Here the
aggrieved party that is Janet is not liable to pay the full amount as there was delay in the
service. The remedy which is available with the Janet under the contract law is that the party
can terminate the contract or is liable to pay only for the internet package excluding the
amount of the phone line which was installed three weeks late. According to the contract law,
all the basic elements of a valid contract were fulfilled such as presence of the parties, offer,
acceptance and consideration (Ilobinso, 2018). There was breach of contract by one party for
which the remedies available to Janet was to terminate the contract and also it is not to end
the contract then Janet is not liable to pay the whole monthly amount including the charges of
phone line. The legal solution can be inclusion of third party where all the conditions should
be specifically proved and then decisions can be made accordingly.
CASE-3
In the case there is a Blackhorse limited company which is a security company which
provides security guards to other business. The company has 50 employees. The company
has four main customers and one of which has left the company into bad debts of worth
£100,000. The company has recovered some of its debts but there were payments that are to
be made to the creditors for the bad debts (Hunt, 2020). Failing to pay the amount one of the
creditors filed a petition for winding up of the company two weeks ago but the court consider
three week time for petition to be considered for the winding up of the company by the
creditors. According to the companies act UK, creditor can file a petition of winding up of
the company if the company fails to pay its debts. The creditors use this method when they
repeatedly want to recover the amount but the company fails to do so. Winding up is
considered as the most serious action which is taken by the creditors. There are various
options which is available in order to stop the closure of the company that is communicate
with the creditors and if the company is facing cash flow difficulties and planning to adopt
new payment terms it should be communicated to the creditors first (Repiquet, 2018). The
company should communicate that the many a times company has come out of such situation
and cleared the payments of their creditors. The company can make an agreement and can
demand some time in order to pay the debts of the company. The other option available with
the comp any is to enter into an agreement with the unpaid creditors and plan a time period

for the payment of its debts. The agreement should be accompanied by the majority of the
creditors. The winding up petition can be filed by the creditors if the company fails to pay its
debts. If court is of the opinion and after considering all the necessary facts that the company
is capable to pay its debts as agreed between the creditors and company can avoid the
winding up of the company.
CONCLUSION
From the above report it has been concluded that law is set of norms made and implement
the government to maintain peace in the society. Along with this, every business has to follow
these norms in order to sustain in the environment and to manage functional unit of
organization. Furthermore, report has summarized about employment act, contract law and
company act and it affect on the business. Moreover, it has also depicted about company
structure and its advantage and disadvantage that business has to suffer form while adopting
it. Lastly, it has summarized about the legal issues faced by the client in the case studies and
recommended them legal solution to deal with the issues.

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