Table of Contents INTRODUCTION...........................................................................................................................1 SECTION 1: Nature of legal systems and legislations impacting businesses.................................1 TASK 1............................................................................................................................................1 Explain the meaning of statement 'Parliament is Sovereign'..................................................1 Discuss the different sources of UK laws...............................................................................2 Role of government in law making process and how statutory and common law are applied in justice court............................................................................................................................2 Illustrate how company, employment and contract law has a potential impact upon business..4 TASK 2...........................................................................................................................................5 Nature and formation of different types of business,.............................................................5 Evaluate the differences between unincorporated and incorporated business that how they are managed and funded...............................................................................................................6 Advantage and disadvantage of a partnership and that of a company...................................7 SECTION 2: Legal solutions to business problems........................................................................8 CASE 1............................................................................................................................................8 Case Scenario.........................................................................................................................8 CASE 2............................................................................................................................................9 Case Scenario.........................................................................................................................9 CONCLUSION..............................................................................................................................11 REFERENCES..............................................................................................................................12
INTRODUCTION The law which has the responsibility to manage every single work related business organisation is known as business law. There is a huge importance of business law as it is the main source of taking any of the business decision. In any of the business organisation, business law helps to generate the better revenue for the company. Broad area has been covered in it due to which it can be said that it is one of the lengthiest law. The main purpose of preparing this report is just enhance the knowledge about business law and to give relevant suggestion that how any of the case studies can be solved by taking the best alternative decisions. The file will cover some of the important topic such as sources of law, role of governing bodies, legal procedure to form a business organisation and recommendation will also betheir according to case studies which will help to understand this law in detail. SECTION 1: Nature of legal systems and legislations impacting businesses TASK 1 Explain the meaning of statement 'Parliament is Sovereign'. Parliament is defined as legislative body of the country which does have the power to commence any of the laws within the country. In case of UK parliament, it is generally discussed that they are among one of the most powerful body which is working for the welfare of general public so it must be understood clearly that no one will have the option to take any of the decisionwithoutobtainingtheirpermission.Theirdecisionsarenotpremiss-abletobe questioned at any level and must be considered. They even have the power to end any of the enforced law with immediate effect (Allen and Kraakman, 2016). The speech of Queen is being delivered every year to address the parliament House (What happens during the State Opening, 2019). This speech is necessary to be delivered each year because after delivering the speech the session of parliament get started. The main benefit of this speech is that it helps to prepare the agenda for every political parties in this particular speech every things are mention in detail that what are the topics that should be focused more through out the year. 1
Discuss the different sources of UK laws In present scenario, UK cover the large geographical area due to which it can be said that it is not easy for single government to commence any of the law which can cover the problem of each and every area. Just to make every thing much easier they have delegated the power and roles to different agencies so that any of the area will not be weak. The sources of UK who have the power to commence any of the law in the area of UK are: Statutory law:The focus of this source is to commence only those law which can benefit the public for taking any sort of decision in daily basis life. This is the source which takes the responsibility that unethical and illegal work will not take place within the premisses of UK. Here, statutory laws are being commenced which has the crucial role for any of the organisation for taking any of the decision. Common Law:The laws and regulation which are based on past cases and judgement by different court is known as common law. This types of laws can be easily modified at any period of time if House of Parliament think so. This is one of the source which is effective and result generating.The legal precedent is mainly established here which is beneficial for any of the authorised body to declare their decision at any period of time. European Union Law:Whenever there will be the discussion about commencing maximum number of law in UK there will be only one name i.e., European Union Law because they are the who have enforced half of Act which is being followed in UK premisses. They mainly forms those policies and laws which are connected with social and economic policies. They even covers the rules and regulation related to international laws. European Convention on Human Right:It is also the important sources which helps UK in several ways.This is the source which tells that how security should be provided. This is source what clearly writes that what an individual can do and what are the things which is prohibited for them. These are the sources in UK who have the power to commence to commence any of the law so that peace and silence can be maintained in best possible manner.For managing business, it is necessary that company must comply with European Union law and Statutory lawas they prepare the guidelines for business organisation through which business activities are being managed. 2
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Role of government in law making process and how statutory and common law are applied in justice court. The role of government is huge as they are the one who decides that which laws and policies should be enforced and which should not be enforced. But, if they decide to commence any of the law they need to make sure that there is no default and for that procedure has been formed which is needed to be formed. The detail procedure of commencing the law is explained below where every steps have regulation which is needed to be considered. First Reading:The stage where name of the proposed bill is to given is known as first reading. In this stage, members give the title as per the terms and condition written in it. Second Reading:Even this stage is not much and more different then first reading but still it is necessary that proper bill must be read by the member that what are the points which are written in it and how favourable is it. This stage gives the guidelines to committee stage that what are the points which might create trouble. Committee stage:This is the stage where it is needed to be checked that whether all of the points are suitable or not and if not then what are those points which is needed to be changed. They are required to do voting to check that is is really important to change the points which are mentioned in the bill. Then they pass the bill to next stage. Report Stage:This is the stage which is needed to work as per the guidelines provided by the committee stage because they are needed to just change all of those points which might create issues in future (Ambler, Witzel and Xi, 2016). The main thing which is found in this stage is that member do get time for changing so that similar form of issues cannot be found in future. Even it is the backbone of this complete process. Third Reading:This is the reading where member are needed tocastthe vote to find that whether bill is really helpful or not and if not they send itback for couple of changes. In short, one final chance is being given to the member for checking the billing as it is needed to be send in House of Lords after that (Allen, Kraakman and Subramanian, 2016). House of Lords:Same procedure is needed to be followed in House of Lords as they are needed to check every points in detail as they are the one who needed to take final decision on any of the points. Peers member have the responsibility to check each and every points. 3
Royal Assent:When approval is obtained from each and every steps, it is necessary that Queens approval should be taken so that bill can be converted to Act.This is one of the step which need to be followed as per the guidelines of Royal Assent Act, 1961. How statutory and common law are applied in justice court. Statutory law:This is the segment of laws and policies which do passes almost all of the rules and regulations. It is necessary that all of those laws and regulation must be followed and whenever they fails to do then legal action is being taken by the justice court. Here, if case is filed within the justice court, the judges have to find the situation that whether any of the laws and remedies has been explained or not. If it found that laws and regulations has been explained then judges do declare their decisions on that basis and if not they take the help of common law. In addition, justice court has to find the actual default performed and according to that they are needed to find laws and penalties from statutory law to declare decision. This is how statutory laws are applied within justice court. Common law:This is the department of commencing law which does play the important role in any of the justice court. There are number of situation where judges are unable to find any of the laws and regulations related to any of the particular topic and in that situation judges have to refer the case laws.Here, judges of justice court do get the power to declare any of the legal decisions own their own choice. This is how both common law and statutory law is being applied within justice court. M1 Evaluate the effectiveness of the legal system in terms ofrecent reforms and development. The Legal system of UK has been trying to commence suitable laws and regulations so that better results can be obtained. Law which are being commenced have some purpose but still it is necessary to amend some of the laws and acts because they are too and everyday new methods are being formed due to which it becomes important to amend. There are even some of the laws and regulations which are well defined which makes legal system more reliable and helpful for business organisation. Illustrate how company, employment and contract law has a potential impact upon business. Laws can be of different types but the main thing which is needed to be consider is that what are effecting in any of the field. It is said in any of the business company, contract and employment has the highest effect on any of the business organisation as it sometimes has the 4
positive and sometimes it does have the negative impact. The detail information about all of this laws and regulation has been mention below with its major impact on business organisation. Contract law:This is one of the law which has a huge importance in any of the business organisation because it tells that how company need to enter into any of the contract and what can be the major benefits. Also, it tells that with whom company is not allowed to enter into the contract. The positive impact of contract law is that forces the organisation to accomplished the every single things as per the deed which has been drafted at the time of starting the work. Whenever organisation enters into the contract they must need to fulfil all of the terms and condition which might impose number of penalties on defaulter company which means contract law does have the positive impact.For example: If TESLA enters into the contract with BMW that they will not sell their any of the vehicle in the premisses but still they does exactly against the law term and condition of agreements which means company is breaching the contact and they can be penalised in this situation. Company law:The most important law for any of the business organisation is company law because it is the one which tells how business is needed to be operated. The positive side of company law is that business decision can be easily taken with its help. Whereas, it do have the negative side under its sections suchas conducting number of meeting in a year, appointment and removal of directors, forming the legal paper i.e., Memorandum of Associationwhich clearly says that company is not allow take any of the shortcuts to save money which means the proceeding of company is costly and prolonged.For example: After the commencement of business organisation, it is necessary for the director of TESLA to conduct meetings every year for discussion that how company is needed to work and what are those work which can help TESLA and whole of this procedure is lengthy and costly too. Employment law:The law which has the crucial role in any of the organisation is employment law because it has been commence for the welfare of employer and employee's both. It is mandatory to be followed by every association. There are number of positive impact of employment law in any of the organisation. The main positive of employment law is that it have given the guidelines to every organisation that what type of safety and security equipments should be given to any of the employees which helps develop positive mindset among the employee's.Some of the laws which do comes under employment law and must be must be followed by the company is Employment Wages Act 1998, Equality Act, 2010 and many more. 5
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For example: TESLE is needed to make sure that they are given equal opportunity of every employees who are working within the company and if in any of the situation they fails to do so then they can be penalised. This procedures is expensive too which reduces profitability. M-2. Difference between three categories mention below of their impact on business. Legislation:It is a strength of a organisation as it gives legal support to that how they need to work. It makes clear that what an organisation need to do and what is ethical and what is not. It will tell that what are the rights and responsibilities which has been delegated to organisation. Regulation:It is the rules and regulations of a company which they are need to follow and it is mandatory to be followed by everyone in an organisation. It is helpful for both workers and firm. Standard:It is basically understood as maintaining the laws and regulations. Standards simply says that organisation are not allowed to work unethical or against the law. In short, standards to take suitable decision forbusiness organisation and creates opportunity to perform better within the market. TASK 2 Nature and formation of different types of business, As Jane, Penny and Marie wants to expand its business activities, it is necessary for them to deal with various issues and problem because it is never an easy task to commence any of the type of business organisation. First of all, it is important that they must understand that how man types of organisation are there any how they need to form the company. Sole Proprietorship:The business organisation which is being managed by single person is known as sole proprietorship.The work load on this form of organisation is almost nil because there is no requirement anylegal terms and condition which do requires in other form of business organisation. This types of organisation are always helpful forindividualbecause they get the chance to take their decisions of own.To setup the sole proprietorship firm, it is necessary that agreements should be prepared and that must be submitted to Companies Registration office. Partnership:Whenever two or more then two number ofpeople thinks that they should come together as they have the common objective then they have the option to commence 6
partnership firm. This is one of the most successful form of business at current scenario if various people are their with common objectives. The legal requirement in partnership is that limit should not exceed of the total number of partners. The legal procedure of commencing any of the partnership firm is that deed is needed to be formed and then it is necessary that partners should should decide that who will take the responsibility of a company and after that all of the documents should be submitted to Companies House (Bayern, 2016). Joint Venture:This type of companies are generally of combination of number of organisation where they set the common objective that how they achieve the targets in short period of time. This is one of those organisation which are formed for shorter period as well as longer period of time too. The process to form joint venture is explained below: Name should be decided with address. Authorised person should be appointed who will takethe responsibility to handle all of the work of a company. Deed is also required to prepare that who is investing what amount of capital in the company. Detail information should be mentioned that what are those work which company will conduct. All of this legal documents is required to be submitted in Companies House. Corporation:This is the business organisation which has the maximum number of responsibility that they must do. This form of business has to work at greater platform. Here, number of work and formalities are needed to be done so that all of the work can be managed in a systematic manner. The proper team is required to be formed who can take the responsibility that when to take any of the decisions so that profit can be earned. The problem which is being faced in this types of organisation is that authorised persons has to follow a long process for taking any of the decisions. The detail procedure of forming any of the corporation is: Here, it is required to select the name of a company. Requirement of first director and first shareholder is also their who can take the business decision. SIC number is also required. Memorandum of Association and Article of Association is must. 7
Once all of this criteria is completed, it is necessary that documents should be handed to Companies House. Evaluate the differences between unincorporated and incorporated business that how they are managed and funded. BasisUnincorporatedIncorporated DefinitionThe business organisation which has toperformanyofthebusiness activity at a smaller ground is known asunincorporatedbusiness organisation. This types of company is one of the most popularformofbusinessorganisation where it is necessary to understand that companymustberegisteredunder Companies Act, 2006. ManagedThe work load is very important in anyofthecompanyforthatis necessarytounderstandthatwho will manage its all of the activities. Incaseofunincorporated organisation the person who invest their money in it have to manage all of the task. Theworkloadinincorporated organisation is more compared to other form of company. So team is needed in it and for that Key Managerial Personnel playsthecrucialrole.Evenboardof director have to also manage every single work (James, 2017). FundedTheyhaveverylimitedresources available with them when it comes collectthefund.Someofthe available source are: Credit Card Bank Loans Personal Assets etc. There are number of sources available when incorporated organisation have to manage the fund and they are: Issuing share with in the security market. Loanfromprivateand government banks. Peertopeerlendingisalso possible etc. 8
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Advantage and disadvantage of a partnership and that of a company. There are number of advantages and disadvantages of company over partnership firm and they are discussed below: Advantages The liability of the member of company is always secured and limited but it is necessary for the partnership firm that their member must clear all of the debt which they have incurred (Lee, 2017).If changes are needed to be done in plans and policies then there is no requirement to prepare new deed in company but in case of partnership it is necessary. Disadvantage Legal formalities are found excessive in companies as compared to partnership firm. Company have to conduct number of meetings but partnership firm doesn't requires it. M3 Advantage & disadvantage of forming different business organisation Sole Proprietorship:There is a option to take any of the decision in shorter period of time. Here, firm does not get the opportunity to perform business at large scale just because of legality. Partnership:Roles and responsibilities are always easy to delegate in partnership firm. But this types of company doesn't get the right to sue and be sued on the name of organisation. Joint Venture:Goals and target can be easily accomplished in it but setting up of joint venture is an lengthy process. Corporation:Performing business at greater scale is easy in corporation but decision making process are lengthy and expensive too. SECTION 2: Legal solutions to business problems CASE 1 Case Scenario There was the case which took place between Champion Ltd and its creditors. It was found that company was unable pay its debt amount due to some of the unwanted reasons. Now, their credits threatening to to them that if they will not wind up the company then they will file the winding up petition within the court. 9
Winding Up:It is defined as the stage where it can be understood that company is struggling from number of problem due to which it is not easy for them to perform any of the business activities in smoother way. It is almost that stage from which it never becomes easy to recover and perform well within the market. There are different ways of winding up of company which is explained below:Compulsory Winding Up:Here, creditors are required to file the petition in the court that company is not paying the amount of loan which they have then from them. They have to make sure that debt amount is not less then £750(What is Compulsory Liquidation, 2018).Then, it is the responsibility of member of a company that must give the justification that why court should not pass the order of winding up and if they fails to do so then decision is declared against the organisation.Here, most crucial role is played by appointed liquidator who have to prepare the detail of available assets and after that he has to sell then in appropriate amount. Once it is sold it is necessary that payment should be done of creditors and if amount remains then it isneeded to b distributed among shareholders.Voluntary Winding Up:This is the process of winding up in which it is necessary to be understood that company should liquidate their company of own. The most important thing in this is that directors have to take the decision and conduct the meeting to inform all of the member that company is not able to perform well and because of that they must wind it up to clear the debt amount (Beatty, Samuelson and Abril, 2018).Here, resolution need to be passed by the member of company which should not be less then 3/4thof total member in the organisation.(Cameron, 2017). Once, it is obtained it is necessary that liquidator must be appointed and after that news must be published in newspaper and companies official websitewhere they update each and every informations. Negotiation:This is one ofthe process through which disputes can be easily solved in future period of time. The most important thing which necessary to understand here is that disputed party themselves have to sort it out. This is one of the effective way for solving any of the disputes. Recommendation:ItisrecommandedthatChampionLtdcantakethehelpof negotiationmethodtosolvethedisputebecausenegotiationprocesswillalsoprovide opportunity to company that they might perform again in the market. Here, company will get the 10
chance to revive and to perform once again in decent manner.Secondly, this matter can be closed without involving court procedure which is one of the great sign for both creditors and Champion Ltd because that takes unnecessary time. As company have performed default similar default for number of times, so if they are unable to clear their problem without applying winding up process then they should wind up their company through voluntary winding up process. A that will be easy and fast as compared to compulsory winding up. CASE 2 Case Scenario In the following case, Mr Anderson is facing critical situation with leaving the current employment as he is provided with good package than that of compared with working with the existing company. Mr Anderson has made his contract of employment with the existing organisation of not leaving the organisation before the period of 12 months. But as Mr Anderson is also having another option of good package which Beta Company is providing to him. So the situation is one side the contract of employment says not to leave the organisation before the period of 12 months but on the other side, an individual works at the place where he gets more pay and good working conditions. Injunction:It is the situation where court do suggest that person should not do any of those task which might create unnecessary problem for any of the person or organisation because there are some of the important information that should not be shared with anyone. In the above given case, Mr. Anderson is trying to breach the injunction. Similar Case Case:Sunrise Broker LLP v Rodgers Judgement:The high court of UK declared that Rodgers will be counted as a employee of Sunrise Broker LLP till the date of contract. It is his decision whether he is willing to come or not with in the premisses of company but he will not be allowed to join any other company till that period of time as another company is rivalry (Sunrise Brokers LLP v Rodgers – High Court enforces restrictive covenants against broker, 2014) This is the case which can be solved with the help ofAlternative Dispute Resolution.It is defined as the process which is beneficial for solving any of the legal problem. Number of 11
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methods have been given here which do help any of the disputed party in any of the situation. Various methods are: Mediation:This is most preferable method whenever issues are simple in nature and can be easily solved without going to the court. The thing which is important to consider over here is that parties have to explain in detail about the problem which they are facing, then they give proper suggestions. Conciliation:It is the process of solving the problem which does arises between the parties. This is helpful for solving the problem whenever there is miscommunication between the parties. The target in it to achieve is that how maximum number of terms can be met of contract paper. Arbitration:The process where permission is given by the authorised department of government that person whenever takes the help of this method they are not allowed to take the help of other method if they are not satisfied with the decision. Dispute parties must be agreed before going under arbitration process. Recommendation:To clear out the problem between both the parties it will be necessary for them to take the advices of arbitration method which do declare its decision without being biased at any period of time.It is suggested to M . Anderson & Amber Ltd because this procedure will save their time and secondly matter will be sorted out in quick succession as court procedure are never an easy thing for any one. Another, decision will also be legal binding which means both the parties must have to agree on terms and condition of decision. M-4. Compare different support of resolving disputes. Arbitration: The decisions which are being given by appointed person is always neutral and they are not just for the purpose of suggestion because they need to be followed. Conciliation: Appointed person in has to listen the problem of both parties and what they need in this situation and according to that they are needed to help their client. Mediation: In this particular stage, suggestions are being given that how problems are needed to be solved so that both parties can get benefited. 12
CONCLUSION From the above assignment prepared it has been concluded that there are different sources of acquisition of the laws followed by the citizens of UK. In addition to this, it is also concluded that organisations, employment and contract impacts upon the business depending upon the nature of business, job and contract of employment of the organisation. Further the conclusion has been drawn about the different types of businesses which are important and their formation also depends upon the nature of business which is carried over by the individuals.Lastly,the conclusion has been drawn about the relation in between the employer and employee which should be based on the principle of utmost good faith and organisations should also follow the proper procedures of their liquidation so that the interest of no party could remain in bad. 13
REFERENCES Online WhathappensduringtheStateOpening.2019.[Online].AvailableThrough: <https://www.royal.uk/state-opening-parliament/> WhatisCompulsoryLiquidation.2018.[Online].AvailableThrough: <https://www.companydebt.com/liquidation/compulsory-liquidation/> Sunrise Brokers LLP v Rodgers – High Court enforces restrictive covenants against broker. 2014.[Online] Available Through: <https://www.redmans.co.uk/sunrise-brokers-llp-v- rodgers-high-court-enforces-restrictive-covenants-against-broker/> 14