Business law in the United Kingdom | Assignment

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different sources of UK law.................................................................................................1
P2. Role of government in law-making and application of common and justice law................2
TASK 2............................................................................................................................................3
P3. Using specific examples on the illustration of potential impact of company, employment
and contract law upon a business................................................................................................3
TASK 3............................................................................................................................................5
P4. Different types of business organizations that are legally formed........................................5
P5. Funding and management of the business types mentioned above......................................6
TASK 4 ...........................................................................................................................................7
P6. Different types of legal solution for resolving conflicts by using examples followed by
recommendation..........................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES ...............................................................................................................................9
.........................................................................................................................................................9

INTRODUCTION
Business law provides provisions that governs all the activities of an organization to
enable it run smoothly. Formation, management, funding, contracts, dissolution etc. all are
covered in commercial law. It is also called mercantile law which is divided into two areas viz.
Laws regulating company, partnership, bankruptcy ad agency and second being law implied on
contracts (Baden-Fuller and Mangematin, 2013). The report narrate sources of UK law, role of
government in law making, application of common and statutory law in justice courts.
Furthermore, impact of company, employment and contract law upon a business, different types
of business organizations, their funds and management. Along with this, legal solutions to
conflicts together with recommendation.
TASK 1
P1. Different sources of UK law
English legal system operates on the doctrine of judicial precedents. It has an unwritten
constitution which provides laws for the rights of citizens. The Westminster Parliament has the
supreme authority to pass a law or make amendments, if required. Further, power to repeal a Act
is also with parliament. The legal system consist of common, statutory, civil, criminal, public
and private law. It is considered as one of the complex legal systems as compared to other
countries. To obtain better knowledge about legal provisions, various sources can be used which
are mentioned in primary and secondary sources which are as follows:
Primary sources: The information in such source are contained in original form which
have not been changed in any way. These are the most reliable fresh and first hand data.
 Case law: The reports of various judicial decisions are called case law. In UK, judges
pass judgement of a case by relying and on the basis of previous decisions. These are the
prime sources which contain issues, facts and legal principles along with decree or order
so made. The doctrine of judicial precedents are applied in courts whereby the decisions
of superior courts can not be challenged by lower courts (Besley, 2015).
 Legislation: UK government has passed laws for the written portion of constitution.
These govern rights of people living in that country. The highest authority to pass, enact,
revoke and make amendments in various laws. These are superior to all other sources,
hence, can not be questioned in courts.
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Secondary sources: These are the information that been used before. Authors and
scholars use these sources to interpret further in their own piece of writing.
 Legal encyclopaedias: Hulsbury's laws of England and Wales is the authentic and
famous information source which are used for understanding various legal provisions. It
is arranged in an alphabetical manner in which one can find meaning, effective date,
provision, their applicability together with legal principles and case law.
 Parliamentary publications: The debates held between members of House of Lords and
house of commons are presented in such publication (Chen-Wishart, 2012). Their
speeches usually highlight major changes and implementation of rules etc. which can be taken
into account.
 Non-parliamentary publication: These are the reports and consultation papers from
various government department and agencies. One can access these from official site of
government.
 Law commission: It is an independent body constituted by government in the year 1965
to oversee existing laws in UK and make recommendation about modifications in the
needed areas. The committee consult with wider public and other interested parties and
experts according to area of law. The report is then complied and presented to Lord
Chancellor.
 Law journals: It contains huge amount of information which may or may not be
specific. The arguments of various key leaders, and ministers are its base. Further, these
are helpful for practitioners to update their knowledge of law.
P2. Role of government in law-making and application of common and justice law
The UK government has been assigned some responsibilities which are important in law
making process. The policies, plans and laws should be enacted in a way to protect citizens. Its
role is divided into three branches viz. Executive, legislative and judiciary areas. Each role is
important has their own authority to act. A detailed explanation of these role have been discussed
below: Executive role: This branch is responsible for administrating the day to day work of
state. It make and enforce the law within the state for maintaining law and order
(Clarkson, Miller and Cross, 2014). Further, they have the authority to pass executive
orders or decrees. The members that executive branch consist are Queen, Prime minister,
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defence minister and many other ministers. The laws passed by legislative body are
enforced by under this role.
 Legislative role: The government formulate policies and laws that are necessary for to
govern a country. It includes both the houses of parliament viz. House of commons and
House of Lords. The primary responsibility is to create laws or amend existing laws.
Also, there is a specific process through which a bill is passed which becomes act on
receiving the royal assent. Also, it a great role to play in reversing or overriding
president's veto if majority of approvals of both houses have been obtained (Clough and
et. al., 2015). Judiciary role: This role is about monitoring and review the existing laws to assess the
level of legal provisions being abide by citizens of UK. The government from various
courts operating at higher and lower level. These are important to punish the one who do
not follow legislations. The courts conduct sessions and hearing on case laws so that
appropriate decisions can be passed which will form base for deciding future case law.
Application of common and statutory laws to justice courts
Common law refers to the judge made law through courts. It is also known as case
precedent. No new statue is developed for applying in a case. The decisions that have been
passed forms the basis for future lawsuit, provided, situation must be similar. The decisions
made by inferior courts follow judgements of higher courts. It can be modified easily through
statutory law.
Statutory law is a written law enacted by legislature body or through a single legislature
in extreme and special cases. It is completely opposite to common law. These are formed with an
objective to be imposed throughout UK. These have already been enacted and need to applied in
a specific case. These are actually the acts that should be complied with. It can be modified only
by passing as new statue (Emir, 2018).
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TASK 2
P3. Using specific examples on the illustration of potential impact of company, employment and
contract law upon a business
A business entity should conduct business within legal boundaries by following
provisions of legislation that are applicable on it. Further, it provide a legal base on which any
breach or contravention can be challenged and legal remedy can be sought. The key legislation
that can be impact the various types of organizations are as follows:
 Company law: Companies in UK must follow Companies Act, 2006 which governs
formation, activities, appointment and removal of directors, remuneration of key people,
share capital, debenture, dissolution and many more (Frank and Bix, 2017). No
corporation can be formed without complying with this Act. Further, it a separate legal
entity that exist in the eyes of law. Furthermore, the role, duties and responsibilities of
directors and shareholders have also been provided. For example, company has
fraudulently raised funds from investors. In such case, the company will be wound up and
dissolved. A company operating by complying with all the provisions help in avoiding
legal consequences which in turn saves a company from huge financial loss.
 Employment law: The laws are for protecting employees from any kind of
discrimination and unfair treatment. Workforce are the key stakeholder because of them
an organization accomplish their goals and objectives, hence, it is important to provide a
safe and healthy working environment and conditions. Employment Act, 2002 is
applicable on all the business entity. It governs minimum payment of salary, paid leaves,
working hours, incentives, dismissal, etc. for example, an employee is being harassed by
his manager, then he can apply to court by stating facts and issues along with relevant
evidence to seek legal action against the manager. An employee prefer to work in an
entity that abide the Employment Act, 2002 in true spirit and letter (Freedland and et. al.,
2016).
 Contract law: There is no specific act for governing contracts made in organizations. A
contract is an agreement in the form of offer which is accepted by other party. Further, it
involves valuable consideration and enforceability by law. A seller and buyer enters into
a contract for further business transactions. There are specific terms and conditions that
are put by both the parties for timely completion. In UK, all the contracts are governed
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through Sale and Supply of Goods Act, 1994. for example, two parties have entered into
a contract for supplying raw material on credit. The buyer failed to make the payment
within time mentioned in contract. The seller can apply for a lawsuit in the court for a
specific legal action to make him bound to pay the amount along with interest.
TASK 3
P4. Different types of business organizations that are legally formed
An individual can carry business activities by forming any of the types that are available
and suitable by looking after the pros and cons of each of forms. The type has a huge influence
on the working of a business. There are many types of business entity some of them have been
discussed hereunder:
 Company: It is the most preferred business type due to its attractive features. It is an
artificial person created in the eyes of law. It has separate legal identity from its members
along with perpetual succession (Grenig, 2014). Furthermore, it has right to sue or be
sued and buy properties distinct from its shareholders. The company can be wound only
by laws and no person has the capacity to dissolve it. It is usually limited by shares or
guarantee and in some case, can be unlimited. The shareholders have limited liability up
to the unpaid nominal amount on the shares held by them. Every company is required to
be registered.
 Sole proprietorship: It is an entity formed and operated by a single person, who is know
as sole trader or sole proprietor. It is very easy top form, also, the set up cost is less.
There is no legal entity also, no requirement of registering the business. Owner has the
absolute authority and decision making power. The profits and losses are not shared with
any other member. Further, a business at small level generally form this business.
 Partnership: It is an association of two or more persons formed for a lawful purpose
with a view to make profit. Partners execute a partnership deed in which all terms are
mentioned along with profit share ratio. However, some deeds may not have this ratio in
such scenario the losses and profits have to be divided equally. The partners are held
liable jointly and severally for the unpaid debts and other liabilities of the firm (Newmark
and Hill, 2014.). However, creditors do not have right to ask the partners to pay unpaid
debts. It is easy to create and dissolve. There are more fund raising options are available
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as compared to sole proprietorship. The decision making powers are with all the partners
and it is compulsory to have consent of each such partners to make decisions or to enter
into a contract.
 Limited Liability Partnership (LLP): It is an association of persons in which some or
all partners have limited liabilities. It is a hybrid form of partnership and company. Each
partner is liable for their own act and nothing can make them liable for the acts of other
partner. Some partners may have limited liabilities just like shareholders have in
companies. The management is done by the partners directly. There is no dilution in the
decision making power. This form is suitable for forming LLP by professionals like
company secretaries, advocates etc. It is easy to form and the set up cost is not much.
Along with this,. The taxation system is different as compared to corporations (Nolan-
Haley, 2012).
P5. Funding and management of the business types mentioned above
Funds are necessary to continue business activities and management is vital for effective
implementation of various policies and procedures. Every organization needs financial resources
and efficient people to control and manage the transactions, contracts and all dealings within an
organization. A detail description of funding and management of different types of entities have
been mentioned below:
 Company: A company is a registered entity which has separate identity from its
members. It is artificial person which is a creation of laws, hence, it does not have brains
or hands to apply its own mind and do work. Therefore, it appoints some key people
known as directors who have the responsibilities to manage the whole company. The
directors also acts its trustees for the money and properties. Furthermore, it has wider
options to raise capital in order to infuse financial resources for carrying out its activities.
However, share capital and debentures are two preferred options through which funds are
gathered (Raz, 2013). Apart from this, bank loans, retained earnings, borrowings,
personal savings etc.
 Sole proprietorship: It is managed and operated by a single person who is called sole
trader. The decisions and other powers are with the sole proprietor only. Usually, owner
hire his family members or other people to help him in managing the business. The
contracts are formed by the owner, together with this, profits and loss are not shared.
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Investors do not show interest in investing in sole proprietorship because it does not have
a legal identity. Hence, the limited options that are available to it are own capital and
bank loan.
 Partnership: A partnership firm have partners who manage and control the activities.
Each partner can be held liable jointly and severally for the negligence or other
misconduct. Also, the liabilities of firm should be paid by its partners. The firm has
greater options to raise capital as compared to sole proprietorship. These are
crowdfunding, retained earnings, and owner's capital (Sheikh, 2013).
 LLP: It is managed by its partners but they have limited liabilities. The decision making
power is with every partner, however, a decision is considered final only when it has
received its approval. It has wider options to raise funds such as bank loan, venture
capital, personal savings, retained earnings etc.
TASK 4
P6. Different types of legal solution for resolving conflicts by using examples followed by
recommendation
1. Negotiation: It is a voluntary method of resolving disputes and conflicts whereby a
communication is held between parties to dispute. The parties put their arguments
forward in order to reach a conclusion. It may solve existing or fresh conflict. It the first
preferred choice for dispute resolution. Every negotiation is different and unique in terms
of subject matter, number of participants and process undertaken. There are many case in
which negotiation can provide an effective way to resolve conflicts such as mortgage
foreclosure settlement, debt problems, neglected acts etc. In companies, it can be applied
to negotiate with creditors, in case of merger or amalgamation (Yingxiu, 2014).
2. Alternate dispute resolution (ADR): It is an amicable process of settling disputes
without filing litigation. It is an out of the court settlement which is inexpensive and
speedy process. It has various methods such as mediation, arbitration and many more.
Whereby, arbitration is an amicable method of resolving conflicts under which an
arbitrator is appointed to her both parties and examine evidence made available by them.
He applies best of his knowledge to judge them and make appropriate judgement.
Furthermore, he is an independent person chosen by parties to dispute, thus, his
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judgement can be trusted. The arbitration award so passed is final and binding on the
parties. On the other hand, in mediation a third common party is hire to assist two or
more participants in conflict resolution for reaching a common goal. It a very easy,
simple and cost-effective method where mediator tries to help with communication in so
that the matter can be resolved in an amicable manner. Further, various negotiation
techniques are applied and parties have absolute control. However, the decision made by
mediator is not of binding nature.
3. Litigation: It is a method in which conflicts are resolved in the courts. The process
involves initiation of a case to pass an order or to enforce a claim. There are two parties
viz. Petitioner and defendant (Zander, 2015). Litigation is considered the last option and
used in extreme case such as murder, rape etc. Further, appeals are also included in this,
whereby an aggrieved party may file an appeal in tribunal against the decree so passed. It
is a lengthy and expensive method. For example, a person has been charged fro stabbing
the neck of his friend with knife. This case can not be resolved with ADR or negotiation.
A proper punishment should be provided to the culprit.
The appropriate method is ADR which can be applied in every case for settling the case in an
inexpensive manner. Basically, arbitration is used fro deciding the case in an expeditious way.
CONCLUSION
From the above report, it has been concluded that legal system consist of various
legislations that must be followed by individual as well as organizations. Every Act has certain
motive for which it has been enacted. An entity is required to abide by applicable legislation so
that no breach or contravention in the provisions can be made. Furthermore, there are various
types of business organization which can be selected for starting a business, however, their
advantages and disadvantages are necessary to considered. Along with this, the legal methods for
resolving conflicts should be analysed and applied according to the nature of dispute.
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REFERENCES
Books and Journals:
Baden-Fuller, C. and Mangematin, V., 2013. Business models: A challenging agenda. Strategic
Organization. 11(4). pp.418-427.
Besley, T., 2015. Law, regulation, and the business climate: The nature and influence of the
World Bank Doing Business project. Journal of Economic Perspectives. 29(3). pp.99-
120.
Chen-Wishart, M., 2012. Contract law. Oxford University Press.
Clarkson, K., Miller, R. and Cross, F., 2014. Business Law: Texts and Cases. Nelson Education.
Clough and et. al., 2015. Construction contracting: A practical guide to company management.
John Wiley & Sons.
Emir, A., 2018. Selwyn's law of employment. Oxford University Press.
Frank, J. and Bix, B.H., 2017. Law and the modern mind. Routledge.
Freedland and et. al., 2016. The contract of employment. Oxford University Press.
Grenig, J.E., 2014. After the Arbitration Award: Not Always Final and Binding. Marq. Sports L.
Rev. 25. p.65.
Newmark, C. and Hill, R., 2014. Can a mediated settlement become an enforceable arbitration
award?. Arbitration International. 16(1). pp.81-88.
Nolan-Haley, J., 2012. Mediation: The new arbitration. Harv. Negot. L. Rev. 17. p.61.
Raz, J., 2013. Legal positivism and the sources of law. Arguing About Law, 117.
Sheikh, S., 2013. A guide to the Companies Act 2006. Routledge-Cavendish.
Yingxiu, L., 2014. Judicial Solution to Conflicts of Rights [J]. Chinese Journal of Law, 2.
Zander, M., 2015. The law-making process. Bloomsbury Publishing.
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