Business Laws and Regulations Analysis

This assignment provides a comprehensive report on business laws, covering their origin, sources, implementation, and various statutes that regulate the functioning of businesses. It also includes a legal advice to a problem presented in the assignment, with supporting case law and references from relevant books and journals.

Business Law
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Sources of law........................................................................................................................3
P2 Role of government in law making........................................................................................4
TASK 2............................................................................................................................................5
P3 Impact of employment and contract laws on business...........................................................5
TASK 3............................................................................................................................................6
P4 Solutions regarding business problem...................................................................................6
P5 Justification legal consultancy...............................................................................................6
TASK 4............................................................................................................................................7
P6 Solution for the disputes........................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
Alix Adams Books...........................................................................................................................9
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INTRODUCTION
Business laws are the basic statues for framing of an organisation. It is essential to abide
by the rules and regulations for establishing or expanding an organisation. Business laws are
consists of various statutes such as Companies law, law of contract, employment rights, etc. In
the given scenario Business future is a consulting firm giving advice to start ups and to an
existing organisation for their expansion. Country pine is one their client and is a sole trader who
wants to expand their business. They are converting themselves into limited company and in the
course of that they are bit confuse with their decision. So they have hired BF for advising them.
This report deals with the provisions of various laws and relevant cases, providing advice
to their consultant. Certain questions has been answered such as the source of laws in United
kingdom, impact of employment and contract laws, etc.
TASK 1
P1 Sources of law
Laws are made to regulate the functioning of society. Generally, laws are generated from
the customs and usages of that particular territory. In the United Kingdom, laws are generated
from three sources, the European law, the Parliament and the court. European Laws and the
parliament are the primary source where as the courts are the secondary one. (Alix and Adams)
European laws originate in late 70s of the 20th century. It is comprise of treaties,
regulations, decision and directives. Treaties are a part of international laws, which is binding
upon two states regarding performing some activities. It was mainly use for trade and commerce,
which helps the then states to commence their business. European Laws are the parent of all
statues that has been enforced till now. It is comprise of European Union, which implements the
law made by legislature. (Bagley, C.E., 2010)
For setting up a new organisation the members has to comply with the various statutes of
the states, which has been implemented by EU. It was established under European Communities
Act 1972 and consists of council of ministers. European parliament, commission and court of
justice.
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It is evident to abide by the provisions of the business laws. For starting a business it is
essential to know the sectors of it and where the members want to enter into. There exists two
types of sector public and private. Here we are dealing with private sector.
In order to start a company the member should know what type of partnership they are
getting into. There are generally two types of partnership, Unlimited partnership and Limited
Liability Partnerships. A sole trader is an unlimited type of partnership, here the liabilities are
upon an individual, which means the debt and profits are incurred by only one person. But in
Limited Liability, the responsibilities are based according to the capital they have invested.
The client, CP, wants to expand their business, for now they are acting as a sole trader
and for the expansion they have to register themselves as limited company. In respect of such
conversion they have to abide by the procedure as mentioned in Companies Act. For starting up
an organisation it is necessary to form a memorandum of association, in which the details of
capitals and shareholders are mentioned and it is a mandatory document. Also for the functioning
of the company it is essential to form an article of association, which is comprise of the
constitution of the company and appointment of directors, their liabilities and rights etc. (Bodie,
Z., Kane, A. and Marcus, A.J., 2014)
So, for the expansion CP has to abide by the said laws and rules.
P2 Role of government in law making
A governing body is consist of the legislature, executive and the court. In the United
Kingdom there is hierarchy of crown that is the Queen is above all. But, the other legal
authorities also plays a significant role in formation of laws. There is a procedure which has to be
followed by the law makers. The laws came into existence by the process of passing a Bill. A bill
is of three type, Private, Public and Hybrid Bill.
A private bill is such in which the interest of an individual is affected unlike Public one
which affects the interest of public as whole. A hybrid bill is that type, whose nature is of public
one but it affects the interest of individuals.(DiMatteo, L.A., 2010)
In the process of making of law in UK, there exists certain steps in which a bill becomes
an Act of Parliament. The bill is first introduced in the parliament in its First Reading. The main
purpose is to let the members know what are the contents of the bill. In the Second Reading,
debate and discussion takes place which is necessary for the drawbacks of the bill. After such
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debates and discussion the proposed bill is scrutinised by the committee at Committee Stage and
a report is made from that bill at Report Stage. Then the bill is again presented in the parliament
for any amendment, in its Third Reading. After passing from the parliament it is presented before
the Queen for the Royal Assent, after getting the consent of Queen, a bill becomes an Act of
Parliament.
TASK 2
P3 Impact of employment and contract laws on business
Contract laws has direct impact on the business as it is not possible to perform any
business without it. A contract is an agreement which is enforceable by the court of law. For
starting a business with the partners it is essential to construct a contract which is binding upon
the parties and on the breach of contract the injured party will be provided with some remedies.
A contract is valid when it has been constructed according to its principles. A valid contract is
made by an offer by a party which can be to specific person or public, for that offer there must be
an acceptance which should be without any inducement. A contract is incomplete without
consideration. Also the objective of a contract must not contradict with laws and statues of state
(Fisher v Bell).
For the appointment of employees the parties must engaged into a contract of service.
There are two types of services, ''contract of service' and 'contract for service'. The employees are
provided with certain rights under Employment Rights Act,1996, such as rights against
discrimination, redundancy and dismal. It is necessary for an employee to work according to the
instruction of the employer but he is not liable of doing such act which is illegal (Morrish v
Henlys Ltd, 1973).
Here Country Pine is expanding the business and that will increase their work force and
to reduce such, they have to appoint new workers. But they are confuse regarding the profile of
appointed workers, that whether they are an employee under the company or self employed.
According to section 230 (3), of the Act 1996, a worker is an employee who has entered in to
contract of service with company. Moreover, recent case of Uber taxi, Aslam v Uber BV, it was
decided that workers are entitled for minimum wages and sick leave. So, CP should comply with
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the laws and decisions of the court in order to stay away from any legal threats by its employees.
(Eren, S.S and et. al., 2012)
TASK 3
P4 Solutions regarding business problem
Business sector is facing a rapid growth of competition. Everyday a new company is
coming into the market with great ideas. It is not only difficult for the new start ups but also for
the existing companies. New organisation has to come up with an idea so effective that it can
stand into the market of already existing companies in their areas. Also the existing one has to
face the challenges of he new start ups with better and innovative ideas.(Foss, N.J and Knudsen,
C. eds., 2013)
There are some the challenges or problems that a company faces, such as uncertainty of
future of the company, financial management, regulation of laws, competency and appointment
of creative people, upcoming technologies, service to customer, maintaining reputation, etc.
Country Pine is a sole trader and they are expanding their business, for that they have to
incorporate themselves under Companies Act. The process is long but an effective one. Being a
sole trader has its own advantage, such as there is less paperwork and the profits are earned by an
individual unlike Limited Company, Directors have to file an annual tax report, which is their
fiduciary duty. But there is a disadvantage too, as the liabilities are vested in an individual, so the
losses, debts and taxes are paid by the single person, where as in Limited Company, liabilities of
the partner are limited and the amount of tax is according to the capital they have invested.
If Country Pine is expanding their business then they have to face such challenges and
the extensive functioning of a Limited Company. But it is best for them cause it is the only way
in which they can expand and earn more profits.(Grundfest, J.A., 2010)
P5 Justification legal consultancy
The advice given to CP for converting into a Limited Company is evident because they
want to earn more profit moreover they are expanding their business. There are certain
advantages of being a Limited Company such as, taxes, a director and shareholder may choose to
incur a less amount of salary and draw most of their income in the form of dividends. A Limited
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Company is entirely a different entity from their owner, as the company is of the members and
not of an individual.
The members are not liable for any fraud that has taken place, they are liable for the
losses and debts. Being a limited one attracts more investors and consumers. There are various
classes of shares that can be issued by the company and the liabilities are according to the
amount of share they hold. So it is quite evident that in order to expand the business the client
must convert themselves into a limited company for enjoying the perks of it.(Johnson, L., 2013)
TASK 4
P6 Solution for the disputes
Business dispute cannot be avoided as it is a significant part of it. A dispute brings out the
loyalty and liability of the parties towards each other. Dispute arises when the parties do not act
according to the agreement of business. In the given scenario Country Pine is supplied timber by
a Poland party. Due to the increase in demand of timber there may arise a dispute between two.
In order to face the challenges of dispute it is necessary to resolve it before it arise.(Kinicki, A
and Kreitner, R., 2012)
There are two ways in which a dispute can be solve, either by filing a suit in the court or
by the method of Alternative Dispute Resolution. The latter method is a cheapest one. ADR is
comprise of major three methods, Arbitration, Mediation and Negotiation. The main objective of
ADR is to provide legal settlement to the disputed parties in a cheapest and time consuming way.
The best option for the resolution is Arbitration.
An arbitration is a process in which parties appoint a third person of their own known as
an arbitrator. The arbitrator act independently. An Umpire is appointed by the arbitrators who
acts impartially and his decision is binding upon all. The matter is heard by the arbitrator and a
solution to it is given to the umpire and from those solutions a better is implied on the parties. An
appeal cannot be made in the court for the award provided in arbitration until and unless the
proceeding are not done according to natural justice and prudence.
Apart from this Mediation is another method, according to it a mediator is appointed by
the parties who act as a neutral person and helps them to come upon an agreement for the said
dispute.
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Negotiation, is one of the cheapest and time consuming method. If the parties has good
understanding of their business and they have been in for a long time, so if any dispute arises in
the course of their business then it can be resolve by the method of negotiation.
Similar to mediation, Conciliation is another way to solve a dispute. In this the parties
appoint a Conciliator who provides solution to the parties, the only difference is a conciliator ,
liable for his act but also it is up to the parties to abide by it.(Ye, Q and et. al., 2011)
Country Pine is in business with the Poland supplier for a long time and their relation is
quite harmonious, so it is better to resolve the dispute by making an agreement with the method
of Negotiation. If this doesn't help then they can appoint an arbitrator, an expert in this field, to
resolve the dispute.
CONCLUSION
Business laws are one of the most significant part of any legal body. It regulates the
formation, function and commencement of business. The report covers all the areas, from the
origin and sources of laws to it implementation. Also it gives an idea of various statutes they
regulates the functioning of business. Moreover, it provide legal advice to the problem given in
the assignment. It is a complete analysis of the rules and regulation and procedure of forming a
company. Certain laws and case has also been provided for the justification of legal advice.
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REFERENCES
Alix Adams Books
Pepper v Hart (1993, HL)
Fisher v Bell (1961)
Adler v George (1964)
Smith v Hughes (1960)
Royal College of Nursing v DHSS (1981, HL)
Sweet v Parsley (1969, HL)
Books and Journals
Bagley, C.E., 2010. What's Law Got to Do With It?: Integrating Law and Strategy. American
Business Law Journal. 47(4). pp.587-639.
Bodie, Z., Kane, A. and Marcus, A.J., 2014. Investments, 10e. McGraw-Hill Education.
Crane, A and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
DiMatteo, L.A., 2010. Strategic contracting: contract law as a source of competitive advantage.
American Business Law Journal. 47(4). pp.727-794.
Eren, S.S and et. al., 2012. Caching message fragments during real-time messaging
conversations. U.S. Patent 8,255,473.
Foss, N.J and Knudsen, C. eds., 2013. Towards a competence theory of the firm (Vol. 2).
Routledge.
Grundfest, J.A., 2010. The SEC's Proposed Proxy Access Rules: Politics, Economics, and the
Law. The Business Lawyer, pp.361-394.
Johnson, L., 2013. Unsettledness Delaware Corporate Law: Business Judgment Rule, Corporate
Purpose. Del. J. Corp. L., 38, p.405.
Kinicki, A and Kreitner, R., 2012. Organizational behavior: Key concepts, skills & best
practices. McGraw-Hill Irwin.Swartz, L.B., Cole, M.T and Shelley, D.J., 2010.
Instructor satisfaction with teaching business law: Online vs. onground. International
Journal of Information and Communication Technology Education (IJICTE). 6(1),
pp.1-16.
Ye, Q and et. al., 2011. The influence of user-generated content on traveler behavior: An
empirical investigation on the effects of e-word-of-mouth to hotel online bookings.
Computers in Human Behavior. 27(2). pp.634-639.
Online
Alternative dispute resolution (ADR). 2017. Available through
<https://www.citizensadvice.org.uk/consumer/alternative-dispute-resolution/settling-
out-of-court/>.
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