Solved Business Law Assignment (Doc)

BUSINESS LAW

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1- (LO1 & LO2)...................................................................................................................3
a.) Discussion on meaning of the statement 'Parliament is sovereign' with various sources of
UK laws..................................................................................................................................3
b.) Explaining role of government in the process of law making and applicability of statutory
and common law in the court of justice..................................................................................5
c.) Explanation on company, employment and contract law which has potential impact upon
business with the difference between legislation, regulations and standards.........................7
TASK 2 (LO3).................................................................................................................................9
Nature and formation of different types of business..............................................................9
Difference between incorporated and unincorporated business with references to their
management and funded.......................................................................................................10
Advantages and disadvantages of partnership and company...............................................11
SECTION 2 (LO4)...........................................................................................................................1
CASE 1...................................................................................................................................1
CASE 2...................................................................................................................................2
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
In order to develop better decision and better understanding for operating effective
functions, it is necessary for owners, manager and for other professionals to have basic
knowledge relates to business law (Beatty, Samuelson and Abril, 2018). Thus, this law is also
known as merchandise or commercial law. Present report is developed to provide better
understanding and meaning of the statement “parliament is sovereign” where role of government
in law making process will be explained. Further, information will also be discussed on statutory
and common law which applied in the justice court. Moreover, company, employment and
contract law is also been to explained in this report.
Later, in this report different types of business with difference between unincorporated
and incorporated business will also be discussed with its advantages and disadvantages. Lastly,
legal solutions which relates to business problem will also be provided with appropriate
recommendations.
TASK 1- (LO1 & LO2)
a.) Discussion on meaning of the statement 'Parliament is sovereign' with various sources of UK
laws
Sovereignty is the term which relates to full right and power of governing body over
itself where outsiders will not able to interfere such quality of the legislation. The term has been

considered as substantive which is designed to establish supreme authority. Parliament
sovereignty is a constitution principle in UK which makes them supremely legal authority who is
able to create or end any type of law (Allen and Kraakman, 2016). This is the statement which
states that court will not able to overrule legislation where future parliament cannot be able to
change.
In UK, parliament is said to be a sovereignty because it mainly deals with various types
of principles which makes it a complicated that is entirely a grasped concept. People generally
refers that UK has unwritten constitution which is not true, large part of the constitution has been
written down and much of that law has been passed in the parliament which is known as statue
law. Therefore, parliament sovereignty will be defined with the four tenets which includes:
 Parliament has full authority to crate laws and statutes.
 Court in UK does not have power to declare any type of statue which is invalid
 Current parliament in country is not abided by any law which relates to previous
legislative.
 Any type of law will not be passed by the parliament because of which future body
cannot able to undo.
Thus, Doctrine states that UK parliament is supreme which have unlimited power for creating
and ending any law. It means that no one can set aside the act which is developed by the
parliament. It is the view where sovereignty presents a contradiction, which states that
parliament is the only authority which only limits its own power.
Various sources of UK law:
There are mainly four principles and sources of UK law which include legislation,
common law, European union law and the European Convention on Human rights. It is to be
note that there is no single series of document which contain whole procedures of these laws in
UK.

Statute law:
It is an act of parliament which is written and is enforceable in the court. Many of the
such law do not embody principles which affect constitution but other principles may embodies
because they mainly affect the way in which laws and principles are governed within the states
(Kubasek and et.al., 2015). For example: The representation of the people act 1918 was the first
start which is developed in accordance with female suffrage in great Britain. This is the bill
which was passed with the majority in the house of commons. Motive of this act is to provide
right of vote to women over the age of 30 which is a major start in 1918.
EU law & Treaties:
This is the law which has become a significant source in the constitution of British. If EU
law and UK law gets conflict then EU always takes precedence. The law has been especially
important in terms of economic and social legislation.
Common law:
Illustration 1: Various sources of UK law
(source: Sources of English law, 2015)

It is the law which also known as case law or precedent law which has been developed
by the court and judges. It is also a source of UK constitution which is unwritten, which is
creates to handle individual cases of the country. It is the third branch of law which contrast with
statutes where adopts proper legislation process and regulations. Its aim is to give 'Precedential
weight' where judges are bound to make decision which ensure consistent treatment.
Equity law:
In this law, equity refers to particular set of remedies and procedures which involved with
the civil law. This is the body of law which is developed in English court of Chancery and now it
is included in common law. This is right for expressing, constructing and for constructive trust
which is created to provide relief against penalties and for equitable set-off.
b.) Explaining role of government in the process of law making and applicability of statutory and
common law in the court of justice
In recent years, law making procedure has become more frequent where proper
examination and amendments will be developed in order to make more easy and flexible process
before conducting formal introduction in the parliament (White, 2017). Thus, here role of
government involves in law making process where consultation has been approached through
such body only. Government issue paper for public discussion and responses.
The decision to legislate: for conducting each session of parliament, government
introduced legislative programme regarding planning of the bill and it is also asked by
government to consider the same session. In this process, government department provides
proposal for law and bill which they want to introduce and then they submit a bid for such bill to
Parliamentary Business legislation of the Cabinet. Once, such proposal has been agreed by
Cabinet, PBL committee review it for beginning session of law making process.
Primary stages: in this stage, discussion on such law and bill get begin either in the
house of commons or in house of lords. Government makes decision by balancing the need for
making sure that each house has balanced programme in legislation. Its stages are as follows-
First reading: which is pure formal stage and no debate is considered on the bill.
Second reading: Debate is been considered on the main principles of Bill, which held in
Chamber. Government minister is in charge for opening debate by explaining provision of the
bill. First, discussion will be start by the opposition respondent and then other members are free
to discuss it.

Committee stage: this is the stage where line by line detail of the bill or law get discussed. The
process may be carried out by convened committee of MPs which reflect strength of parties in
the House of whole (Gormley-Heenan and Sandford, 2018).
Report stage: this the stage which takes place in Chamber where only amendments are
discussed. This is the purely formal stage where reasons get discussed for adding provisions in
law.
Third reading: this discussion takes place in the house of commons which is purely a general
discussion regarding law of bill. In the house of lords, third reading will take place where
amendments can be tabled.
Later stages: in this stage, both houses must need to be agree upon the law or bill which is going
for becoming an act. Here, bill amended in the second house and returns when amendments gets
considered.
Royal Assent and beyond: law or bill which passed by both houses becomes law until it
has given royal assent and must have been signified to parliament. The will not considered as
law until royal assent given on that.
Applicability of common and statutory law in court of justice:
Both the laws are one of the important law of UK which govern important aspect in order
to provide existence and contribution to nation. Its applicability in justice court are as follows-
Common law: under this law, judges decides their decision on the basis of previous cases which
hold specific facts and which provides lights on applicability of law. This is the law which has no
basis of statue and is developed through written opinion of the judges (Teasdale, 2018). Thus, the
opinion which provided with this law will mainly affect future decision of the lower courts.
Judgement which given under a court of law will be developed on the similar set of facts and
cases which serves legal principles and authority relates to common law. Thus, with this law,
judge develop their decision with proper research analysis, by locating with previous relevant
cases, with the extraction of statements and cases which determine its applicability.
Statutory law: This is the written law which does not begin with research analysis, or with
previous location of relevant cases. This is the law which is applied only to a specific cases.
These are the organised and codified into law of codes because of that, statutory law only cover
areas which is regulated by bodies and also in areas where common law is not applicable.

Therefore, in order to give decision, judge only need to develop analysis of written law where
situation suits perfectly.
c.) Explanation on company, employment and contract law which has potential impact upon
business with the difference between legislation, regulations and standards
For getting government support, every organisation needs to comply with rules and
legislation which relates to businesses. Thus, potential impact of three laws upon businesses are
as follows-
Company law:
This is the rule which allow businesses to understand what is expected to them with its
personal capacity where proper applicability of rules and legislation are their in order to operate
business function in the country. This is the law which states that how businesses needs to deal
with the transactions on daily basis (Basic principles of company law, 2019). Further, this law
also hold government from infringing business property when sudden disputes arises. Main
motive of such law is to provide peace in order to conduct smooth operations of the business and
to solve any kind of disputes with the proper guidance in business area.
For example: if a complaint has been brought by one party for another party, a neutral decision
maker will be hired by company so that proper and neutral decision get developed regarding
particular dispute. Thus, with such laws and regulations, businesses, employers and employee
will able to file their complaint in proper court or parties may try alternate method of dispute
resolution, if they did not want to engage in legislation.
Employment law:
On business operations, main affect is of the environment in work culture. There must be
a positive environment where friendly ways get developed in order to handle employees
expectations and to dispose of waste which will not contribute to pollution in country. Entity
must have to develop understanding of laws and regulations which provide proper protection to
employee health and safety (Anthony, 2018). Employee and consumers may able to litigate if it
is found by them that the loss or damage which they occurred is because of the poor health
practises by organisation. This will directly impact upon reputation of the business and on its
stakeholders.

For example: if company hires an employee which is below the age of 18, then it will be
considered as business negligence and in accordance with employment laws they have to bear
some penalties and prosecutions.
Contract law:
It is basically a law which has legal documents in the form of agreement either it is oral
or written. Such agreement associated with the exchange of goods and services, money and
properties (Mortimore and Blick, 2018). This is law which provides proper security for
conducting business operations in market. The law potentially impact upon every business which
is whether providing a service or providing goods and services. Thus, in order to deal with each
and every transaction, a contract must be in place which work as legal evident. Therefore, if any
illegal conduct has been found in business operation of the entity then it will directly impact
upon reputation of the business.
Difference between legislation, regulations and standards:
Legislation: it is an act or process for making or enacting any laws in the country.
Government debates on the matter periodically in order to make or develop any kind of law or
act. Proper analysis for developing business law or an act is been analysed by doing various
debates with opposition parties.
Regulation: it is the type of rule which is put by government or authority in order to
develop businesses in appropriate manner. Main motive of regulation is to analyse specific areas
which has the need to carry rule which provides protection. For example: protection to
environment is the rule which abide businesses to conduct business functions in such a way that
it cannot harm environment of the society. This mainly ensures by the regulatory agencies in
order to carry out purpose of legislation.
Standards: it is considered as type of concept, a norm or a principle which is established
by government for developing quality or performance and procedures of the businesses (Light
and Munk, 2018). Main motive of such standards is to develop efficiency in businesses where
operations are conducted in such a manner that it cannot harm society or environment.
Therefore, these are set of government bodies which mainly impact upon the potentiality
of businesses across the world.

TASK 2 (LO3)
Nature and formation of different types of business
Sole Proprietorship: it is the type of business which is owned by only one person. This
is the business which is easy to set-up and is least costly in comparison to other forms of
ownership. In this business, owner has unlimited liability which means that if such business not
able to pay amount of creditors. This is the firm which usually adopted by the small business
entities (Kohler, 2016).
Partnership: it is the type of business which is owned by two or more parties who are
agreed to contribute resources into the entity. With this agreement, partners are entitled to divide
profit of the business among themselves where all the partners have unlimited liability.
Corporation: it is the type of business which has separate legal personality from the
owners the business. Here, owners enjoy limited liability and they also have limited involvement
in the business operation of company.
Limited liability company: it is the hybrid form of business which has its own
characteristic in both corporation and partnership. It is not incorporated because of which it is not
considered as corporation. Owners in this business has limited liability .
Cooperative: it is a business organisation which is owned by group of individuals in
order to earn mutual benefits from business operations. Here, in this business persons which
makes up the group is called members. Therefore, Two types of business includes in this form
that is incorporated and unincorporated (Burns, 2016).
Difference between incorporated and unincorporated business with references to their
management and funded
Incorporation businesses are generally known as the corporation while unincorporated
business are mainly considered as sole proprietorship and partnerships. Therefore, the difference
between two of the businesses are as follows-
Basis of difference Incorporated Unincorporated
Business liability These are the businesses which
is known as independent legal
entities. In this, owners are
generally not liable for the
This is the business which are
simply the extensions of its
owners and they are personally
liable for liabilities and

liabilities and business
operations of business
(Cromwell, 2019).
operations of business.
Unlimited life This is an independent
business which is not abided
by the life of any persons.
Thus, it can be said that these
businesses have unlimited life.
Generally such business have
finite life which mainly depend
upon the life of the members.
Thus, it can be said that it has
finite life.
Transferability of interest This enterprise are generally
legally independent where
interest of owners easily get
transferred without affecting
operations of the business.
This is the enterprise which are
extensions of the owners
because of this it is difficult to
transfer interest of business to
third party.
Management This is the business which
mainly managed by board of
directors, managers and
employees.
Only owners is entitled to
manage business operations.
Funds This is the business which run
out from the money where
owners did not have to
remaining or outstanding
debts.
This is the business which
mainly run out from the funds
where owners have to pay any
type of remaining or
outstanding debts.
Advantages and disadvantages of partnership and company
Benefits of partnership are as follows-
Easy formation: this is the business which can be formed without any legal formalities
where no formal documents are required and agreement between partners may be oral or written.
Large resources: generally partnership enjoys large resources in order to expand scale of
business operations and profitability.

Flexibility: this enterprise are generally free from any type of legal restriction on
activities which conducted by them. Any kind of change will able to consider by partners if they
find suitable for operating business functions.
Demerits of partnership are as follows-
Limited resources: there is a limit by which more than 20 members will not able to form
partnership business because of which it limits the amount of capital which can be increased.
Lack of public faith: because of no legal formation, people did not have faith in such
organisation which mainly affect its business operations.
Advantages of company are as follows-
Limited liability of owners: assets of the owners are protected from the debt and liabilities
which got arise in the corporation. Shareholders are also not held liable for any kind of business
loss (Corporation advantages and disadvantages, 2018).
Easy to raise capital:from the sale of stocks and bond, this businesses will generally able
to raise their capital and profitability.
Disadvantages of company are as follows-
Double taxation on profits- corporate business have to pay both federal and state tax on
profit which they earn and if dividend is paid to shareholders then such will also treat as income
and again taxed charged upon business affairs of company.

SECTION 2 (LO4)
CASE 1
Statute:
Insolvency Act, 1986:
Compulsory winding up: As per the section 124 of this act creditors have been given
rights to file a petition in the courts to wing up the company when they have dues of £750 or
more from a company and the company is unable to pay the same (Wakabayashi and Arimura,
2016). In such cases a petition is filed to compulsorily liquidate the company and realise the dues
by selling the assets and property of the organisation.
Defence against of Winding up petition:
Company Voluntary agreement:
This is an arrangement between insolvent company and its creditors. The arrangement
has a legal binding effect on both the parties to this transaction. In this the insolvent organisation
is allowed to repay the debts' proportionality in a period of 1-5 years. This must be approved by
75%of the creditors (Rana, 2016). For this the company must proves that the firm is insolvent
and is a viable going concern with abiding all legal provisions.
Case law: Mann V Goldstein
This was the case related with granting the winding up order for the company by the
creditors. The creditors were of the view that they can file a compulsory liquidation order for the
organisation in odder to release their dues by selling the assets and property of the firm, the
business disputed the debt and consequently winding up petition was filed by creditors. The
court rejected the application that for getting such order the debts of the company much be
undisputed which in this case was not. Hence, the creditors could make the company liquidate
compulsorily. With entering into CVA the company can continue to trade with directors
retaining control over the firm.
Legal advices:
As Champion Ltd is unable to pay is dues and have defaulted several times in making
payment means the company is on the verge of getting insolvents. So with the above rules of the
statues and the case law it is advised to Champion Ltd to enter into Company Voluntary
arrangement with the creditors. Moreover, with the decided case the debts of the company is not

disputes so creditors have right to file winding up petition for Champion Ltd. With getting a
CVA the company will be protect form liquidating and the creditors will be paid in full in a
period of 1-5 years, with this both the parties to dispute are in Win – Win situation.
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Alternative dispute resolution:
Arbitration:
Under Arbitration a third impartial party is appointed as arbitration who upon hearing
facts and story of both the parties and after taking into account all evidences awards a decision.
For the present case Champion Ltd and it credits can appoint an arbitrator and present him/her
with facts of the case (Creutzfeldt, and Bradford, 2016). After taking into account all the
evidences and carrying on investigation on the matter of dispute the arbitrators will pass a
decision on the problem in which company may not be wound up and dues of creditors might be
paid in specific time frame.
CASE 2
Statute:
Companies Act, 2006:
Contract of the Employment:
This can be defined as contract between the employer and employee. The employment
contract defines the terms and condition of the appointment as well the of employments. This
includes the provisions related with the pay, working hours, leaves, retirement, resignation,
termination, conduct of the employee, restrictive clause binding the employee etc. the
employment contract have binding effect on both employer and employee and they must abide
by the conditions of the contract.
Breach of the employment contract:
As mentioned above the employment contract have binding effect on both employer and
employee and in case anyone of them contravene any of the term or condition of the contract it is
referred as breach. To breach means to act against the pre mentioned condition in the contract.
There is level of the breach this means non abidance with a very small contractual term will
suffice the breach (McCorry and et.al., 2018). For breach of the contract under employment there
are two remedies available that is suing the breaching party or obtaining injunction order either
enforcement of an act or to refrain from doing an act.
Injunction order:
This can be defined as an order from the court by the innocent party against the breaching
party to stop doing an act or to do ant act as per the prevailing circumstances. Prohibitory
injunction is the one under which the arty under breach is refrain form performing an act to
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prevent the innocent party from getting injured or harmed (Quratulain and et.al., 2018). For
obtaining injunction order from the court the claimant must prove two condition Ito the judge
that:
 there is infringement of the rights of the party; and
 The monetary damage claim will not be adequate compensation for the harm.
Case law: MJN v News Group Newspapers
In this case, the high court granted an injunction order to a footballer to prevent
the publication of the details of extra marital affairs which the footballer was allegedly having
with a famous model. The injunction was obtained to the basis that basic human rights of
claimant was infringes and would the news get flashed the monetary damages could not
compensate the reputation deterioration.
Legal advices:
With the provision of statues and case law it can be stated that the condition to serve the
notice of 12 months before leaving the job in the employment contract is binding on Mr
Anderson (CFO)as per the rules of Companies Act, 2006. He contravenes this condition by
taking up job in another firm without serving the notice period. Hence, it is breach of the contract
by the CFO. The company is available with two option to take action against the CFO, in this
case the lega remedy sough by Amber Ltd is practicable as the confidential information if shared
by Anderson to rivals can not suffice the damages and injuries to the company.
Alternative dispute resolution:
Mediation:
This is a method of ADR where a third impartial party act as a mediators and try to make
the parties to reach an amicable decision, the mediator do not pass the decision rather parties
reach to a solution by taking and negotiating (Andrews, 2016). This is suitable method of ADR
for the present dispute between Anderson and Amber Ltd rather than going to lengthy litigation
process.
Reason for Alternative dispute resolution
The reason behind selection of various method of ADR in the above case can be outlines
as:
 This is fast precess as the trials and litigation are lengthy in nature.
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 The results and decision under ADR methods can be kept confidential and the hearings
cannot be used later.
 Under ADR the parties t dispute are permitted to put their side of story and have more
control over the outcomes a then the normal trials.
 ADR is flexible allowing the parties to decide upon the procedural and discovery rules
which they want to apply to their dispute and getting its solution.
Different sources of legal solution and support for dispute resolution:
Comparison: The solution to the dispute by both legal procedure and ADR gives
effective result to solve the business issue. In the legal advise the court proceeding are initiated
and then problems is resolved. Similarly, under ADR the arbitration and mediation process is
defined to reach to an amicable outcome s that dispute can be resolved.
Contrasting: Although, both the methods provides solution to commercial disputes
through different sources and by following different approach and procedures. They both have
dissimilarities as well. As legal advises lead to courts trials and litigation while ADR is adopted
to avoid going to court and settle the dispute out of the court. More over, legal procedures are
lengthy as well as expensive, conversely the ADR is fast, cheap yet effective way to solve the
dispute which is more preferred in present time.
Evaluation of effectiveness Legal solutions, Legal advices and Support for dispute resolution
The legal solution and legal advices given in the above case through legal procedures and
ADR present the parties to dispute with alternative ways in which they can resolve their issues.
Both the methods provides the solution to the parties as for the first case in legal advise
Champion Ltd is suggested dispute is debt to prevent the legal action from creditors and for the
same Arbitration method is recommanded to solve the dispute. Both legal advice and legal
solution present the parties with alternative solution which ultimately solve the issues between
them. Similarity for case 2 under legal advices Amber Ltd is suggested to get injunction order as
this is right thing to do as per the provision of companies act 2006. But under ADR they are
advised to go for mediation in which with involvement of third party Amber Ltd and Mr.
Anderson can resolve the dispute by talking and negotiating on terms of employment contract.
This can be stated all the solution ultimately gives an answer to solve the problem.
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CONCLUSION
From the above report, it is summarised that for protecting best interest of the entities,
business laws are rules and regulation which provides a suitable guideline for operating functions
in the market. In this report, understanding has been developed on laws which related to
enterprise and humans as well. Such as common and statutory law. Role of government in order
to develop act or law is also explained in this report where it is summarised that government has
important role in both houses of parliament.
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