Comparative Analysis of Business Organisations

This assignment requires a detailed comparison of different types of business organisation, including sole traders, partnerships, and limited companies. It also involves analysing the implications of corporate voluntary arrangements (CVAs) and induction orders for businesses like Champion Ltd and Anderson's involvement with Amber Ltd.

Business law

Table of Contents
INTRODUCTION...........................................................................................................................1
SECTION 1......................................................................................................................................1
TASK 1............................................................................................................................................1
1. Different sources of UK law and parliamentary sovereignty..................................................1
2. Role of Government in making law process ...........................................................................3
3. Impact of employment, contract and company law over organisation....................................4
TASK 2............................................................................................................................................6
Types of business organisation....................................................................................................6
Difference between incorporated and unincorporated businesses...............................................7
Advantages and disadvantages of partnership and limited company.........................................8
SECTION 2......................................................................................................................................9
Case 1...........................................................................................................................................9
Case 2.........................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCE.................................................................................................................................13

INTRODUCTION
Business law can be considered as the set of rules and regulations that tell us and dictate
us how and organization should be derived and to be formed. It encompasses all the laws and
regulations that, helps the business by directing them, how to start, manage the firm and can
close or sell its entity in the market. This assessment will help to understand the different sources
of the laws that can help to analysed which law is necessary for what kind of the business
activity to drive it smoothly. This will also include the role of the government in creation of the
law and also going to be explained that how common law and statutory law is being applied in
the justice court. Further more, with the help of given case study, report will help to understand
that how the company, employment and contract law affect the business and influence its
decision-making strategies. This will also cover the understanding of the different types of the
organization are legally formed. This will explain that How the business organisations are being
funded. At the last recommendation of the legal solution to resolve the range of disputes on the
given cases also will be included.
SECTION 1
TASK 1
1. Different sources of UK law and parliamentary sovereignty
This is the set of the constitutional law which helps to give the legislative branch to the
government of the UK in order to set the different laws as opposed to the judicial branch. This
has the full authority to create laws and court can not declare that laws invalid which are being
created by Parliament.
The origin of the UK Parliament had done in 17th century following by the Glorious
Revolution which transfer the authority to the elected parliament from the Monarch (Beatty,
Samuelson and Abril, 2018). This Parliament is sovereign constituted with number of
characteristics:
 Parliament has full authority to bind the future parliament.
 Any valid and authentic act of the parliament will not be changed by the court.
This is considered as the most fundamental elements of the British constitutions. It has
the unlimited parliament authority which is not even declared invalid by the court as well. It
holds that legislative body of the British parliament has absolutely sovereignty and also has the
supreme position over the all governmental institutions which include the judicial or executive
1

bodies. Parliamentary sovereignty is a set of principles of the UK constitutions, that gives the
supreme legal authority to the parliament in the UK which can build or remove any law and even
court cannot overrule the legislation of the parliament. As in this way parliament sovereignty is
the most important part of the UK constitution (Fisch, 2019) (Fisch, 2019). This Parliament is
sovereign give the power or authority to the British parliament to do anything and can create any
kind of the law.
Parliament is sovereign is the fundamental key principle on which unwritten constitutions
of the UK are depends. Parliament is considers as the sovereignty because it holds the highest
authority to create and build laws on any topic what they wish without any restrictions.
Sources of UK law
There are four sources of UK laws which are legislation, common low, European Union and
European Convention on Human Rights.
Legislation:
It is law which is made by the legislature. The most essential pieces of legislation are
Acts of Parliament. The principal legislature in the UK parliament that is based in London. It is
the only body which has power to pass laws that implement in all four nations (Morrison, 2018).
The UK parliament comprises House of Commons and House of Lords.
Common Law:
The legal system of England and Wales is common law, so that the decisions of senior
proceeding courts become portion of the law. It is the body of unwritten laws which are based on
legal case law set up through the courts.
European Union Law:
The United Kingdom is Member State of European Union that refers to European Union
laws takes priority over UK laws. It is the system which has political associations, social and
economies policies (Gelter, 2016). The Council of European Union shows member state
government while the Court of Justice is referred to continue the rule of law and human rights.
Acts of Parliament:
The UK Act of Parliament is primary legislation passed through Parliament of United
Kingdom. It has been identified through memberships of European Union which acts or portions
that conflict with EU law can be dispaplied. An Act of Parliament is law which enforced in all
field of UK where it is applicable.
2

2. Role of Government in making law process
Law making process is accountability of legislature to facilitate enactment of regulations.
Government is accountable for deciding ways of running nation and for handling daily things.
First Reading: The law making process begin with first stage which is just formality in both
houses like house of lord and house of common.
Second Reading: Then bill can have their second reading. Both are houses are presented by
government bills. After that, Government can claim to have listened to proposed revises to bill.
Also, it can claim to in charge of bill. It is normally done to clarify any amendments the
government has agreed to create to their bills (Gelter, 2016).
Committee Stage: When bills are passed from second reading in house of common, they are
referred to standing committee which are chaired person by members of Chairman's Panel.
Report Stage: After previous step, committee has analysed the bill can report their judgements
to whole house of common.
Third Stage: At this stage, final draft of bill is reviewed. Bill can not be changed substantially at
third reading in house of common.
Royal Assent: In last stage, law making process in UK is Royal Assent. This is provided through
Queen to bill which has completed all parliamentary stages.
Application of Statutory and common law
Common law: are made by giving binding effect to the rulings and decision passed in
the justice courts. The judges are required to follow the decision and refer the ruling in case
with similar facts. The requirement is mandatory but allows the judges an application of their
discretion. This means that when a judge is of the view that there is an omission of the fact and
evidence or there is wrong interpretation of the statues law then he/she have a power to deny the
previous ruling and pass a new judgement over the lawsuit. This was seen in the case of pimlico
plumber case where application of judgement of Uber v Aslam case was seen as to decide the
employment status of plumber ruling of this case was used.
Statutory law: are the those, made through act of parliament and are interpreted through
use of external and infernal aids. This includes short and long titles, Hansards and dictionaries.
The judges are required to identify a relevant act for over a case and apply its provision on the
case with interpreting the provision regarding the facts of case for passing a ruling. No judge is
given a power to raise question over status law they must interpret acts and laws in the manner
3

that are meant to be understood. This was seen in the case of Fisher v Ball where literal use was
used to interpret the laws and it was stated that a display on the shop is an offer not just invitation
to treat.
3. Impact of employment, contract and company law over organisation
Differentiating between legislation, standards and regulations
In the English legal system, different laws and principles can be categorized into three
parts i.e. legislations, standards and regulations. Legislations of the country are those that
provides information regarding the actual laws of the country (Laws vs. Regulations vs.
Standards. 2018). These can be considered as a general direction of government regarding
performance of any specific activities within the country such as employment act, 1986 and a
nono abidance can lead the organisation to face legal proceedings and laws suit along with
imposition of fines and penalties.
On the other hand, regulations provide detailed description regarding the reason behind
formulation and implementation of any law. These provide details regarding specific
requirements and instruction in context to how a law is needed to be enforced or complied with
at the time of performing any activity within the country. One such regulation is employment
regulation 1999 and this defines how laws must be applied in organisation and its legal
implications are in form of litigations and penalty imposition over company.
Whereas, standards are those provisions of the overall legal system that makes the
population understand the minimum requirements to be fulfilled in order to comply with any law
or regulation of the country. Standards are generally applicable over the business organisations
that manufactures and sales different goods and services to their customers. These provides
information regarding minimum quality that the company needs to include within goods or
services provided to the customers such as employment standard 2003 and there is no legal
requirement to follow it compulsorily. Hence, it can be stated that as per the provisions of legal
system of UK, all legislation, standards and regulations are different from each other.
Impact of different laws over business of a company
Legal system of UK contains several laws that are required to comply with, by the
company. Due to such compliance the performance of several activities get affected. Some laws
that have potential impact over the business of a company can be analysed as under:
Employment law
4

The employment law of English legal system consist of various acts and regulations that
are required to be complied with by each and every company that have employed employees
within its business. National minimum wages act 1996, Employment rights act 1996,
Employment relation act 1999, Pension Act 1995, etc. are some essential acts covered under the
employment law of UK. A company needs to taken into consideration each employment law at
the time of recruiting any candidate, setting terms of employment, till the retirement of such
employee (Grayson and Hodges, 2017). Compliance of these law leads to have a major impact
over the performance of different business activities of a company. For example, when any new
candidate is employed at any vacant position of the company, it needs to sign an employment
contract with the company and include each essential requirements and conditions of the
employment. In addition, the contract also include different details of the employment such as
amount of wages, working hours, any other essential conditions of the employment, etc. These
clauses are needed to be followed by both employer and employee at the time of performing any
activity towards the employment. Thus, it affects the performance of several business functions.
In cases on non abidance legal proceeding against company can be initiated and it be sued along
with imposition of fines and penalties.
Contract law
A set of laws that provides rules and guidelines to be followed at the time of either
entering into any agreement of sale or purchase of any goods or services or while performing any
activity under the contract. As purchase and sales of goods and services for gaining specific
amount of consideration is one amongst the major activity of a business, this law have a potential
impact over operations of a company. Sale and supply of goods act 1994 is the act covered
under this law and having potential impact over the business of a company. For example, when
a company enters into any agreement regarding purchase or sale of any goods or services, it
would need to comply with each requirement of the contract law such as creation of a contractual
agreement as per the contract law. This requirement increases documentation procedures of the
company along with time involved in the completion of performance as well. When such laws
not followed legal actions against company can be taken where it can be sued for damages
suffered by innocent party along with initiation of litigation.
company law
5

The companies act 2006 is the act covered under company law of UK. The act contains
rules regarding each activity performed by a business organization during its whole life. The act
includes the rules for setting up of any company till the stage of its dissolution. Thus, it is the law
having the a major impact over the business operations of a company (García-Sánchez,
Cuadrado-Ballesteros and Frias-Aceituno, 2016). For example, in case, the company wants to
expand its business beyond its geographical boundaries, it would need to fulfil various
requirements such as informing the registrar of another state in which the company is to be
expanded, fulfilment of various documentation procedures, etc. all these requirements increase
the operations of business along with increasing the cost to be involved in the expansion
procedure. With non abidance with company law, the first implication is de registration of
companyies name form companies house and fines can be imposed.
Thus, it can be said that there are various laws that are needed to be complied by different
business organizations. These laws have potential impact over the business operations of a
company.
TASK 2
Types of business organisation
Sole proprietorship:- It is generally known as the sole trader of the company
where it has individual proprietorship and entrepreneurship which is a type of enterprises which
run and owned by the one individual & there are no distinction of legal between the business
entity and owner. In this the individual trader receives all the revenues and profits and have
unlimited responsibilities for all the debts & losses. Each and every asset of the business has
owned by the proprietor own and all the debts of the company are the proprietors. It is generally
a contract of partnership (Alashwal, Low and Kamis, 2019). The nature of the sole
proprietorship is it exist as long the owner alive and it is not separated from its owners.
Formation process of sole proprietorship is a generally a type of business structure where
it managed and owned by individual which is not separated legally from the business. It means it
enjoy all the revenues but also take all the responsibility.
Partnership:- Partnership is generally a term where all the agreements had been
done between partners & Where one or more people agree on one thing. Partnership agreement
had done with mutual understanding of two more persons. Partnership had done in individual
6

business and individual persons. Business partnership had done for increasing the likelihood of
each and every mission and also make more money. For partnership investment it helps in
achieving more success and growth for future. The results of partnership is holding the equity
and issuing that governed by only a contract (Marquis and et.al., 2019).
Nature of partnership is where two person join hand for setting the business and also
share all the profits and losses which is known as partnership and formation process of
partnership is an arrangement where two or more people taking its own entity and personally
share all the loses and revenues. This is an application & prescribed fees which is required for
submitting to the registers of the firms where the rights and responsibilities taken by each
partner.
Limited company:- limited company is generally a liability of subscribers and members
of firm where limited invested and guaranteed to the organization. Limited companies has
limited shares and limited guarantee. It may further divide in the private companies and public
companies. The members of the limited company has restricted with so many rules and law of
the company. It is one of the most common distinction which made between public tradable
company. The main advantage of limited company for generating profit and revenues by their
own and limited company is likely to paying less tax than the sole traders (Wright, 2019). The
owner of the limited company is protected with all the limited liabilities and also which generally
mean it is responsible for the debts that up to the investment of their values and gives guarantee
to the company.
Formation process of limited company is registering the legal entity with the house of
companies. The majority of the business entities that providing the incorporation services for
themselves. The process of formation involve so many things such as the choosing name of the
company, filling all the forms of the company and last one of filing and fees of the things which
has been paid.
Difference between incorporated and unincorporated businesses
Unincorporated:- organisation are those which are non registered under any law in force
which generally includes sole trade and general partnership business. The management is done
by the owners and partners of firm. There is not a requirement of appointment of any legal
person or other in order to manage the business. All decision are taken by mutual/sole
understanding of parents/sole trader. For the funding of these type of business personal savings is
7

the best sources. Moreover, the funds can be generated from taking loans and advance form
friend and family for making them partner in the business.
Incorporated:- incorporated organization means those which are registered under law.
corporation may be non-profitable organization and business, government and new town and
city. Incorporation is a legal process that used for making and form the company and corporate
entity. This corporation has created legally declaring the entity of corporation which is separated
from its owners (Ouyang and et.al., 2019). Incorporated business are registered one which
incudes Limited liability partnership, public limited/unlimited company and private
limited/unlimited companies. The management is done through mangers, directors who are
responsible for conducting operations of the business. Moreover in these type of business
company secretory, charted accountant and internal auditors are required to be appointed in order
to look in to legal matters and abidance with national policies and standard of accounting and
business conduct. The funding of these businesses is done through angle investors, crowd
funding, venture capita and taking loans and borrowing form banks and other financial
institutions.
Advantages and disadvantages of partnership and limited company
Partnership:
Advantages of partnership can be outlines as it is simple to start and there are on legal
requirement for its registration. The funds can be raised easily form partners, friend and family.
For a partnership firm there is no requirement of paying taxes on the profits of the firm. The
partners shares the roles and responsibility company making the decision making effective. Its
disadvantage can be outlined as the profits is distributed among partners so no one have a full
right over partnership profits. With more parters the decision making can get delayed due to
conflict among them. All partners are required to pay personal tastes no their earnings.
Limited company:
The pros of limited companies are that it becomes a separate legal person in the eyes of
law with its incorporation. The company gets a right to own assets and properties with having its
own legal and financial obligations. This makes the liability of the members limited and they are
not held personally liable to pay of business debts in instances of insolvency. The con includes
lengthy legal producer for incorporating a company and requirement of high funds for its
8

establishment. The profits are charged to corporation taxation. The owners losses their control
over business ones it isincorporate and shares are issued.
SECTION 2
Case 1
Issues:
The facts this case states that Champion Ltd have taken payment to shift form one
location to another and after starting business from new place it is suffering form a problem of
making default in making payment to its creditor. The situation is going on form a quite a long
time and now the creditors eager to realise their dues are threatening to file a winding up petition
in the court to liquidate the business. The issues in case arises that, is creditor's thereat is real and
what measure can Champion Ltd take, if the threat of creditor is right to stop such action.
Rules:
Insolvency Act, 1986
As per section 122 of the act, creditors to whom a business owes more than seven
hundred and fifty pounds and company have deflated at many occasion are presented with a legal
right to file a petition in the court to liquidate the company and by selling asset and property of
business can realise their dues from company. This procedure is terms as compulsory winding of
an organisation.
Compulsory Voluntary Arrangement[CVA]:
Under the same act the provision are presented as to how to avoid the situation of
compulsory winding of the organisation to be taken by its owners and director. This is
agreement between the company and its creditors where company where an arrangement is made
to continue the business operation as a solvent business and they dues of creditors are paid
proportionality as per profits made by company while conducting its operations under CVA. This
can continue for a time of 1-3 years and in this time no person or creditor can bring a legal
proceeding against the company. As seen in the case of Byron Burgers the company used CVA
to restructure its business. And it is used or the company with only £30k of unsecured creditors.
Application and conclusion:
With application of above rules of statue law it can be stated that creditors have a legal
right to fie a winding up petition in court to dissolve the company and pay of thier dues by
selling asset and property of business. For this directors of Champion limited are advised to file
9

an application in court to go under CVA with its creditors and with this way it can continue to
operate as a solvent business and also the creditors will also receive their due payments in the
time period of CVA, so it can be stated that it is a win win situation for both Champion and its
creditors as it was used by Bryon Brothers to restructure its business.
Case 2
Issues:
In the present case, Anderson is an employee of Amber Ltd. who has entered into an
employment contract that includes a clause as per which in case of termination or resignation, a
12 months prior notice is needed to be given. Anderson left the job and started working in Beta
Ltd. without serving any prior notice to Amber Ltd. Now the company wants to sue Anderson for
the breach of contract.
Rules: Employment law: The English legal system contains a range of law as per which at the
time of employing any candidate, both employer and employee needs to enter into an
employment contract containing each rules to be followed by both employer and
employee. Binding effect of employment contract: As per the provisions of employment law, both
employer and employee are bound to comply with each and every condition mentioned in
the employment contract. Breach of contract: The regulations mentioned in employment contract states that any
act of employer or employee having overriding effect over the employment contract
would be termed as breach of contract.
 Penal provisions of employment law: As per the rules mentioned under penal provisions
of employment contract, in case any party to the employment contract breaches any term
mentioned in the employment contract, the penal provisions would be attracted towards
the defaulter party (Fudge, 2018). As per the provisions of employment law, in the
defaulter party would be needed to pay for the damages equal to the loss suffered by the
innocent party. In addition, the law also provides right to innocent party to claim for
injunction against the act resulting breach of contract.
Case law: Lambeth v Agoreyo, where teacher performed an activity beyond term of organisation
for maintaining the trust. She filed a law suit in court against organisation on the ground of
10

breach of contract over her termination in her job's employment contract. IT was held that the
business has not breached the employment contract. Rather, teacher had breached the implied
contractual term of maintaining trust and confidence with the firm. On this ground, the court
dismissed the claim of teacher.
Application and conclusion:
By applying the above provisions over the present case of Anderson, it can be stated
Anderson has breached the contractual term by start working in the Beta Ltd. without serving
any prior notice. Thus, it can be concluded that the Amber Ltd. have right to claim for damages
against the act of Anderson. With application of ruling of case law Lambeth v Agoreyo it is
clear that Anderson is under breach of his employment contract and it gives Amber ltd a chance
to seek a legal remedy in form of injunction against Anderson. Further, by applying the penal
provisions of employment law in the present case scenario, it can be concluded that the Amber
Ltd. also have right to claim for the injunction order against the Anderson for stopping him to
work in the Beta Ltd.
CONCLUSION
Form the above report it can be concluded that parliament is the prime body in the UK
who has been empowered to make laws, amend it and end a law. The doctrine of parliamentary
sovereignty has made the parliament a great power in the UK which can not be overruled by any
court, government or even the Queen. The sources of law includes EU directive, case laws,
legislation and act of parliament. The statutory laws have an application where no one can deny
to abide with them and must be interpreted with the aid available where as common laws have
been applied on the discretionary power of the judger with presenting a proof of not abiding with
ruling of a case law. Moreover, it can be stated that the employment, contract and company
laws present the rules and regulation to provide direction to the business organisation in legal
manner and any non abidance can results in serious implication of prosecutions and penalty
imposition. Further more the different types of business organisation includes sole trader,
partnership and limited company. The incorporates are legally registered rather unincorporated
are not. For the case of Champion Ltd, it have been suggested to go under a CVA with the
creditors to stop legal proceedings against the business. For case of Anderson it have been
articulated that Amber Ltd can seek to an induction order form court to refrain Anderson from
taking job in beta Ltd.
11

REFERENCE
Books and Journals
Beatty, J. F., Samuelson, S. S. and Abril, P. S., 2018.Business law and the legal environment.
Cengage Learning.
Fisch, J. E., 2019. Davies Business Law Lecture:" The Problem of Sunsets" with Prof. Jill E.
Fisch.
Gelter, M., 2016. EU Law with the UK-EU Law without the UK. Fordham Int'l LJ. 40. p.1327.
Loewenberg, G., 2017. The role of parliaments in modern political systems. In British and
French Parliaments in Comparative Perspective (pp. 1-20). Routledge.
Morrison, C., 2018. Illustration for Instruction and the UK Higher Education Sector:
Perceptions of risk and sources of authority (Doctoral dissertation, King's College
London).
Alashwal, A. M., Low, W.W. and Kamis, N. A. M., 2019, April. Effect of Inter-organizational
Learning on Construction SMEs Performance. In IOP Conference Series: Materials
Science and Engineering (Vol. 495, No. 1, p. 012043). IOP Publishing.
Marquis, E. and et.al., 2019. Growing partnership communities: What experiences of an
international institute suggest about developing student-staff partnership in higher
education. Innovations in Education and Teaching International. 56(2). pp.184-194.
Wright, T. O., 2019. Organizational Identity at a Nigerian Integrated Food Processing
Company: The Case of Feed Me Ventures Limited (Doctoral dissertation, figshare).
Ouyang, T. and et.al., 2019. Analyte monitoring: stabilizer for subcutaneous glucose sensor with
incorporated antiglycolytic agent. U.S. Patent Application 10/219,728.
Grayson, D. and Hodges, A., 2017. Corporate social opportunity!: Seven steps to make
corporate social responsibility work for your business. Routledge.
García-Sánchez, I. M., Cuadrado-Ballesteros, B. and Frias-Aceituno, J. V., 2016. Impact of the
institutional macro context on the voluntary disclosure of CSR information. Long Range
Planning. 49(1). pp.15-35.
Fudge, J., 2018. Illegal Working, Migrants and Labour Exploitation in the UK. Oxford Journal of
Legal Studies. 38(3). pp.557-584.
Online
12

Laws vs. Regulations vs. Standards. 2018. [Online]. Available through :
<https://www.focusstandards.org/standards-vs-regulations-vs-laws/>.
13

14