UK Business Law and Organisation

This assignment delves into the legal framework governing businesses in the UK. It examines the creation of laws through parliamentary procedure and contrasts common law with statutory law. The impact of employment, contract, and company law on business operations is analyzed with illustrative examples. The report categorizes different business organizations (sole trader, partnership, and company), highlighting their distinct legal structures, management styles, and funding options. Pros and cons of each structure are also outlined. Finally, the assignment proposes solutions to legal disputes using both traditional legal methods and alternative dispute resolution, critically evaluating both approaches.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
ACTIVITY 1....................................................................................................................................1
P1. Sources of law.......................................................................................................................1
P2 Elaborating the role of government in making law and application of statuary and common
law in justice court......................................................................................................................2
M1 Evaluation of effectiveness of the legal system regarding recent reforms and development
.....................................................................................................................................................3
P3 Illustrating the impact of company, employment and contract law on business...................3
M2 Differentiating between legislation, standards and regulations and identifying their
potential impact on business.......................................................................................................4
D1 Critical evaluation of the legal system and law.....................................................................4
P4 Legal formation of different types of business organisation.................................................5
P5 Management and funding of various form of businesses.....................................................5
M3 Advantages and disadvantages of their formation ...............................................................6
D2 Critical review and evaluation of the different types of business organisation....................7
P6 Identification and recommendation of appropriate legal solution to resolve two different
disputes through relevant examples............................................................................................7
M4 and D3 Comparison and evaluation of the different sources of legal advise and support....8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The term Business law is defined as the body of law which regulates and governs the
activities of business and trade. Business law helps in regulating the making of contracts,
agreements, manufacturing and selling activity of consumer goods and services. The report will
discuss about Global Solicitors, a London based law firm. This law firm is a business legal entity
which is formed by one or group of lawyers for carrying on the practice of law. The main role is
to advise clients about their legal rights and responsibilities.
ACTIVITY 1
P1. Sources of law
Roots of law are defined as the base and formulation of laws, guidelines, the binding
rules which enables any of the state in regulating to territory of itself.
Sources of Law includes:
European Law - The European Community law was the source of UK law from 1973, at
that time UK had become European Economic Community's member. of the European Economic
Community. European Union law was the part of UK law under the European Communities Act
1972. In the case of any conflict or disputes, European Union law takes priority. The sources of
European law includes:
The Treaties - Treaties imposes legal obligations on the member states which includes
the Treaty of Rome 1957, the Single European Act 1987 etc. which are directly enforceable by
the individual citizens irrespective of implementation of legislative action by the member state.
This enforceable obligations is directly related to equal treatment of men and women in
employment.
Regulations - These are intended to impose disciplines and uniformity of law among the
whole community members and state with immediate effect after being isued in all member
states.
Directives - It consists of most inventive source of law in the European Community
which applies to all member states having intention of bringing harmonisation of law i.e. making
it similar & not identical between the member states (Beatty, Samuelson, and Abril, 2018).
Decisions Only a particular member states, companies or individuals are affected by a decision.
With decision authority, it empowers to do & prevent party from doing something.
1

Delegated Legislation – It is considered as indirect or secondary legislation which is
made by the bodies outside Parliament with the help of legislative power delegated by the Act of
Parliament. There are four types of delegated legislation:
1. Orders in council - The Emergency Powers Acts 1939 and 1984 give law-making
powers to the Privy Council in times of national emergency.
2. Statutory instruments – It is made by departments of government for executing the
policies general principle, set out in enabling Act of Parliament.
3. Regulations to apply the law from European Union – 1972 Act, European
Communities, empowers in implementing directives & provisions of treaty to the ministers and
departments of government.
4 Bye-laws – Are made by the local authorities and other regulatory bodies having all the
statutory powers to direct & govern facilities provided by they.
Case Law – It is also known as Judicial precedent, as it is taken from the doctrine of
stare decisis, and linked with the jurisdictions of the English common law in relation with the
concept adopted from Civil Law systems. Case Law is considered as the accumulated principles
of law which is derived from centuries of decisions. Judgements or decision passed by judges on
important cases are recorded and thus become source of law (Morrison, 2019). As per the
English law dictionary, it defines case law as the judgement or decision of a court of law which
is cited as the authority for making decision of similar state of fact in the same manner.
Act of Parliament - The act of parliament is the prime source of UK law where a law is
formed through the parliamentary process. This is primary legislation where both the house of
parliament makes passes a bill and then the same is approves by the monarch to make the same
as law.
P2 Elaborating the role of government in making law and application of statuary and common
law in justice court
A law is made though the act of parliament where a bill is passed by both the houses of
parliament. A bill in its early stage is a proposal which is presented to cabinet minister for
approval. With this approval the proposal converts to a bill. The bill is presented before either
one of the houses of parliament that is house of lords or commons (Cartwright, 2016). The bill is
introduces to a house through first reading where tiles is read out and its outline of the bill is
described. The bill goes to second reading for detailed discussion of principles of the bill. Here
2

voting is does for continuation of the bill to further stages. From here bill goes to house
committee under committee stage where further discussion is done and amendments are made.
The bill goes back to house in report stage where changes made are considered and again voting
is done for last time as to process with bill or not. Here comes the third reading where amended
bill is considered to sent it to the other houses for approval (Nyoni and Hart, 2018. At this stage
no changes are made. The bill at the house goes through same procedure and if any amendments
are made it is referred back to first house. This process continues till both reach to same
approvals. The bill is presented to the Queen after approved by both houses to get final assent
and converts to a law.
Application of common law:
The decision of cases laws are the things which make common laws. It is presented in
court justice as indicating to the judgements of case law which has done previously in the present
lawsuit with same subject matter. Discretionary power which judge have for follow the ruling or
not when there is any mistake in the prevision decision which can be form omission of the facts
or wrong understanding of the law. Like Uber V Aslam case in which the decision of Pimlico
was referred.
Application of Statutory law:
Through act of parliament statutory laws are made which must be understood through the
help of environment which consist both internal and external environment aids such as hensards,
dictionaries (Keay and Iqbal, 2018). The laws must clear in its actual sense and there is no
question which judge can raise for any law and provision of a legislation. For decision a case the
relevant acts are refereed and then decisions are given. Pimlico case about the employment states
was checked with the provisions of employments rights act, 1994.
M1 Evaluation of effectiveness of the legal system regarding recent reforms and development
The recent developments in the legal system are taken from past 10 years in the justice
system as well legal structure of the UK. which can be stared as taking the power out of hand of
house of lords and forming Supreme court in 2009. In 2012 the college of policing was created
with replacing the local police authorities. In recent time use of alternative dispute resolution
(ADR) have raised shifting the concentration of people form litigation to various method of
ADR.
3

P3 Illustrating the impact of company, employment and contract law on business
Company law:
The law applicable to a business is companies law 2006 which requires a business to
form, run and dissolve as per the rules and provision of this act only. A non abidance with any
rule can get to a consequence of de registration of the name of company from the companies
house. This defines the legal status of the business, roles and responsibility of business as well
as its directors. The application was seen in the case of Salmon v Salomon where the company
was identified as a separate legal person distinct form its owners and members, with having its
own property, rights and obligations.
Contract law:
The contract (Applicable)act, 1999 is applicable to the businesses of UK. This act defines
the contract formation, it terms, capacity to contract, liability and obligation of the parties, terms
constructing the part of, under contractual agreement. This also outline the remedies which can
be taken for the instances for breach of the contract as facing legal charges, obligation to
complete the contract or even penalties and fines. Its application can be seen in the case of
Thornton v Shoe Lane Parking [1971], it was held that a contract is entered with a machine
accepting the money to give a ticket and it was held that the term is part of contract (Thornton v
Shoe Lane Parking [1971], 2018)
Employment law:
The laws related with employed applicable to a business are employment rights act, 1999,
Equality act, health and safety act, 1974. All the acts governs the relationship between employer
and employee. It defines the duties, responsibility and obligations both employees and employer.
In case it is not followed serious legal proceedings can be faced in forms of punishments and
fines. It application can be seen in the case of Pimlico plumber, 2018 where it was held that
when a self concentrator satisfies the condition of being an employee it must be given that status
with all the rights given to an employee of business.
M2 Differentiating between legislation, standards and regulations and identifying their potential
impact on business
The legislation forms by the parliaments are required to be followed compulsorily and it
must be interpreted with the legal aids. The regulations are the guidelines for application of the
4

law previously formed though the government agencies. On the other hand standard are defined
as set of certain quality standard that an organisation can meet and its application is voluntary.
D1 Critical evaluation of the legal system and law
The legal system and law can be critically evaluated as application of regulations and
legislation is compulsory and no one can raise a question over its applicability. Rather, applying
standers is voluntary and on the wish of a business. Like application of equity act 2010 is
defining that organization must treat every one equally. In its continuation the maternal and
paternal leave etc regulation, 1999 shows how inequity and discrimination should be avoided for
specific people in organization. On other side the standers related with giving maternity
treatment in business is on the discretion of the organization to follow or not.
P4 Legal formation of different types of business organisation
Sole proprietorship: is the easiest form of starting a business. In this organisation
structure, it is owned and managed by single person. The owners is not legally separated from
his/her business and enjoys all the profits generated from the business. The legal formation of
this business is that is not a registered business and do not require legal formalities. The owner is
responsible to meet all the financial obligations and debt of the business.
Partnership: business is another types of business organisation which is formed and
operated by two or more persons. As per legal formation it is not a registered business under the
law and required less legal formalities to fulfil. The profits of the business is shared among the
partners and each partners pays income taxon their earnings. The partners share all the
responsibilities and have unlimited liability. This means, all the partners are personally
responsible to meet the dues and debts for their personal assets.
Limited company: is that type of business which is legally formed and registered under
the company's Act, 2006. It is run sand operated through directors and mangers and it is required
to comply with many legal formalities (Hudson, 2017). This includes paying corporation tax on
the companies profit, to get registered, to file tax returns and many more. This type of business is
legal one and all the profits belongs to the shareholders. The company owns an identity of
separate legal person and is distinct form its owners and directors. Liability of all the inverters is
limited to the extent of their investment in the company.
P5 Management and funding of various form of businesses
Management of different types of business organisations:
5

A sole proprietorship business is managed by a single person who is the owners of the
business. The profits belong to individuals only so he/she pays incomes tax on it. There is no
requirement of any other legal person for managing the business such as auditors company
secretary.
The management of the partnerships firm is done by all the partners together. They all
share the different roles and responsibilities of the business. As business is not incorporated one
so no legal requirements are there to meet. So in this business legal authorities such as auditors
and CS are not needed.
The limited company business is managed by the managers and directors of the company.
The owner lose their ownership in business with its incorporation so they are not responsible to
manage the business. The directors are appointed in the Annual general meeting of company.
Along with this the auditors and company secretary are also appointed to see the legal
obligations of company.
Funding of different types of business organisations:
The funds for sole proprietary business is brought in by the owner. To raise the outside
fund is difficult as the shares are not offered to anyone (Griffin, 2018). The funds can be
generated by owners himself, family and friends. Rather, in the partnership business all the
partners bring in capita to start and run business. The funds include the saving of partners, stock,
retirement fund account and bods. They can seek to take loans ad advances from banks and
financial institutions. For the limited company funds are raised through internal sources such as
savings, funds form family and friends. The external sources include crowd funding, angle
investors, banks loans.
M3 Advantages and disadvantages of their formation
Sole proprietorship:
The pros of formation of sole trader business can be outlined as it is simple to starts, no
need have huge funds. The profits belong the owners itself. There is no need to pay taxes and
meet legal obligations. The data in this business are totally secure and high privacy is
ascertained. The decision making is fast and no conflict of thoughts and ideas as a single person
operates the business.
The Cons of this business are that the liability of the owner is unlimited as he might have
to pays the debts of business through his personal property. To raise funds form external sources
6

is a tough tasks the economies of scales is hard to achieve in his business and required to set
higher prices of product and services. Decision are taken by single person this can sometimes
lack effectiveness and expertise.
Partnership:
With formation of partnership business the advantages follows as no registration and
legal formalities are required to abide with. The funds are brought in by all partners so it is less
difficult to raise funds. The roles and responsibility shared among the partners so a single person
is not burdened with all of them. With more brains comes more ides and aids the decision
making process.
The disadvantages of forming a partnership business is that its existence is installable
which incudes lunacy, insolvency or death of the partners (Partnership – advantages and
disadvantages, 2018). The liability of partners is unlimited ad they might have to pay business
dues from their personal assets. More the partners more the chances of conflicts and delaying the
decision making process.
Limited company:
The benefits of forming a company is that it gets an identity of legal person which limit
the liability of the investors and shareholder of the company. The company can own proprieties,
assets and gets a right to sue other in this company name. The company enjoys the benefits of
tax planning through reinvesting the surplus for growth and future gains.
The drawbacks of forming a limited company is that it is required to pay corporation tax
on its profits and the owners do not have right over it. The founders lose the ownership with its
legal incorporation. It need to abide by many legal obligations and requirements. As a limited
company it can not raise funds through offering share to public.
D2 Critical review and evaluation of the different types of business organisation
The critical review of all the business can be done as the sole trading business is the
simplest form of business to form, run and operates as no legal formalities are required. Instead,
the partnership business is a bit different as it is owned and operated by two or more person
which may arise conflict in the view points and decision making process. Whereas in the
company business is the most difficult type of business to form as its requires lot of legal
formalities. Moreover, the sole trader and partnership businesses are not requires to pay taxes on
their profit rather a company is required to pay corporation tax. It gets a distinct identity of its
7

own as a separate legal entity rather the other in the other two business and its owners are treated
as a single unit.
P6 Identification and recommendation of appropriate legal solution to resolve two different
disputes through relevant examples
Case illustration 1: Line manager T of the ABC ltd told K who is an employee
designated as packer for loading lorries with goods more than defined quantity. K told I will not
do so and clearly stated that he can get injured and the good can be damages as well. T did not
listen to K and remained adamant to what he says and forced K to overload the lorry. Due to this
the lorry fell sideways and K injured hid back. What action can K take against T.
Legal solution: K can make a compensation claim against T for the damages suffered by
him under the tort of negligence. With the decided case law of Donoghie & stevanzan 1932, it
can be stated that an employer owes a care of duty towards his/her employee. A breach in that
due can make the employee liable and can make him to pay compensation for damagers
(Fowler, 2017). Here T owes a care of duty and the injury was foreseeable and K refused to the
same, still due the force of T, K got injured. Here K is liable to get compensation for his medical
bills, mental and physical injury suffered, form T and he can file a case against him in court.
Case illustration 2: The company KYC is facing certain financial issues in 2016 and is
not above to pay the salary of its employee. The management requests the employees to for go
their salary and accepted a commission of 10% of their salary for 2 years till the time company
retrieve its position back. All employees agree to same. They were not paid salary for 2016-
2017. In mid of 2107 the company bagged a huge government grant for its business and it
reached to a better position by the end of financial tear better than the previous growth. The
employee demanded the salary for 2017 and of the last year as well. The management of KYC is
refusing the same. Suggest a solution as both company and employees do not want to go to court
to solve the dispute.
Legal solution: Both the company and employee do not want to court under litigation,
they are advised to go for arbitration method of Alternative dispute resolution (ADR). Under
arbitration the arbitrator will take into account facts and evidences form both the parties and then
with the status law of the rights of employee of national minimum wages can pass an award
(Woolf and Chui, , 2016). This process is far informal, easy, less time consuming and cheaper as
8

compared to court proceeding and this is the best solution for both the parties to resolve their
issue without litigating.
M4 and D3 Comparison and evaluation of the different sources of legal advise and support
The comparison of both the legal solutions given above can be stated under the litigation
process the court is involved to solve the case and in the ADR method solution is given without
involving the court. Still, both them are legal under the law system and provide effective
resolution to the dispute. The evaluation of the legal advise can be done as for the case 1 K have
a right to go to court and file case against T for the injuries suffered by him due to negligence of
T. Instead under the case 2, both parties mutually agreed to not to go to court and they refereed
to arbitration to reach to decision without going to court. Both solutions gave effective remedies
for case one it is through court procedure of litigation and for case 2 it is outside the court which
is must fast and less expensive method.
CONCLUSION
It has been identified from the above report that the various sources of laws are act of
parliament, delegated legislation, EU directives and the case laws. The laws in UK are made
though the parliamentary procedure with getting accents from both the houses of parliament and
the Queen. The application of both common law and statutory have been identifies different from
each other. The employment, contract and company law has different impact on business and
these have been explained through examples. Furthermore, various types of business
organisation has been identifies as sole trader, partnership and company and all have a distinct
legal formation, management and funding. There pros and cons have also been outlined in the
report. Moreover, solution through legal and alternative dispute resolution method have been
given for two separate example, with critically evaluating the both.
9

REFERENCES
Books and Journals
Beatty, J. F., Samuelson, S. S. and Abril, P. S., 2018. Business law and the legal environment.
Cengage Learning.
Cartwright, J., 2016. Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing.
Fowler, S., 2017. Comparative Law for Spanish-English Speaking Lawyers: Legal Cultures,
Legal Terms and Legal Practice. International Journal of Legal Information. 45(1). p.62.
Griffin, P. B., 2018. The Notion of Good Faith in Common Law and Civil Law Contract Law.
Hudson, A., 2017. The law on financial derivatives (No. 6). Sweet and Maxwell Ltd..
Keay, A. and Iqbal, T., 2018. Sustainability in large UK listed retail companies: A sectoral
analysis. Deakin L. Rev. 23. p.209.
Morrison, K., 2019. HR Theory and Employment Law. In Management for Scientists (pp. 129-
145). Emerald Publishing Limited.
Nyoni, E. and Hart, T., 2018. The Concept of Limited Liability and the Plight of Creditors within
Corporate Governance and Company Law: A UK Perspective. InterEU law east: journal
for the international and european law, economics and market integrations. 5(2). pp.309-
322.
Woolf, D. and Chui, J. W. Y., 2016. English Vernacular Historical Writing and Holinshed’s
Chronicles. In The Oxford Handbook of the Age of Shakespeare.
Online
Thornton v Shoe Lane Parking [1971]. 2018. [Online]. Available through :<http://e-
lawresources.co.uk/Thornton-v-Shoe-Lane-Parking.php>.
Partnership – advantages and disadvantages. 2018. [Online]. Available through
:<https://www.business.tas.gov.au/starting-a-business/choosing-a-business-structure-
intro/partnership-advantages-and-disadvantages>.
10