Business Law Assignment PDF | UK

Business Law

Contents
INTRODUCTION...........................................................................................................................1
Section 1 – Nature of legal systems and legislations impacting businesses....................................1
TASK 1............................................................................................................................................1
Discussing the meaning of this statement ‘Parliament is sovereign’ and analysing various
sources of UK Laws.....................................................................................................................1
Explaining the role of government in the law-making process and how statutory and common
law are applied in the justice courts.............................................................................................2
Illustrating how company, employment and contract law has a potential impact upon business
.....................................................................................................................................................4
TASK 2............................................................................................................................................6
Nature and formation of different types of business...................................................................6
Evaluating the differences between unincorporated and incorporated business referring to how
they are managed and funded......................................................................................................7
Advantages and disadvantages of a partnership and that of a company......................................8
Section 2 – Legal solutions to business problems...........................................................................9
Case 1...........................................................................................................................................9
Case 2...........................................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business law which is also known as commercial law is a set of various statutes, standards,
acts and rules which are given by parliament of United Kingdom. Business law deals with each
and every business activity and make sure to protect interest of relevant parties. This law has two
areas which are regulation of commercial entities such as partnership, company etc. and
regulation of commercial transactions. The main aim of this report is to build an understanding
about the concepts of business law by analysing two case studies.
In this report, various sources of UK law are discussed along with process of law making.
This report also includes justification about statutory and common law are applied to justice
courts. Along with determining the impact of employment and contract law, this report also
emphasise upon differentiating between legislation and regulations. Case studies are also
analysed in this report along with various discursive tasks.
Section 1 – Nature of legal systems and legislations impacting businesses
TASK 1
Discussing the meaning of this statement ‘Parliament is sovereign’ and analysing various sources
of UK Laws
“Parliament is sovereign”, this statements states that the legal power of Parliament in
United Kingdom is supreme which can create or end any law. Parliament’s authority in United
Kingdom cannot be overruled by any court. Every year the government of United Kingdom
announces its programme for legislation and these laws cannot be challenged by Court as it is
only can come to end by the act of parliament (Allen, 2017).
In order to further define this statement, it can be said that this legislative supremacy
cannot be challenged by any government institutions including both executive and judicial
bodies. Law in United Kingdom is controlled by the Parliament, but there are various sources by
which a law in UK can be developed. These sources are discussed below:
Parliament legislation: Conventions of Parliament are strict rules of law which cannot be
breached as it results in legal consequences. These laws are sourced by the acts of parliament.
The laws which are passed by the act of parliament involves discussions in House of Lords and
House of Commons. This discussion is based on the aim that the legislation must be effective
and should protect the interest of relevant parties. Each legislation of Parliament has its own
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website and some of the examples of these laws are Constitutional Reform Act 2005, Human
Rights Act 1998 etc. (Backer, 2015).
Common law: These legislations are sourced by the decisions of Senior Appellate Court.
This is an important source of law as it helps in preservation of rights of an individual. This
legislation can be better understandable with the help of an example. For example, court can pass
judgement of current case by reviewing the judgment passed in some previous case by this
interest of an individual can be protected against the state and the rule of law.
European Union law: Another source of law in United Kingdom is European community
which is a based and is a combination of European Treaties. These legislations are only said to
be binding in UK, when they are authorised by the government of UK or Parliament. European
Union law is an International law due to which various legislations are sourced in UK. Few
European treaties are:
The Treaty of European Union 1957,
The Treaty of Amsterdam 1997 etc.
European Convention on Human rights: United Kingdom is a Member State of the
Council of Europe. UK as announced themselves as a Signatory to the European Convention on
Human Rights. Due to this relationship between UK and the council, Human Rights Act 1998
come into force which was applicable in United Kingdom. This is the only statute which is
sourced from European Convention on Human rights.
The above sources have sourced various laws in United Kingdom. Even after having ample
sources of law, Parliament of UK has a supremacy of legal authority by the way of which it can
end any law sourced by a source. This supremacy is provided to Parliament for the objective of
disciplinary allowance of law in the nation (Bayern, 2016).
Explaining the role of government in the law-making process and how statutory and common
law are applied in the justice courts
Law making process is a combination of various steps by a which a bill is drafted and in
the end it is applied in whole state. This process is followed in the case of Parliament legislation
source. In United Kingdom, a law is passed through various steps. These steps involve
preparation of Bill, readings of bill and then delegation of that bill. In each of these steps,
government plays an important role which is mentioned below:
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Preparation and Drafting of Bill: In this first step, a bill is prepared by lawyers of
government and then drafted for consideration of the parliament. Various roles are played by
government in this step according to the nature of bill. For instance, if the bill is a pubic bill then
it will be prepared by the Cabinet. This bill is preceded by a Green paper. Examples of some bills
which later become a legislation with the help of government are Constitutional Reform Act
2005 and Criminal Justice Act 2003 (Besley, 2015).
If a bill is a private bill which is proposed by a public corporation or large public company,
then it is drafted by local governmental authority.
First reading: After drafting of a bill, first reading of that bill is conducted in Parliament
in which government plays a role of recording. Tittle and inclusions of bill are recorded by
government for further assistance.
Second reading: At this stage, government plays an important role. As in this step bill
debated on the grounds that whether or not this bill should be proceeding. Members of
Parliament which represents government of United Kingdom votes in favour and against of the
bill. Their role of cast a vote cause majority votes to win.
Third Reading: This is the last step of readings in which MPs which are representatives of
UK government cast their vote for the last time which decides whether the bill is going to be
accepted or rejected. After this, bill is send to house of Lords were amendments are done.
Royal Ascent: This is the final stage where a bill becomes a law. In the step, monarch
formally announces to approve the bill after which it becomes an act of parliament. Government
role in this step is that they develop statutory instruments so that they can be nationalised in
respect to the newly developed law.
From each step mentioned above, it can be said that government plays an important role in
the process of law making.
Common and Statutory laws
Common laws are the legislations which are evolved with the decisions of judges in courts.
On the other hand, Statutory law is a new legislation which is issued by the act of Parliament.
Both of these laws are applied in justice court.
In order to apply a common law, first research analysis is required to be carried out that
proceeds with locating the previous relevant cases and sentences or results passed in those cases
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so that reliable case law can be extracted. And after all this research, these cases are represented
as an example in front of court so that a common law or case law can be applied lawfully.
On the other hand, statutory laws are pre written legislations and they are just applied to a
specific case without any references of previous law. To understand both of these cases better, an
example is considered as follows. If a case is summoned in a court and in order to pass a
judgement, a similar case can be referred from past by the judge which is known as applying a
common law. On contrary, if a case is summoned in a court and in order to pass a judgement,
judge should follow relevant legislation sourced from act of parliament is applying a statutory
law.
Illustrating how company, employment and contract law has a potential impact upon business
Company law: In context of United Kingdom, Company law is mainly known by the statute
of Companies Act 2006. This law sets various rules and regulations which are applied to the
organisations which are registered as a company under this act. This law is a legislation which
has various regulations and standards which impacts registered companies of United Kingdom
(Bishara and Westermann‐Behaylo, 2012).
Employment law: This law is a set of various statutes regarding employees and their
interest. In United Kingdom, these acts do not only impact the companies but every business
organisation employing human resource for their operations. This law includes statutes namely
National Minimum Wage Act 1998, Working Time Regulation Act 1998 etc.
Contract law: This law is a combination of various rules and regulations which are related
with the contract which has been agreed between two or more parties. This law impacts
businesses and individuals involved in a contract.
Impact of company, employment and contract law on businesses on the basis of
legislations, regulations and standards:
Basis Company law Employment law Contract law
Legislations Legislations are the
legal acts or statutes
which are enforced
with the act of
Parliament. In case of
Company law, the
In case of employment
law, it includes
legislations related with
employees and
protection of their
interest. One of these
Contract law is a
combination of various
statutes including
Consumer Protection
Act and others. This
legislation impacts all
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statue which impacts
businesses of UK is
Companies Act 2006.
This act has its
potential impact on
businesses as it restricts
an organisation to be a
company unless all
formalities are fulfilled
(Forrer and Katsos,
2015).
laws are National
Minimum Wage Act
1998. This statute
impacts businesses as all
organisations has to
fulfil requirements of
these laws which results
in higher costs and
ample formalities.
the parties involved in
a contract which can be
business organisations
as well.
Regulations Unlike legislation,
regulations are the set
of instructions which
are mentioned in acts
or statutes which are
also referred as rules.
These regulations
include corporate
governance which
states every company
must fulfil their social
responsibility and a
company must be
audited every year
(Hansmann and
Kraakman, 2017).
Regulations are the strict
rules that must be
followed. Regulation of
this act is to follow the
minimum hourly rate of
remuneration to all their
employees.
Regulations of this law
are the rules which if
are not followed will
impact business
organisation. Basic
regulation of this law is
that there must be two
parties into order to
form a valid contract.
Standards Standards are different
from regulations as
these are the guidelines
which are required to
Standards are the
common guidelines. In
case of National
Minimum Wages Act,
Standards of this law
can be the guidelines
for a valid contract
which must be
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be fulfilled by an
organisation to be a
company. For example,
one of the regulation of
company act 2006 is
that a person must be
16 years old to be a
director of a company.
These regulation
restricts businesses and
impacts them in
negative way but
maintains a lawful
discipline (Hawkins,
2012).
few guidelines are there
must be no wage
discrimination in
business organisations
on the basis of gender,
age etc.
fulfilled. These
guidelines include that
a contract party cannot
be a minor, there must
be a free consent
between the parties and
also there must be a
lawful consideration.
These standards impact
a business as if any
standard is not fulfilled
by a firm then their
contract will be not
valid.
TASK 2
Nature and formation of different types of business
Three friends Jane, Penny and Marie established a publishing firm named as JPM Publishing
as a partnership Venture. After few years of trading, they are considering registering their firm as
limited company. Apart from limited company, there are other companies as well which can be
considered by this firm and their nature and formation are mentioned below:
Limited Liability Partnership: Under Partnership Act of United Kingdom, a company can
register itself as Limited Liability Partnership under which liability of the partners are limited to
the extent of their share in the firm. This type of organisation is unique in its nature, few of the
features of this organisation are mentioned below:
 LLP is a separate legal entity from its members or partners. This firm offers benefit of
limited liability to their members (Hayden and Bodie, 2012).
 This type of partnership must have at least two members and it must be registered to
Companies House.
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 This type of company has to fulfil all the written formalities which are applied to a
company.
Formation of LLP can be done with minimum of two members under a LLP agreement
which must be confidential and limited with its members. This type of firm is registered under
Companies House of United Kingdom with the view to carry a lawful business (Van Koppen and
et. al., 2014).
Limited Company: A limited company is an organisation which restricts the liability of
subscribers to the extent of their capital invested. There are various distinct features of limited
company which are mentioned below:
 A limited liability is an organisation which can enter into contracts on its own and is
allowed to retain any profits.
 Another feature of this type of organisation is that it’s structure acts as a firewall between
finances of a company and finances of its owners.
 This type of organisation can be limited by shares or guarantee.
Company can be form on the basis of structures which are limited by shares and guarantee. A
limited company can be registered through Companies House UK by paying filing fee. After
this, company must get approval from Companies House about its proposed name and should file
all annual documentation requirements which are corporation tax returns and their general
information.
Limited Partnership: This type of organisation is a combination of both general partnership
and limited liability partnership in which one partner of this firm has unlimited liability, whereas
other partners of this firm has limited liability. This form is famous in United Kingdom, few
features of this structure are mentioned below:
 Two types of partners, incorporate this firm which are limited and unlimited partners.
 Limited partners have limited control over business of partnership like they are not
usually involved in day to day operations of business but are partner in profits.
This type of organisation is formed by gaining a unique name after approval by Companies
House UK. To form this company, name and signature of every partner is required along with
the amount invested by every partner (Swanson and Frederick, 2016).
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Evaluating the differences between unincorporated and incorporated business referring to how
they are managed and funded
Basis Unincorporated Businesses Incorporate Businesses
Meaning An unincorporated business is a small
enterprise which is privately owned by
few people.
An incorporated business is a
separate entity which has its
own corporate rights.
Managed As these organisations involved few
people so it is managed by its members
or owners only. Examples of
Unincorporated organisations are sole
proprietorship and general partnership.
In case of incorporated
organisations, these firms are
managed by different level of
personnel. There are managers,
leaders and other employees to
manage these businesses
(Nichols, 2012).
Funded These organisations does not involve
large funds due to which they are funded
by owner’s capital, short term loans of
banks, investments of owner’s friends
and family etc.
These organisations require
huge amount as the operations
of these firms are large. These
corporations are funded by
long term loans of banks,
equity, debentures, bonds etc.
From the above comparative analysis, it is clear that incorporated and unincorporated
businesses are different from each other and has distinct ways to manage and fund themselves.
Advantages and disadvantages of a partnership and that of a company
Jane, Penny and Marie are in a partnership firm and planning to incorporate as a company.
In order to suggest these partners, advantages and disadvantages of both the organisations are
mentioned below:
Merits and Demerits of a partnership firm
Advantages Disadvantages
This company does not have any legal
requirements to get it registered.
There are limited sources of funds in case of
partnership and after at some point of time all
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of these sources will be finished.
Partnership firm can attain tax benefits by
complying few paper work.
Liability of this partnership firm is unlimited
which means all these partners has to pay from
their personal assets in case of intense losses.
Merits and Demerits of a limited company
Advantages Disadvantages
Limited company offers limited liability to its
members by which existing partners will not be
liable to pay anything other than their invested
amount (Johnson, 2013).
There is no tax benefit provided to limited
company.
All three partners can enjoy perpetual
succession advantage along with a unique
identity of their business.
Formation of a company is complex and t
requires ample formalities which must be
competed in order to get registered.
From the above analysis, it can be said that Jane, Penny and Marie should form a limited
company so that they can acquire multiple sources of funds.
Section 2 – Legal solutions to business problems
Case 1
In the given case, a UK based company Champion Ltd has shift its site from North London in
consideration of some money which is paid by the premier league club to make place for
development of new stadium. But this change effect the company in adverse manner as its
customers get reduced. Due to this, such company has defaulted in payment to banks for loans
taken during relocation. Some creditors are threatening the company for apply for its wing up
petition.
Winding up may be defined as process by which a company can be dissolved if an
application is filed either by the company itself or by its various creditors. In the process of
dissolution, a liquidator is appointed to sales all the assets of the company and use such
realisation to pay the to the the creditors of the company (Murray, 2014). There are two methods
of winding up an organisation, which are as follows:
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 Winding up by the order of court: In this type, court plays an important role in the
process of wing up of the company. If winding up procedure is started by the court then
court also gives the direction to appoint the liquidator to settle the winding up process. In
this, creditors role increases in convincing the judges that company has not able to pay its
debt to various creditors. After that, if court satisfy that creditors have genuine reason
then it gives order of dissolution of company and Other name of this method is
compulsory winding up. The requirements of under such types are as follows:
◦ In this, it is mandatory that an organisation has unable to pay its debt of at-least £750
or more.
◦ The responsibility to file the petition is on the hands of creditors of an organisation.
◦ If all the proceedings of the court is goes in the favour of creditors then court shall
give winding up order.
 Voluntary winding up: In this type, voluntary winding up may be done if board of
directors of an organisation decided in the meeting that company has no longer able to
pay its debt. For voluntary winding up, firstly company has to informed such issues to its
shareholders for taking the acceptance of its shareholders in general meeting. In general
meeting, voluntary winding up is resolved only if ¾th or more shareholder are agreed in
favour of company (Munch, 2012). If a resolution is passed in the general meeting then,
following steps shall be taken:
◦ A individual is appointed as a liquidator by the shareholders in general meeting that
has all the authority regarding the company's assets and liabilities and all future
business operations.
◦ Copy of resolution shall be submitted to within 15 days to the government of a
country in which is such company is incorporated.
◦ Company shall also require to publish such information in at least one news paper and
its website within 14 days.
Related case law: Ebrahimi v Westbourne Galleries Ltd
Facts: In this case, Mr. Ebrahimi and Mr Nazar were shareholder of the company. They both
transfer the share to the son of Mr Nazar. Thereafter, Mr. Nazar and his son decide to remove
Mr. Ebrahimi from the company. For this, Mr Ebrahimi filed the petition to the court for winding
of company due to his removal.
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Judgement: in this case, House of lords decided that Mr. Ebrahimi is a quasi partner of company
so company shall be wound up and Mr. Ebrahimi should receive its his capital interest.
In this case, Champion limited shall required to convince the creditors that it is not the
right solution for obtaining the money due. Few ways by which such company can solve such
disputes are as follows:
 Entity is required to understand the issues of creditors and provide and shall arrange
the compromising process between company and its creditors.
 Company may arrange an meeting with its creditors and convince them to give
some time period for making arrangement to pay such dues.
Case 2:
In the given case, Mr. Anderson is a CFO with Amber Ltd, having access to highly confidential
information of such company and Mr Anderson and company both required to give 12 months
notice period before resigning by the such person or removal by the company respectively. But
such person gives notice to the company for its resignation and immediately stop working after
end of may which due some settlement of arrangement. Mr Anderson resign to join another
company which is Beta limited.
Contract: It is an arrangement which is legally enforceable by the law (act). It assist the
company in various business dealings which it has done with various parties. Due to this, no
party in the contract shall allow to leave the contract and if any party does not do according to
the term and conditions, then as per the contract, it is liable to some penalty action.
Breach of contract: If one party to the contract revoke any condition of such contract then it is
said to be a breach of contract. If an person found guilty of contract then various legal penalties
shall be impose on such person as stated in the related law.
Related case law: Jones v Andrew
Facts: In this, Jones and Andrew made a contract, under which Jones performs some task. In
return, Andrew gives him £800 as part payment and fails to pay remaining amount under the
contract. Therefore, Andrew filed an petition in the court.
Judgement: In this case, court decided that Andrew has breached the contract. Therefore, it is
required to pay full amount and also it is required to to pay additional amount due waste of time
and delay in payment.
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CONCLUSION
From the above report, it has been concluded that business law is a concept which overlooks
all the corporate affairs of every business organisation. In above report, various cases are
analysed in order to better understand the concept of commercial law. It is observed that there
are various sources by which a legislation can be procured such as act of Parliament, common
law etc. These sources are concluded to be the supremacy power in United Kingdom. It is also
observed that an unincorporated business is different from an incorporated one and all the
business forms has distinct identity based on their features and formation procedure.
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