Business Law & UK Source of Law Assignment

BUSINESS LAW

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Explain what sovereignty means, give examples of why parliament is said to be sovereign
& discuss about the UK source of law...................................................................................3
P2. Explain the role of government in law-making and how statutory and common law is
applied in the justice Courts...................................................................................................4
P3. Use specific examples illustrate how a company, employment and contract law has a
potential impact upon business...............................................................................................6
TASK 2............................................................................................................................................6
P4. Explain the nature and formation of different types of business organisation.................7
P5. Explain the difference between incorporated and unincorporated businesses on the basis
that how they are funded an how they are managed on daily basis.......................................8
P6. Solve the given cases where valid recommendation is required to be given by involving
ADR process & also explain why to use ADR method.......................................................10
CONCLUSION................................................................................................................................1
REFERENCES................................................................................................................................2

INTRODUCTION
The law which discusses about the commercial department of an particular nation is
known as business law. This is law which has its own importance because it helps to manage
every sort of business activities. Even it is beneficial at the time of taking legal decision which is
required to be complied in any period of time within the organisation. This is the report which is
based on giving suggestions and recommendation that how any of the situations can be handled.
Here, sovereignty, process of passing the bill from different stages, different types of law will be
explained in detail. Then, suggestion regarding the formation of a company will be given that
how it is formed and who do manage it and finally given case studies will be discussed.
TASK 1
P1. Explain what sovereignty means, give examples of why parliament is said to be sovereign &
discuss about the UK source of law.
Sovereignty is defined as the supreme power which is available with only top authorised
department. It is that department which is never challenged by any of the person or department.
The decision which they take are always being assumed as right and suitable in context of a
nation. In context of UK, their parliament has that power and because of that they are being said
as sovereign body of Great Britain. Whenever any of the laws and regulations is needed to be
passed, permission is needed from parliament body (Singer, 2018). The decision which

Parliament do take is always right and formed for the welfare of nation that can bring out the
positive results in future. They are only one who takes any of the final decision at any period of
time. In addition, parliament is sovereign body in UK because they enforces the law and
regulations, they even changes if they themselves think it should be changed. Finally, they
decisions cannot be overruled by any of the department.
Parliament body has distributed the power among several hands so that chances of
problem and errors can be reduced and better environment can be created. All of this different
body has to show or put there equal effort to commence better laws and regulation for the
country. Information about this bodies are explained below:
Statutory law: This is the main body in UK which commences the law. To form any of
the law under statutory law, it is necessary that House of Commons and House of Lords should
take the participation because final decision are needed to be taken by them. Here, they firstly
draft the bill and then they pass different stage to make the which shows that it is one of the
effective source of UK law for commencing laws.
Common law: This is the source of UK for commencing the law and regulation. This
source is very effective because they do form the laws at the time of declaring the decision of
any of the particular case. Even this source is also known as case laws. Whenever they
commences the law to declare the decision, it is understood that it will be enforceable to whole
of UK from the immediate effect. This source is effective because it is also result oriented and do
covers the weaker section. In additions, this mainly emphasis on the doctrines and principles
(Boldt, Kassis and Smith, 2017).
Equity law: This is is one of the most significant source of UK of law because it is one
of the individual body which has the number of responsibility while commencing the law. This
source refers to legal principles and even it makes sure that laws and decisions can be harsh but
still it is important that decision should not be biased. It mainly maxims the rules of equity where
everyone is treated equally.
P2. Explain the role of government in law-making and how statutory and common law is applied
in the justice Courts.
The laws and regulations are needed to be commenced in any of the country but the
important thing which is needed to be focus is that they must be enforced only after checking
each and every criteria. In context of UK, political discussion within the parliament house plays

the crucial role for coming the new law or act. The first thing which they do before coming the
law or act, they passed the drafted bill from different stage just to ratify the errors which do
comes while preparing the bill. This bill has to be passed by both House of Lords and House
Common where equal steps are followed. The detail procedure about the steps which is needed
to be followed is explained below:
It starts with preparing the bill where political party has to see the situation and
requirement and they are needed to pass it in Parliament House.
First Reading: The first reading is the stage in which the bill that has been drafted has to
be given the name. The member gives the name by analysing the points which are mentioned in
the bill (Epstein, 2018).
Second Reading: The discussion on the points are needed to be done that how effective
they can be and what can be main purpose of commencing.
Committee Stage: This is the stage who has the role to be played in which they has to
think and decided that whether written points in the drafted bills are valid or not and if not then
what can be suitable one after doing changes. They mark the points which are needed to to be
amended and passes the bill.
Report Stage: It is said that report stage the crucial role to be played but it has to come
active only when changes in the bill is required and if there is no requirement, this stage don't
come into play. Member of report stage has the role to be played in which they changes the
points which are questioned by committee stage.
Third Reading: This is the last stage for House of Common to check every points of the
bill as after that they are need to pass it for the next process. The most crucial stage is third
reading because voting has to be done to find who are the member those member that are still not
satisfied from the bill must not be passed ahead. In this stage, if more then half of the member
agrees then bill is send ahead for next process.
House of Lords: The peer members has the role which they have to play and check each
and every points again in the same manner which House of Common do. If bill is passed from
different stage then it is sent for the final process (Voss, 2016).
Royal Assent: In this stage, just formalities are needed to be done by taking the approval
from the Queen. She has to just pass the bill by given approval. This process has to be followed
as per the guidelines of Royal Assent Act.

How statutory and common law is applied in the justice Courts.
In any of the nation, justice court has to play the crucial role because they are the one
who declares the result of any of the case. It is said that statutory law has a great importance
within justice court because here laws are commenced in which every detail are mentioned that
how it needed to be followed and who are required to follow. Even remedies are are also
mentioned whenever default is performed in it so that action can be taken against that particular
person.
Common laws are totally based on principle and doctrines just to cover the weaker areas
whenever there is the requirement (Terry and et. al., 2015). It is understandable that common law
can be applied only in the situation where judges don't have the option to take the help of
statutory law and in this situation judges do get the option to form the doctrine and principles do
declare their decisions within the justice court.
P3. Use specific examples illustrate how a company, employment and contract law has a
potential impact upon business.
All of the laws and regulation do have its own importance where it clear out the terms
that single or slight mistakes can create issues at any period of time. Number of laws do apply on
business organisation but the some of them are really important which are explained below:
Company law: The law which has been defined under Companies Act, 2006 is known as
company law. This is one of the important law because it guides the business to manage the
business activities in relevant manner. This law has its own importance because work load and
working style are easily managed. In context of business organisation, they need to follow it and
apply in every single business activity. It will allow them to built a better reputation within the
market and additional opportunity will be there to earn profit. In case where law is not applied
properly, various negative effect can be seen but the profit ratio will be decreased as number of
penalties will be imposed on the organisation. Even penalties might also be imposed.
Contract law: The agreement which is legal binding in nature and required to be
followed after entering into it is called contract law. This law has the part to be played within the
company because it gives the idea that work they are needed to work in any of the situation and
even it gives surety that in return something will be given to both the agreed parties (Haidt and
Trevino, 2017). Whenever company fails to follow contract law, organisation might have to

suffer because they will not be allowed to file the case if agreed party do give the consideration
things in return. Even chances will be high for not completing the given task on time.
Employment Law: It is defined as the collection of law and regulation that defines that
how should be relation of employer and employee. This law has the great importance in any of
the organisation because better and health relation between both employer and and employee's
do play the crucial role. This law says that what are those laws and regulations should be
followed within the company. For example: if anyone of the company doesn't follow the
guidelines of employment law then problems can be created and among the production and
distribution department will be affected the most because there will not be healthy relation
between both employer and employee. Even penalty will also be imposed on the company.
TASK 2
Given scenario
There are three friends Jane, Panny and Marie who have formed the partnership firm
called JPM publishing. They have been doing really well within the market but still they want to
do some of the improvement by expanding it. They want additional fund and for that they are
seeking the advice of their accountant who have been telling them to form a limited company to
perform better in future.
P4. Explain the nature and formation of different types of business organisation
Business organisation is defined as the commercial department which helps individual to
earn profit by doing any of the specific work. It is necessary because it encourages the person to
invest there capital in different areas (Forganni and Reed, 2019). Some of the types of business
organisation are explained below with its major process of formation.
Sole Proprietorship: The form of company which requires to perform at a very small
ground to generate profit is known as sole proprietorship. This types of business can be practised
only when person wants to work single handedly. The flexibility given to this sort of business is
much and more as compared to other form of business. The method of formation of sole
proprietorship is from the period when investor prepare the registration documents and submits it
to the Companies House. After the completion of registration process, business activities can be
performed.

Partnership: The form of business where two or more then two people are required for
performing any of the commercial activity is known as partnership firm. This type of business
are mainly of small in size but decision making process and working ability are much effective
then other form of business organisation. It is necessary to be considered by partnership firm that
total number of partners should not exceed more then twenty. The way to form the partnership
starts from preparing the contract deed where every single informations are mentioned that who
have got what types of responsibility (Bishara and Westermann‐Behaylo, 2012). All of those
documents are needed to be submitted within Companies House.
Public Limited Company: The form of business which do works at a bigger platform to
earn revenue is known as Public Limited Company. This types of business has got the number of
option to raise the capital from market and the major benefit which is available to public limited
company is that they can issue the share within the stock market as per the guidelines given by
the London Stock Exchange. The legal structure to form this type of organisation is:
 Company should have minimum two shareholders.
 It is necessary that company should be able to issue the shares within the market.
 Appointment of director is must where he or she should not have any sort of personal
interest within the company.
 There is the requirement of Company Secretary as well.
 Memorandum & Article of Association is required and all of the documents are required
to be deposited inside the Companies House (Legal structures for businesses - an
overview, 2018).
Private Company Limited By Share: The business organisation which is managed and
run only by its existing member is known as private company limited by share. Here, shares are
non transferable to the outsiders but option is available to distribute among the existing member
to there respective family member. The best thing about this organisation is that it allows the
investor to work freely because guidelines says that liability will be limited up to the amount of
investment. The procedure to form any of the private company limited by share is mentioned
below:
 Name of the business organisation is required
 List of member is also needed that who will be the part of company and what are those
responsibility which will be given to them.

 Article of Association and Memorandum of association is also required.
 SIC number is also needed while incorporating the organisation.
 Registration should be done within Companies House.
As per the wants and needs, it will be important for Jane, Panny and Marie to invest there
time in the business organisation like private Company limited by share because member are
limited and working environment always remains positive. Even they will have the option to
raise fund from various source and bank will be the major source among them. In additional,
there will be no burden on the investor because liability will also be limited (Forrer and Katsos,
2015).
P5. Explain the difference between incorporated and unincorporated businesses on the basis that
how they are funded an how they are managed on daily basis.
Incorporated businesses are those business organisation where number of people work
together for the common vision. The perform their commercial activity at a bigger ground and
needs to perform every single activity in ethical and legal way. Incorporated business have the
right to sue and be sued on the name of organisation because it acts as a legal person. This type
of business are commenced with the motive to work for the longer period of time.
Unincorporated business are the one who doesn't have to involve themselves much and
more in legal formalities and even it is easy to perform any of the task under this form of
business. This types of business are small in size and even perform any of the legal work is very
easy under it. Changes in the working policy of the business can create lots of issues for the
company.
Some of the difference between this types of company is explained below
Basis Incorporated Businesses Unincorporated Businesses
How it is being
managed?
This are the business business which
do requires Key Managerial
Personnel to manage every sort of
work. KMP includes directors,
managers, Company Secretary and
shareholders etc.
Investor themselves has to
manage every work from
registration to performing any
of the business activity.
How it is funded? This types of business can be funded This types of company can be

with the help of issuing shares,
debentures. Banks loan is available.
Credit Card is also one of the option
and peer to peer lending can be done.
funded by including personal
assets within the company,
credit card is also one of the
suitable option.
Discuss about the difference between company over partnership.
Advantage of a company over partnership firm:
 Company has the opportunity to expand its business at any period of time but same is not
available with the partnership firm (Besley, 2015).
 Company have the number of source available to raise the fund but in case of partnership
firm they have very limited resources.
Some of the disadvantage of a company over partnership firm is:
 Legal formalities in company is much and more as compared to partnership firm.
 Investment required in company is very high but partnership firm can be easily
incorporated with the help of limited amount of money.
P6. Solve the given cases where valid recommendation is required to be given by involving ADR
process & also explain why to use ADR method.
Case Study (1)
Champion Ltd and its creditors had the dispute with each other as company was unable to
pay the loan amount on time. The actual case was started when company have to shift business
address from one place to another due to the construction work. After shifting the business
organisation they never earned the profit which increases the ratio of debt. Now, creditors are
willing to file the case against company for its winding up.
Winding up: This is the process where it is understood that company is not performing
well and unable to pay out the debts amount of their creditors. This is one of the typical
procedure which is needed to be followed by those company who conducted the process of
winding up for doing repayment. There are number of ways under winding up process to
shutdown the business activities and they are: Compulsory Winding up and Voluntary Winding
up (Hansmann and Kraakman, 2017). In compulsory winding up, there is the involvement of
court proceeding and they decided how company is needed to be liquidate and who will have the
major priority to be paid the amount which is due. When it comes to voluntary winding up, it is

understood that it is the process of winding up where member of company themselves wants to
liquidate their organisation by passing the special resolution just to pay the debt amount.
Case Scenario (2)
In the following case Mr. Anderson CFO at Amber Ltd used to handle the confidential
files of the corporate and was essential member of it. Contract Agreement with Amber Ltd
specified twelve months notice amount clause of termination or resignation from each side.
Later, Beta Ltd. Competitor of Amber Ltd offered Mr. Anderson post of corporate executive at
their firm. Then, he gave notice of resignation stating that he's not happily content operating for
company, therefore desires to quit. Amber Ltd opposed him and recognise the contract clause of
operating twelve months previous notice. Additionally, justified to hunt injunction to avert man
Anderson to affix Beta Ltd or any of their competitors. Together, reminded that he has broken
his duties, contract amount of twelve months and broken code ethics of workers
Injunction: It is the situation in which special orders are given by the court that it is not
allowed to break any of the terms and conditions where agreement has been done. This is being
done just to protect the confidential information so that company or employee has to not suffer
from any of the issues at period time (Munch, 2012).
Contract: This is explained as the agreement where two or more then two person come
together to perform any of the specific task in return of consideration. If anyone enters into the
contract they are not allowed to breach it and if they do then legal action can be taken and even it
will be counted under breach of contract. As contract has been done between Mr. Anderson and
Amber Ltd and in case if they fails to perform their part of work then it will be counted as
breach of contract. Whenever breach of contract occurs there is high possibility that court might
take legal actions.
In order to solve both the cases, Alternative Dispute Resolution can be used which is one
of the effective way to sort out any of the minor cases.
Alternative Dispute Resolution
This is the process which is used for solving any of the cases which are not serious in
nature and even which can be solved out without involving any of the court. Alternative Dispute
Resolution has the potential to solve any of the case which is related to civil crime in nature. It is
necessary to be used because it do sort out the number of problem in very sort period of time and

even it doesn't force to spend more amount of money as it one of the cheapest way to sort out the
problem. Some of the ways under it to sort out the problem is explained below:
Mediation: This is the method to sort out the very minor level of problem where person
is appointed to take suggestions for solving the problem. This types of cases are solved by
understanding the points of both the parties and judging the points which may have raised the
conflict (Nichols, 2012).
Conciliation:This is also one of the option available for sorting out any of the problem
without going to the court. Here, the main focus is given by conciliator is that how they can help
out to solve any of the particular case by meeting out the maximum number of terms and
condition of a contract paper.
Arbitration: The method which is used to solve the cases that are complex in nature but
still which can be sort out without going to the court is known as arbitration. This types of
method is allowed to use only in those situation where cases cannot be solved by giving the
suggestion.
Recommendation for case 1: The case can be easily sort out by using the conciliation
method where major motive will be that how people can reach near to the terms and condition of
contract paper. Here, both creditors and Champion Ltd will need to think that how they can give
each another some time so that both of them can be satisfied and problem can be sort out.
Recommendation for case 2: As confidential information might be shared among the
rivalries company so it will be better to use arbitration method. In this method both disputed
party will have to follow the orders which are declared by arbitrator/s. This will helpful for both
company to find the exact solution of particular case.

CONCLUSION
It can understandable from the file that Parliament of UK has the sovereign power who
takes any of the decision as per the requirement of situation. It is important to understand the
importance of legal system because it makes work easier for taking the decision. Whenever any
one wants to incorporate the business organisation it is necessary for them to understand the
important criteria which is needed to be fulfilled. Every time it is not necessary that cases should
be solved by taking the help of court procedure because there are number of occasion where
cases can be easily solved using ADR process.
1

REFERENCES
Books & Journals
Besley, T., 2015. Law, regulation, and the business climate: The nature and influence of the
World Bank Doing Business project. Journal of Economic Perspectives. 29(3). pp.99-
120.
Bishara, N. D. and Westermann‐Behaylo, M., 2012. The Law and Ethics of Restrictions on an
Employee's Post‐Employment Mobility. American Business Law Journal. 49(1). pp.1-
61.
Boldt, D. J., Kassis, M. M. and Smith, W. J., 2017. Factors impacting the likelihood of student
withdrawals in core business classes. Journal of College Student Retention: Research,
Theory & Practice. 18(4). pp.415-430.
Epstein, R. A., 2018. A Common Law for the First Amendment. Harv. JL & Pub. Pol'y. 41. p.1.
Forganni, A. and Reed, H., 2019. Circumvention of Trade Defence Measures and Business
Ethics. Journal of Business Ethics. 155(1). pp.29-40.
Forrer, J. J. and Katsos, J. E., 2015. Business and peace in the buffer condition. Academy of
Management Perspectives. 29(4). pp.438-450.
Haidt, J. and Trevino, L., 2017. Make business ethics a cumulative science. Nature Human
Behavior. 1(2).
Hansmann, H. and Kraakman, R., 2017. The end of history for corporate law. In Corporate
Governance. (pp. 49-78). Gower.
Munch, S., 2012. Improving the benefit corporation: How traditional governance mechanisms
can enhance the innovative new business form. Nw. JL & Soc. Pol'y. 7. p.i.
Nichols, P. M., 2012. The business case for complying with bribery laws. Am. Bus. LJ. 49.
p.325.
Singer, L., 2018. Settling disputes: Conflict resolution in business, families, and the legal system.
Routledge.
Terry, N. and et. al., 2015. The Impact of Lecture Capture on Student Performance in Business
Courses. Journal of College Teaching & Learning. 12(1). pp.65-74.
Voss, W. G., 2016. European union data privacy law reform: General data protection regulation,
privacy shield, and the right to delisting. Business Lawyer. 72(1). pp.221-233.
Online
Legal structures for businesses - an overview. 2018. [Online] Available Through:
<https://www.nibusinessinfo.co.uk/content/starting-public-limited-company>
2