Role of Law in Business Operations: Unilever PLC

This report discusses the role of law in the business operations of Unilever PLC. It covers different sources of law, the role of government in law-making, and how statutory and common law is applied in justice courts. It also explores the impact of contract, company, and employment law on the business of Unilever PLC.

Carters LLP

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
TASK 1............................................................................................................................................2
Describe different sources of law and the role of government in law-making and how
statutory and common law is applied in the justice courts.....................................................2
TASK 2............................................................................................................................................4
Discuss the impact of contract, company and employment law on the business of Unilever plc
................................................................................................................................................4
TASK 3............................................................................................................................................6
Discuss how different businesses are formed legally.............................................................6
TASK 4............................................................................................................................................7
Explain how the above businesses are managed and funded.................................................7
TASK 5............................................................................................................................................8
Provide specific examples of different business situations with different legal solutions.....8
CONCLUSION................................................................................................................................9
References:.....................................................................................................................................11
Books and Journals...............................................................................................................11
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INTRODUCTION
Law is a very vital component for the business to regulate the business operations in an
country. Each business is a bite with the numerous laws and practices to operate the business
activities in legal manner. Any business is mandatory to comply with the state and the federal
government laws and if not then that can lead to the serious consequences for the business such
as penalties, lawsuits or even the imprisonment (Partington, 2018). Each country has a different
legal system that comprises of the numerous amounts of laws and practices. The United
Kingdom has three separate legal system on the basis of their geographical areas among which
the common legal system is of England and Wales. The present report is on "Unilever PLC” a
Public limited company that is headquartered in London, England is a multinational consumer
goods company. The Company also follows the legal structure and the legal system of England
and Wales to operate its business ethically in UK. The following report covers the various
sources of laws, role of government in law making, impact of Contract, Company and
employment law on the business of Unilever PLC and how the different forms of businesses are
legally structured managed and funded. Moreover in report three different kinds of business
disputes are discussed with their legal solutions.
MAIN BODY
TASK 1
Describe different sources of law and the role of government in law-making and how statutory
and common law is applied in the justice courts
Laws are the basic set of rules and regulations that are developed and enforced by a country with
its government bodies. Laws are introduced to protect the rights of the civilians of the society
and to maintain the peace among the individual (Coffrin and et. al., 2018). The different kinds of
law in UK such as civil law, common law, criminal law, statutory law, religious law and mixed
law that design a whole legal system of the country. The sources of law are categorised into two
parts that are mentioned below:
Primary sources of UK law
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 Legislation (Act of Parliaments, statutory instruments, orders in council):
Legislations is defined as the declaration of legal rules by an authority. Role of
Parliamentary legislature is to frame new laws for instance, Act of parliament, or amend
the old ones. In UK, legislature may also delegate the power of law making to lower
bodies which are Orders in council, Bye Laws and Statutory Instruments.
Case Laws (decision of the higher courts to be abide and followed and lower courts): These
sources are “Judge-made laws” where judgements in a particular cases are recorded given by
Judge and subsequently act as a source of law when same issue or case arises. Judicial precedent
act as a guide when there is no legislature and decisions are made through the ability of judges to
make a difference between right or wrong (Thirlway, 2019).
Secondary sources of laws:
 Common Law and Equity: Equities are special source of law to England as this is
the case law developed by the Court of Chancery whose application is voluntary and
prevails over common law. Common laws were traditionally administered in the
King’s court and equity was developed as discretionary remedy with the aim of
ameliorating the injustice made by rulers of common law. Some example of equities
are Charities, trusts, probate and equitable remedies.
 Parliamentary conventions: They are commonly found in English Law system, breach
of these rules are regarded as breach of law, although they are not the strict rules of law
to abide. Generally Parliamentary govern the relations between the monarch and
parliament; and between Britain and its citizens.
Role of Government in forming these aforementioned laws
British Government plays a significant role in forming and implementing these laws and
policies so as to regulate the nation or to govern the people of a community. It acts as a guideline
for what is accepted in a society and absence of which will lead to the fight and quarrels among
people. These are the set norms which need to be followed by every citizen for right conduct of
behaviour and acceptance in a society. Government plays a pivotal role on deciding how and
what law should be made for managing the thing in effective and way running a nation with ease
and control (Tekula and Andersen, 2019). However without the consent of Parliament no law can
be formed and implement by a government. Parliament is a legislative body whose members
have been elected by the people for their interest and the prime objective of Parliament is to
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represent the interest of people and they are duly taken into account. Government collect tax
from public and decide how the money should be spent so that best public services could be
delivered. Government decides on numerous aspects such as:
 United Kingdom’s energy Supply and power generation
 The National Health Service
 The Police and Armed forces
 Welfare Benefits such as State Pension and housing development.
TASK 2
Discuss the impact of contract, company and employment law on the business of Unilever plc
Contract law of UK
Basically a contract is formed when the two individuals agree on common subject and by
communicating accept the offers of each other and draft it in the form of legal written document
that is enforceable in a court. In UK the English contract law is a law that regulate the contracts
in the England and Wales. The formation of contract contains of the following elements: Offer,
Acceptance, Consideration, Contractual intention and Form (Davies, 2020). They are the four
cases by which a contract can be bought be to an end. Expiration which refers to the expiry of a
contract as per the contract terms which is it has a fixed expiry date. Termination of contract for
breach of contract and other two are vitiation and frustration.
Impact of contract law on Unilever
 The contract law help the Unilever PLC in clearly stating the terms and conditions to its
clients, employees, partner's and stakeholders thereby eliminating the scope of
negotiation and speeding up the bidding process
 The most powerful and positive impact of the contract law in the business of Unilever is
it protects the intellectual property rights and prevent any misinterpretation of
communication and agreements thereby avoiding potential business disputes regarding
the contracts and litigation.
Company law of UK
The company law for United Kingdom also known as a corporate law is formed under the
Companies act 2006. The company law is divided into the two subject’s corporate governance
and corporate finance (Demidenko, Malevskaia-Malevich and Dubolazova, 2018). The corporate
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governance in the UK describes the duties and the rights of the shareholders, directors and the
employees of the organisation and corporate finance is for raising the options to get money for
the organisations for which there are the two methods equity finance that is a traditional method
where the shares are issued in order to raise the capital of the company and second is equity
finance that is getting the loans at the fixed annual interest from the banks to invest in the
business. The companies act impact the various areas of the corporate behaviour and the conduct
of a business such as in raising the funds, shares and securities accounts and audit of the
Unilever.
Impact of company law on Unilever
 The company law helps the Unilever in raising the funds through the securities by
investing in the IPO, private placements or the bonus shares.
 Impact of the corporate or the company law over the business of the Unilever is that it
helps the company in successful handling the problems like disputes, corporate
governance issues, issue but shareholders protecting the rights and the interest of the
shareholders employees and of the organisation.
Employment law of UK
UK employment act is developed to regulate the healthy relationship between the
employees and employers of the organisation. The UK employment act include the various rights
such as national minimum wage act 1998, employment rights act, pension act, health and safety
act, equality act etc. Any violation the employment law within an organisation in the UK gives
the right to the employees to claim or sued the company on the basis of employment tribunal
(Taylor and Taylor, 2019). It is very important for Unilever to correctly follow the rules and
regulations of the employment law of UK in order to protect the employees and workers welfare
and wellbeing in the organisation.
The employment law has both negative and positive affect over the organisation of Unilever.
 If there is the well versed implementation of the employment law within the organisation
of Unilever then it can create a good reputation of the firm in the market as it give the
employees a safe and a fair workplace to work there by retaining the large number of
employees.
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 If there is any misconduct towards the employees of the Unilever such as inequality,
discrimination etc. which violates the employment law of the UK then company falls
under the legal dispute with employees thereby providing damage and loss to Unilever.
TASK 3
Discuss how different businesses are formed legally
There are four major kinds of businesses in UK and each of have them have varied legal
structure and legal requirements to be formed in the country. The businesses are abided with
some legal formalities that are mandatory to be fulfilled for ethical and legal formation of the
business venture (Saba, 2019). The businesses have different taxation rules, liabilities and legal
requirement that make them unique and diversified from each other. The different businesses are
discussed underneath:
Sole trader: the sole trader business is operated and owned by the single individual and legally
are required to register the name of business under the HMRC. They have very less legal rules
and regulation. The sole trader is liable all the profits as a income therefore are required to pay
tax and national insurance under the self assessment tax return. The sole trader is also
responsible and accountable for all its losses and debts.
Partnership: the partnership business is formed by two or more individual that is bind with the
legal contract. There is mutual legal agreement between the partners which state the terms of
offer, share of investment of each partner and other terms relate to sharing of profits and losses
that both the parties agrees on. This contract is formed under the UK contract law. The tax is to
be pay by each partner as per the share of the profits and the liability of losses and debts is on
both parties (Trevino and Nelson, 2021).
Limited liability Company: the limited liability company is legally formed by the various
shareholders and then they appoint a director with the mutual discussion and decision making.
They have a limited liability as the losses are faced by every shareholder. They pay corporation
tax after which the profits are distributed equally among shareholders as a dividend. It has its
own legal obligations and rights.
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TASK 4
Explain how the above businesses are managed and funded
Management of the different businesses
Formation of business is not enough for the long term stability and to gain large profits
along with prosperity and productivity the businesses and their members are require managing
various functions and activities of the business for better performance. There are the various
departments in the business such as marketing, human resource, finance, operations etc. that
must be managed for the smooth functioning of the business. Managing a business also means
managing the organizational structure and daily operations of the company to ensure success. To
manage the business the owner or a manager should consider following mentioned points:
Set goals and objective: for the effectively managed organisation it must establish the goals and
objective hat provide vision to each member of business that what are they going to achieve in
the end. Setting goals helps in monitoring the performance and progress of employees.
Time management: this factor is important in the business management process as it is very
necessary to accomplish each and every task on time. The time schedule provides the direction
and momentum to the person for completing specific task before deadline (Sorokoletova, 2020).
Leadership: to manage the business it requires a leader that will lead and control the activities of
the business a effective and efficient leadership skills gives a successful business. leadership is
major factor for directing, planning, organising and controlling the business activities for the
successful execution of work.
Sources of funding
Personal investment: The personal investment is also known as bootstrapping where the
entrepreneur or a person starting a business invested its personal saving into business to gain
profitability. This is considered as a long term source of funds as individual is ready to take risk
by investing is personal saving into the business order to start or grow a business. The advantage
f this source of funding is it provides the owner a complete ownership of the business (Arora,
2019).
Venture capitalist: The venture funding is the source of fund for the big corporations where the
business require large amount to be invested by the capitalist into their business to grow or attain
a certain goal. A business has to create proper presentation and pitch to attract the venture
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capitalist for their firms. As venture capitalist invest in those business that provide larger profits
in five years of investment. This is time consuming process.
Debt financing: The fancy words used for the money through bank loans. Debt financing is the
most well known and common source of funding for all type of businesses. In this the individual
can acquire the required fund from banks through loans. There are sometimes when the
individual is requiring to be providing the bank with some collateral to get the loan. The bank
loan is always with some interest rate that is required to be paid periodically with principal
amount. Hence, it is simple and easily accessible source of funding (Briggs, 2018).
Angle investor: angle investors are the individuals that don’t disclose their names when they
invest in any business. The angel investors invest in that business those they find interesting.
Sometimes the friends and family are also angel investors. Angels have a angle investing
organisation where the people with more money register themselves for investing voluntarily in
someone’s business by reserving the right to monitor the management practice of organisation.
TASK 5
Provide specific examples of different business situations with different legal solutions
Over the period of time every organisation or a business has to face some kind of business
situation or dispute with their rival companies due to numerous reasons like intellectual property
issues, trading issues, shareholder and partnership issue, employment related issue etc. But these
business disputes have their legal solutions to resolve the issues and to create better relations for
future growth and prosperity (Menkel-Meadow and et. al., 2018.). There most commonly known
business disputes are: negotiation, litigation, mediation and arbitration. The below mentioned are
the three specific examples of business situation with different legal solutions:
 Interchange Fee dispute: The UK’s giant retail company Sainsbury’s faced the
interchange fee dispute with the giant credit card distributor MasterCard. The company
significantly follow on the damages claim against the MasterCard before the competition
appeal tribunal (CAT). Sainsbury’s stated that MasterCard is unlawfully charging the
high fees for the use of card payment service in the UK. To solve this dispute Issue
Company acquired the legal solution of litigation. Litigation is legal solution method
where the company uses the court and legal system by filling law suit to compel the
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opposite party to become part of solution. In case of sainsbury’s tribunal said that
MasterCard has infringed the UK competition law for which the Sainsbury was provided
with the sustainable damages.
 Intellectual property right dispute: There was the dispute between the top mobile
companies of the world that is Apple and Samsung where Apple filed a lawsuit against
the Samsung for copying the model of iPhone to create the galaxy models of Samsung.
There were the regular disputes between the two big companies for blaming on each
other for copying the ideas of models. To solve this dispute of intellectual property right
the company is decided not to include courts Instead of that use mediation legal solution
to resolve the dispute and to make strong relationship for the future. In Mediation legal
solution there is a mediator that helps the two parties to communicate and free conciliate
the disputes so that they can reach to the mutual acceptable agreement (Jenkins, 2021).
Mediator manages the communication process between the two parties by facilitating the
negotiation between the parties. The following business situation Apple was able to
successfully gain larger cost for the infringement of intellectual property rights by
Samsung.
 Labour dispute: Labour disputes are one of the most common problems faced by the
many organisations in terms of the equal payment or wage to the employees of the
organisation. For example the Asda the biggest supermarket chain of the UK face the
equal pay dispute from the workers. Because of the workers of Asda went on the strike in
order to acquire the equal pay within the organisation. Appeal in the Supreme Court
where the case was dismissed. So in order to resolve the dispute the company acquired
the arbitration legal solution where the arbitrator involved for the decision. The arbitrator
listen to the issues of both sides of parties and then reach to a conclusion to solve the
dispute between the two parties (Rapids, 2018). Asda also involve the arbitrator to talk to
their employees regarding the payment. The workers got the victory by getting equal pay
for their work within the organisation.
CONCLUSION
From the above information it is concluded that a business’s are abided with the legal rules and
regulations of the particular country to operate and perform the business activities effectively and
efficiently in that nation. A better understanding of the legal matters and improvisation of the
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legal system provides the owner or the manager of the organisation with a framework to set the
legal relationship between the organisation and its client’s, vendors and employees. There are the
different kinds of businesses with different legal structure that defines the taxations and liabilities
of the company. It is also analysed from the above report that every business faces a business
disputes with the period of time and those disputes are solved mainly with the legal solution like
negotiation or litigation.
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References:
Books and Journals
Arora, S., 2019. CROWDFUUNDING: A BUSINESS FUNDING OPTION. Journal of Capital
Market and Securities Law, 2(1), pp.6-11.
Briggs, R., 2018. Private Ordering in the Old Dominion: A Solution to Frivolous Litigation or
the Elimination of a Fundamental Shareholder Right. U. Rich. L. Rev., 53, p.297.
Coffrin, C., and et. al., 2018, June. Powermodels. jl: An open-source framework for exploring
power flow formulations. In 2018 Power Systems Computation Conference (PSCC) (pp.
1-8). IEEE.’
Davies, P., 2020. Introduction to company law. Oxford University Press.
Demidenko, D.S., Malevskaia-Malevich, E.D. and Dubolazova, Y.A., 2018, January. ISO as a
real source of funding. Pricing issues. In 2018 International Conference on Information
Networking (ICOIN) (pp. 622-625). IEEE.
Jenkins, J., 2021. International construction arbitration law. Kluwer Law International BV.
Menkel-Meadow, C.J., Porter-Love, L., Kupfer-Schneider, A. and Moffitt, M., 2018. Dispute
resolution: Beyond the adversarial model. Aspen Publishers.
Partington, M., 2018. Introduction to the English Legal System 2018-19. Oxford University
Press.
Rapids, E.G., 2018. businesses P., s.
Saba, C., 2019. Employment Law Violations. Am. Crim. L. Rev., 56, p.759.
Sorokoletova, M.A., 2020. MEDITATION: REALITY AND PERSPECTIVES. Annali d’Italia,
(11-3), pp.20-21.
Taylor, R. and Taylor, D., 2019. Contract Law Directions. Directions.
Tekula, R. and Andersen, K., 2019. The role of government, nonprofit, and private facilitation of
the impact investing marketplace. Public Performance & Management Review, 42(1),
pp.142-161.
Thirlway, H., 2019. The sources of international law. Oxford University Press.
Trevino, L.K. and Nelson, K.A., 2021. Managing business ethics: Straight talk about how to do it
right. John Wiley & Sons.
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