Introduction To Business Law - Assignment

BUSINESS LAW

Table of Contents
INTRODUCTION ..........................................................................................................................1
SECTION 1......................................................................................................................................1
TASK 1............................................................................................................................................1
Parliament sovereignty................................................................................................................1
Main elements of law making sources of United Kingdom are mentioned below.....................1
Role of government in the law making process..........................................................................3
Study of Statutory and Common law's procedure in Justice Court.............................................4
Evaluating company, employment and contract law and probable impact upon business.........4
TASK 2............................................................................................................................................5
Given Scenario............................................................................................................................5
Explore the nature and formation of different types of business organisation...........................5
Explain the difference between unincorporated and incorporate business organisation on the
basis that how it is managed and funded.....................................................................................7
Explain the advantage and disadvantage of a company over partnership firm...........................8
SECTION 2......................................................................................................................................9
CASE 1........................................................................................................................................9
CASE 2......................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Law plays most important rule in society, it provides organisations people and business
entities guidelines. Acts & rules are to promote healthy environment, boost ethical follow-up in
relationship of producers and consumers. The difference to accomplish or not to achieve ultimate
goals, business is based on correct choices from legal point of view. It is generalised in two
categories which are public law that is conducted by government of country, it portrays
relationship between government and people of nation. Another one is private law these rules are
governed by private entities, ethics follow up laws like contracts, torts, business relationship,
property rights and many more focuses on business guidelines. In following study parliament
sovereignty, Royal queen speech, decision making sources of UK are discussed. The case laws
mentioned below are for better understanding circumstances of legal procedure in government
including other diversions.
SECTION 1
TASK 1
Parliament sovereignty
It is principle rule of UK mentioned in their constitution which makes parliament as their
highest legal division authority. It constitutes power to make as well as end a law, any law
created by parliament cannot be changed in future even the courts jurisdiction cannot change it.
Generally it is said that constitution of UK is incomplete or unwritten in nature but it contains
biggest division made by parliament i.e., statute law (Allen, 2017). The most auspicious day in
UK is Parliament opening every year where tradition and cultural rituals are followed from ages
in history of country. First thing during the opening of Parliament in October-November is Royal
Queen's speech called the”Speech from the throne”. It guides and provides an outline for new
policies, rules and programmes of government for current assessment year.
Main elements of law making sources of United Kingdom are mentioned below
Common law: These rulings and proceedings of common laws which should be defined
properly to create and make laws by common jurisdiction. This approach was started by kings
ruling era, here laws were created by kings and implemented in areas ruled by them. These were
later made as official laws which were to be followed by citizens of nation. Later such
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implementation of laws were implemented for following other case laws which were capable to
provide betterment of jurisdiction.
Legislation: It is powerful in nature to implement and categorise for betterment of nature
of laws, supreme body of united kingdom of making and following of case and nature of
concepts differ from act act. It provides following legislature to give proper guide for
categorisation and provide space for new amendments (Bayern, 2016).
European union law: The council of Europe was created in 1949 which was not
even the European union and much huge than the existing one. This convention consisted several
“articles” which were formulated for protecting human and government later made rules from it
of human rights act 1998 accumulated in domestic law. The sole agenda of creating this union is
to encourage and support idea of peace in countries as mentioned on the official website of
(ECHR) European union. It enact as members of state government and relates to several matters
from production, agriculture, legislation till law making procedures. The workings here is very
simple the council makes laws, ministers are elected by the people, who discuss them in
parliament and later commission executes laws or any new amendments. The sole purpose of
constructing union is to actively support countries in union and become globally dominant.
Economically having union gives active trek in global market to its all connected member
countries. Plus as a advantage strong competition to other countries worldwide. It vanishes the
border issues between the countries which provides positive flow of goods and services between
countries also benefits other areas such as environmental protection, relief in tax ratios,
performance security and makes betterment in investment sectors of business organisations.
European convention on human rights: The (ECHR) European union was created for
protection of humans through shield of human rights, attention to create it was generated after
the World war II (Backer, 2015). It provides protection to all the forty seven countries, some of
the rights provided by them are right to life article 2, liberty article 5, fair trail article 6, freedom
of thoughts, conscience and religion article 9, right to public assembly article 11, right to
education article 2. People who have issues with their European union membership these are
specifically created to help and provide support to people of nation. Anyone who was not
justified by judiciary convention act of human rights in UK should seek help and get remedy
from ECHR.
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Role of government in the law making process
The law making process in the united kingdom include steps and procedures to follow
before enacting it a Law. The draft laws have to be passed through two places which are House
of “Lords and House” of Commons. Later on it is approved by Royal Queen, then it is a made
an act in the parliament. A Bill is the explanation of the law that shall be proposed to the houses,
it can be a Private, Public or a Private member's draft. It is created by the government with civil
lawyers. The bill should pass through the steps mentioned below to convert a draft of law to an
Act in Parliament:
 First reading: It is first formal stage in process of making law by the parliament.
Basically, main-house heading of bill, its credentials, particulars and details mentioned
are read honourably in the 'House of Commons'.
 Second reading: The details of draft (law) are discussed, argued and debated at this
stage. The vital perspective of this bill(law draft) is keenly discussed at Parliament. Then
final agreement of keeping or discarding (law draft) bill is done by voting in favour and
non-favour by ministers of parliament. This decides either to continue this procedure or
not in addition this also represents the support of members towards party they want to
support appoint and represent at time of election for governing party.
 Committee stage: At this stage the bill is sent for valuation and to be passed on to
“House of Commons”for detailed inspection, verification, analysis, introspect and critical
evaluation. Any new changes or amendments in previous law which should be revised
and any addition in the current draft as-well because later it wont be revoked at any
circumstance (Bishara and Westermann‐Behaylo, 2012).
 Report stage: At this stage members of committee representing the bill with additional
amendments (if any) debate on more and more critical filtration process of draft topics
discussed in the “House of Commons”. The bill is harshly debated in house so that later it
wont be objected by opposition as well as the people. Priority to keep citizens in mind is
to provide better analysis and critically evaluate to forward bill for enactment in
parliament.
 Third stage: A short discussion or debate is made if any new things are to be added or
else the final voting is done. After voting in favour or non-favour is accumulated bill is
either passed or rejected.
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 House of Lords: The bill is sent to the House of Lords to pass through all the stages
mentioned above. Then again is send back to the House of Commons for the
considerations if any amendments made earlier.
 Royal ascent: The royal signature is the final step and the most essential stage it is
mentioned under the Royal Ascent Act 1961.In this process after the signature of the
queen (monarch). The bill is implemented and made into the acts of Parliament.
Study of Statutory and Common law's procedure in Justice Court
Statutory law: It is a formal body of legislation provided in written format, which
provides judgements made in the court rooms and parliament where the present existence of an
Act is discussed. The first consistent rule is to follow priority with perspective of judge which
makes every other civil case law differ in results. Their are plenty number of laws in history
which provides perspective which in present times help in resolving disputes.
Common law: It provides the power in the hand of the judge, the base creation is done
by the judges, court rooms and judgements passed. Its enlightening in nature and provides
guidelines to the parliament for the formation of new emerging laws (Forrer and Katsos, 2015).
The nature of these laws are undefinable and its differs in every new case. Looking from the
judicial perspective, there are plenty cases in history, being baseline for future cases reference.
Its also known as case law since, no official code or clause is mentioned to follow-up for ruling it
or implement at each case.
Evaluating company, employment and contract law and probable impact upon business
Company law: It regulates acts,laws and procedures that help functioning a corporation,
it compiles rights, relations and procedure of company's overall performance in legally correct
perspective. Having a whole new changes in laws and acts by parliament amendment after a
certain period of time involves changing workings of business, the procedures to perform
business and most importantly affect cost ratio of company. Plus it adds a lot of paperwork for
implementing changes and waste lot of time (Hansmann and Kraakman, 2017). As, plus point it
provides certain benefits as proper management, saving tax and mostly discipline in organisation.
Employment law: This law is the guideline for the relation between the employer and
the employee. It provides the rights of employee and defines the responsibilities on the employer.
It comprises issues such as discipline, harassment, equal pay, data protection, condition of
employment and many more. These rules and acts sometimes become a huge trouble for the
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companies, if not implied properly it can cost them on financial and professional levels. In many
cases where employee is in a spiral of baggage from company which is distracting basic general
terms, should seek help under this law to get outline for getting out of trouble.
Contract law: It defines legal agreement between two parties having common interest of
making profits and generating benefits. It protects both parties in case of breech by any party
through act of negligence, implementation procedure or UN-qualitative work (Hawkins, 2012).
The innocent party in contract can seek claim for their loss implying acts protecting them
mentioned in written at time of agreement. It's little money costing and time causing in nature,
but plus point of doing that it provides clarity in business framework plus it diminishes any
confusion and gives proper guidelines to both business entities.
TASK 2
Given Scenario
There are three friends Jane, Penny and Marie who have formed the JM Publishing which is one
of the partnership firm. They have been performing well within the market but still wants to
expand their business at a greater platform and for that they have been seeking for additional
amount of fund for expansion. There accountant have been advising them that how they can
expand their business at a greater platform by forming limited company. Now, all of the friends
are interested that what can be the major impact and how it can be managed.
Explore the nature and formation of different types of business organisation
The business organisation can be of number of types where it is totally dependent upon the one
or group of team that which area they are seeking for to invest their capital. Explanation about
various types of organisation are mentioned below with their way of formation:
Sole Proprietorship: The organisation which do have to perform any of the work at
very small ground for the purpose of earning profit is known as sole proprietorship. This types of
organisation are beneficial whenever people do have less amount of capital and still they want to
invest their money within any of the venture (Besley, 2015). This organisation do give lots of
benefit even at smaller ground. But, it is necessary to follow the complete procedure of
formation before starting the business activity. The requirement are very less and simple which
do starts with preparing the legal documents that who will manage all of the and what is the
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location of a company. Then, it is important that those documents should be deposited within
Companies House for keeping record.
Partnership Firm: This is the small form of business where liability is always unlimited
for the partners. Partnership firms do get the benefits to enjoy number profit as its is easy to
perform and even decision making process is also simple as compared to other form of business
organisation. This types of business can be formed when two or more then two people agree to
work together in future period of time. Although, firm doesn't gets the right to sue and be sued
one own name but still it is important that they must follow the process which helps them to form
the partnership firm (Hayden and Bodie, 2012). The legal process starts for the day when deed is
prepared by the partners. After that, it is important deed should be prepared according to the
partnership act and finally documents are needed to be submit within Companies House.
Public Limited Company: This is the form of business organisation which do get the
chance to issue there share with the market by taking the help of London Stock Exchange. It is
the most common form of business organisation within the premisses of UK, where number of
investor want to invest their money just for the purpose of earning profit in future period of time.
Public Limited Company do have the interest of public and because of that is becomes important
for any of this organisation they must share the information with their investor. The legal way to
incorporate the public limited company is:
 At least two shareholders should be there.
 Must be able to issue the share within the public of value i.e., £50,000.
 Must appoints the directors who should be individuals.
 Company Secretary is also required in it.
 Should be able to prepare Memorandum of Association and Article of Association for the
company.
 Then registration should be done within Companies House (Legal structures for
businesses - an overview. 2018)
Private Company Limited by share: This is the form of business organisation which is
owned by the member of a company. This types of business organisation is always easy to
perform and it even it is result oriented as well. The most important thing which is needed to be
understand in it is that it doesn't allow any of the member from outside. This is one of the most
suitable form of business because investor do enjoy after investing there capital because liability
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is limited which reduces the risk from investor. Although, shares cannot be given to the
outsiders, but still it can transferred to the family member which gives more flexibility to
investor. The legal process of formation of private company limited by share is:
 Firstly, name of the company should be selected with the total number of member who
will look after every single work (Murray, 2014).
 Then, there is the requirement of investor who must prepare the rules and regulation
which can help to take any of the positive decision for organisation.
 After that, it is necessary that company should be registered under Companies House.
Looking at the situation and demand of all of the partners, it will be better for all of the
partners that they should look for forming Private Company Limited by share in which they can
add the number of investor at the time of incorporation. As all of the three friends are willing to
add on the working capital, they will get the chance to do so. Even there liability will be also be
secured. So, it will be one of the perfect option available with the company.
Explain the difference between unincorporated and incorporate business organisation on the
basis that how it is managed and funded
Unincorporated business organisation: The business which gets the opportunity to
perform commercial activity at smaller ground is known as unincorporated business
organisation. This types of business is a perfect option for those person who want to invest their
money in business but at smaller ground.
Incorporated business organisation: The business organisation which has the ability
and fund both to perform any of the business activity at number of place just to generate more
revenue is known as incorporated business organisation (Munch, 2012). This is one of the must
suitable type of business because members do have to bear the risk up to the amount of
investment.
Difference between Unincorporated & Incorporated business organisation
Basis Unincorporated Organisation Incorporated Organisation
How it is managed? This type of business organisation is
has very minimum amount of legal
requirement which makes work easier
and even allows to do any of the work
The business organisation which
has to deals and fulfil all of the
legal requirements within the
specific time period required the
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by investor themselves. whole team to manage any of the
work. The member who are
included in this type of
organisation are: Directors,
shareholders, Managers and many
more.
How it is funded? Some of the available option to manage
the fund are listed below:
 Credit Card
 Introducing additional capital.
 Bank Loan is also one of the
available option (Swanson and
Frederick, 2016).
The sources which is available
with incorporated business
organisation to manage the fund
whenever there is a requirement
are listed below:
 Issuing share by taking
the help of London Stock
Exchange.
 Debenture is also the
available source.
 Peer to Peer lending can
be done.
Explain the advantage and disadvantage of a company over partnership firm
Number of advantage and disadvantage are available within both types of organisation
but still the thing which matters the most is related with where investor want to invest. But, they
must have the knowledge that what are those advantages and disadvantage before starting the
business activity.
Advantage
 Company enjoys the right of perpetual succession where does partnership do not enjoy it. Company can include the unlimited number of member where as it restricted in case of
partnership firm (Johnson, 2013).
Disadvantage
 Business handling process and its expenses are high but in case of partnership it is very
minimum which allows to complete any of the work easily.
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 It cannot be setup with the small amount of capital but in case of partnership firm it can
be easily setup at small amount of capital.
SECTION 2
CASE 1
Winding up: The process which defines that company is in last stage and it is important
to end the business activity is known as winding up. It is almost the stage from where it is never
possible for the company to recover because amount of liability is more then its working capital.
Winding process are of number of time which has been explained. Compulsory Winding Up: The process where final judgement is always given the panel
of judges is known as compulsory winding up. This process makes the enter only when
creditors do file the petition. Before filing the petition, it is necessary to understand that
creditors must file the petition to count if they are sure that the debt amount is more then
750 Pound (Van Koppen and et. al., 2014). After that, court has to find the facts that what
are the main causes that company is unable to clear the debt amount and if they fails to
give justification then they have to wind up their company. After that, liquidator is
appointed and they sell the assets of a company to do repayment.
 Voluntary Winding Up: It is easy process of winding up where member themselves
decides to close the company. Meeting is required to be conducted and after that it is
necessary that members passes the resolution which must not be less then 3/4th of total
number of member. Then, it is necessary that liquidators takes the charge and starts to
sell all of the assets of a company. In addition, article must be published in official
gazettes.
Process of Solving the dispute
Negotiation: It is one of the method which tells that how any of the dispute is needed to
be solved. Here, disputed parties themselves have to come together to solve out the issues. This
is one of the simplest way of clearing out any of the particular issues.
Mediation: This is also one of the popular way of clearing the dispute where parties
come together by appointing the person who gives the suggestion that how any of the problem
can be sort out. Mediator try to suggest disputed party that how they can come to the common
object where this problem can be easily sort out.
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Recommendation: This is one of the case where case can be easily sort without going to
court and for that it is necessary that creditors and Champion Ltd should take the help of
mediator who can advise them for solving the dispute related to default in payment.
CASE 2
Contract: It is the law which tells that two or more then two parties come together to do
agreements in some consideration is known as contract. This is the most important law for any of
the company because it doesn't allow to breach the terms and condition which makes work
easier and faster.
Injunction: It is the process in which court has the power to give the order to any of the
party that how they are required to work and what are those terms and condition which they must
comply with. In the given scenario, it can be clearly seen that Mr. Anderson is denying to
comply with rules and regulation (Nichols, 2012). It will be against the law if this case goes to
court. Here, they have the option that they can take the help of Alternative Dispute Resolution to
solve any of the problem.
Alternative Dispute Resolution
It is defined as the modern way and technique of solving any of the query or issues which
does arises on the company. This process in mostly uses in those situation where cases are of
civil nature. The main motive behind introducing this process is simple that headache from court
should be reduced so that they can give better judgement in some of the complicated cases. Some
of the ways under this process to solve issue are explained below:
Conciliation: The modern way in which conciliator has the duty to find the way, just to
reach near the terms and condition of a contract paper. This is one of the effective process
because work is not affected at any of the stage. Even best suggestion can also be given due to
terms of agreements can be met (Hawkins, 2012).
Arbitration: This is the way which is mostly used in the situation where cases are of
complicated nature but falls under civil case. It is said that decision of arbitrators are needed to
be followed as it does little bit of time to declare the judges but still, it is faster as compared to
court proceeding.
Recommendation: Mr. Anderson and Beta Ltd is suggested that they should try to
understand that if they will take the help of court then it will create number of problem for both
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of them so it is better for them to take the help of Arbitration method where all of the problem
will be solved by taking the help of legal proceeding and even cost will also incurred less.
CONCLUSION
According to above mentioned report, it liquidates concept of understanding business law
and provides that government of United Kingdom offer several remedies, laws and rectification
process in dispute. Acts provided in parliament, which is a sovereign entity are to shield citizens
from recurring unlawful circumstances and maintain loyalty in people of the nation. These laws
are balanced combination of safety for country's residents, plus these are created keeping people
in mind and generating laws which maintain faith of citizens towards judiciary in need of
situations as mentioned in case laws provided above.
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REFERENCES
Online
Legal structures for businesses - an overview. 2018. [Online] Available Through:
<https://www.nibusinessinfo.co.uk/content/starting-public-limited-company>
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