Key Sources of Laws for Business Organisations in the UK

Business Management
BMP4002 Business Law
Assessment 2
Report describing the key sources of laws
as the legal context for business
organisations in the UK
Submitted by:
Name:
ID:
Contents
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Introduction
This report talks about the framework of a business structure since a business structure
framework provides the basis of a business needs to configure with all the legal matters,
liabilities and the obligation of the employer and the employee(Kinderman, D., 2020). The
Company law. 2006 is the legislative tool which regulates the business organisation. In
English there is mostly four kinds of partnership so such partnership needs to be regulated
accordingly. And every such partnership is beneficial for different types of organisation. The
tax liability is different for different partnership. There is many formalities as to form a
director, duties and roles of such partners. After much deliberation, there is recommendation
for IOM Solutions as it is a Sole Trader but with such growth in business it must change its
course of partnership.
Businesses & Organisations in the UK
The first decision which an individual take is regarding the framework of of the
business structure. These framework determines the rules, regulations, duties, rights,
liabilities, financial structure and life span of the organisation. The choice of business
structure only determines that how the tax is to paid accordingly(Slorach, J.S. and Ellis, J.,
2021). Also, the administrative work applied is determined once business structure is
decided. The formation of a company only separates it from any other business or
organization. The nature of the company when the company is registered under The
Company Act, 2006 is that it derives a separate legal entity which has now rights and
obligations. This right and obligation gives company many authority as to get into a
contractual agreement, sue & claim damages in case of default, own properties, etc.
In English Law, The Company law, 2006 regulates the rules and regulations the company
must adhere too. The directors and the company must adhere to such provisions for the
smooth functioning and not to negate any legal requirements. There are many other laws
which regulate the companies in UK like the Corporate and Governance Act, 2020, The
Fraud Act, 2006, The Insolvency Act 1986, etc(Wevers, H., 2021). The process of event
where a transaction occurs with a third party is involved like the customers, vendors ,
creditors ,etc for economic and tangible value which results in increase or decrease in the
company profit is called the business transaction of a company.
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In a company there can be two liabilities like the vicarious liability and business liability in
negligence. The vicarious liability in English Law is a derivative doctrine from the English
Tort Law which states that the employer is strictly liable for any wrong done by the
employee. This doctrine of vicarious liability can be established if there is three essential
elements -
 Contractual relationship between the employer and the employee
 Negligence must be there
 This act must be committed during the course of employment.
The consequences of vicarious liability in ac company can be understood when the directors
of the company are to be held responsible for the deeds they have done as in capacity of the
company like the relationship of agent or principle(Giliker, P., 2018). Whereas the business
liability in negligence is when though taking all the said measures, there a lack in taking
proper care in certain conditions. Since, in English Law it is a tortuous liability so the
aggrieved can claim damages for both personal and property injury.
In any formed company, there is a director appointed who must fulfill the required duties,
roles and liabilities of the company. It is the duty of the director -
 To provide in the sheer interest of the company as it acts in a fiduciary relationship
 The company assets should not not be misused
 The directors should not disclose all the information of the functioning and
transactions of the company.
 The interest of company should be the sole and primary for the director.
The director is responsible for all the transaction like record of annual accounts, inform about
change in company's directors, address of registered office or any change in company policy.
The director of the company manages all day to day transactions, finances and comply with
all the legal faculties (Whelan, P., 2020). The director can be held liable if there is breach of
the fiduciary relationship, the director acts beyond the scope, misuses his powers or there is
error in providing care and caution. The termination of partnership is where the contractual
relationship of the directors are dissolved. In company Law, the dissolution of such a
relationship can be done by many means like-
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