Legal Aspects of Business

Legal Aspects of
Business

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Question 1: Company Law.....................................................................................................3
Question 2: Employment Law................................................................................................6
CONCLUSION................................................................................................................................7
REFERNCES...................................................................................................................................7

INTRODUCTION
Legal Aspects is important while initiating a business in order to influence growth and success in
the future. It is vital to compare different possible legal business and choose among them which
suits the entrepreneur. There are three basic forms of legal business which can be chosen: sole
proprietorship, partnership firm and company or corporation. Further United Kingdom regulates
the business under the Companies Act, 2006 and employment relations through Employment
Legislation (Collins, Ewing and McColgan, 2019). The law regulates the business or entity in
accordance with the prevailing law keeping in view the changing needs. The report examines the
questions framed from the case scenario and advising on the legal aspects of the business.
MAIN BODY
Question 1: Company Law
Definition
Partnership: The Partnership firm is a profit making organisation comprises two or more
members. Partnerships are governed in United Kingdom by the Partnership Act, 1890. Under the
partnership firm partners are jointly and severally liable for debts occurring in the business as the
nature of liability is unlimited. Further differs from the Limited Liability Partnership, which is
established under Limited Liability Partnership Act, 2000.
Company: The Company in UK is governed by the Company Act, 2006 which describes as
legal entity formed to operate a business either in commercial or industrial capacity. The
structure of the company differs from sole proprietorship to a corporation, profit making to non-
profit making organisations. The company is considered as separate and distinct from its owner
due to the concept of separate legal entity (Salmon v Salmon & Co. Ltd.).
Comparison of Partnership and Company
The partnership and company both differs and their key differences are discussed below.
Legal Entity
A company adheres the concept of separate legal entity and is known as single legal
person, having own rights and responsibilities. Thus, able to formulate contracts through
directors or other members. Whereas in partnership, the individuals may commit partnership to
any agreement (Das, 2019). Thus, the partners are self-employed and can make decisions.
Liability