Business Law and Legal Concepts

This assignment delves into the multifaceted realm of business law by examining various legal concepts and their implications across diverse sectors. Topics covered include data protection in cloud computing, legal considerations in occupational therapy, intellectual property rights, and the legal framework governing international business practices. The document also explores the intersection of law and technology, particularly in areas like the Internet of Services and the evolving legal landscape surrounding digital platforms.

LEGAL ASPECTS OF
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Pros and Cons of principals of limited companies of UK.......................................................1
TASK 2............................................................................................................................................5
2. Procedure of compulsory liquidation and its implications......................................................5
CONCLUSION................................................................................................................................8
REFRENCES...................................................................................................................................9

INTRODUCTION
At the initial stage of business, owners needs to be look at legal aspects of business which
able to influence for future growth. For the same purpose they have to follow rules, regulation
and policies which are imposed on them as per provision of law. Single person is able to run
business organization which is called as sole proprietorship. It is simplest form of structure
which is easy to form and easy to dissolve (Pozgar, 2011). Cited firms are considered as separate
legal entity, perpetual succession and common seal. As they have to follow systematic procedure
for liquidate company. Compulsory liquidation is having impact on directors and creditors of
limited companies of UK. There is no influence of government of UK on such type of
organization.
TASK 1
1. Pros and Cons of principals of limited companies of UK.
Sole proprietorship are considered as private companies which having separate legal
entity, perceptual succession and common seal. There is no role of government of UK on these
types of legal premises. Organization having different personality then its members. On the other
hand, organizations are able to conduct transaction with their own name. No other companies can
use the name of another firm (Kinicki and Kreitner, 2012). Owner have to follow rules and
policies which are imposed on them as per the provision of law. After specified time owner
needs to obtain registration for firm. Through this they can sued others and be sued by others.
There are various principals mentioned under law regarding functions and activities of limited
companies.
Case : Salomon v Salomon, 1897, in the present case Salomon is the person who owned sole
proprietorship. After sometime he transferred firm into company. He engaged in the business of
book making company which is incorporated by Salomon and his family. Furthermore, such
transfer required some charge which is needs to be paid by owner at time of incorporation in
form of specified number of shares and debentures. Such debenture consists floating charge.
Through which they secured are secured against debt. Lots of debts are company unable to pay
and for this reason it goes into liquidation. At this all assets of company are released off and paid
entire debts or liabilities. Also provide required amount of payment to all shareholders and

debenture holder. As per the provision of law Salomon who is the owner of company charge
amount which is secured for claims of unsecured debenture. With the help of liquidation process
no amount is being recovered by company. Liquidator try to avoid alligation which are imposed
on firm. In the present case two liquidator and company are act as principal and agent. Liquidator
perform function as agents and organization perform as an principal. The person perform as an
agents is appointed by company at the time of liquidation who play important role in same case.
According to the case of Salomon v Salomon the case has been filed against Salomon
who hold majority of share. Through which is personally liable to pay all debts wh8ich are
imposed on him (Hertrampf and Piedad-Pascual, 2012). As per the provision of law cited firm is
the separate legal entity and perceptual succession. As a majority shareholder owner hold
unlimited liability and he is liable to pay entire debts of company.
With the help of corporate veil, members are able to identify actual financial performance
of company. Existing employees and other members request to conduct such activity which is
beneficial for entire firm. They all are responsible to pay debts or liability which are imposed on
them. As all are responsible to follow rules and policies as mentioned provision of law. Through
the process of lifting of corporate veil all relevant information or data revealed off which is able
to maintain financial position of company in international market. On the other hand,
government has been cleared the situation that such process is able to conduct only in some
situations (Weske, 2012). For example- concealment as well as evasion. But these rules are
considered as exception for this rule.
In the end of present of tribunal held that there is no pierce the corporate veil which is
against the rule of Salomon.
On the basis of above information and explanation it has been concluded that the
effective process of piercing of corporate is considered as exception in various situations. On this
ground it is not able to exhaustive. Current case Salomon v Salomon is the best example of
separate legal entity, perceptual succession and common seal. In this situation various factors are
involved in this process which consist different and rules, regulation and policies.
Prons and Cons of principals of limited liability of organizations in UK.
Limited liability companies are stands for in which members are only liable to pay
limited dents which are imposed on them. They are liable for the debts equal to amount or share

which they are hold of the company (Weske, 2012). Shareholders are responsible to pay amount
as equal to the actual rate of share which they hold. As they are liable to pay debts or liability at
the time of liquidation whether it is compulsory or voluntary. They are personally liable for the
amount which are holding by them. There are various advantages of limited liability
organizations are as aligned below-
Separate legal entity- Companies having separate entity other their employees or
director. The legal entity of firm is not effect with the resignation and removal of employees.
With the help of this legal status company is able to enter in contract with companies through its
own registered name (Pearson and Benameur, 2010). No other firms are able to use name of
another companies. But they do so then government imposed penalties equal to the amount
mentioned under law. On the other hand, if company becomes insolvent then itself considered as
bankrupt but not its members. Through companies are able to maintain their performance and
perpetual succession.
Reduce personal liability- The basic advantage of limited liability is members are only
liable to pay debts which are imposed on them or shares which are hold by them. According to
provision of sole proprietorship single is having ultimate control over entire operation of firm. So
that, he is personally liable for all acts which is performed by company.
Professional legal status- At the time of incorporation of firm is considered as legal
entity. Company is able to maintain their performance and legal status as well. These are strictly
monitored which having complex accounting and management as well (Lopez-Tarruella, 2012).
With the help of this process companies are able to attract large number of customers also
receive opportunities to increase profit margin.
Efficiency tax- Owners of limited companies are responsible to pay tax approx. 19%. this
specified rate of tax is lesser then other companies. Also government provide some special tax
rebates to them. With the help of this, limited firm are able to receive better return which are
helpful for them to attain their long term as ell as short goals and objectives (Cardoso, Barros,
May and Kylau, 2010). They have to pay tax equal to amount mentioned under provision of law.
Higher salary to worker- If limited companies not paying tax then they can save profit
and provide better rate of remuneration to employees. Have to remuneration to directors equal to

the amount defined by National Insurance Corporation in order to keep maintain their
performance.
Build trust- From the stage of incorporation of firm, respective company is able to create
professional image in international market. With the help of market image companies are able to
build trust among people in order to attract them and receive better amount of profit as well.
Managers and leaders of limited companies are needs to ensures that company comply with rules
and regulation which are imposed on them. Brand awareness in international market is possible
if company able to build trust among people.
Investment- In limited liability company consist large number of members. For the
purpose of hold shares members have invest amount of money. Members who purchase share are
called as shareholder which are of two types such as equity shareholder and preference holder.
On the other hand, members who purchase debenture of company are called as debenture holder
(Kertesz and Varadi, 2014). They receive dividends and interest for the same respectively. Firm
is bound to follow rules, regulation and policies which are imposed on them. Through this
process company is able to increase investment and market share capital as well. Large firm
having greater lending opportunities then sole proprietorship.
Protect company's name- After incorporation, owners have to registered their name.
Furthermore, company conduct transaction with its own name with using name of its members or
other firm. Limited firms are responsible to registered their name in order to protect name after
this no other companies can use the same.
Disadvantages of limited firms-
Extra cost- After incorporation owners needs to registered their firms with paying non
refundable fees. Registration fee is the compulsory payment which have to be paid by them. As it
is considered as extra cost.
Complexities- Incorporation and registration of company is considered as complex thing.
Entire employees and other members are responsible to record each and every transaction. They
comes is the contract with other firms and have to record the same.
Record keeping- Each and every transaction which is conducted under company are have
to record by members (Pattynama, 2010). Which is the time consuming process for them.

According to the provision of law it is considered as compulsory process. Responsible to conduct
such activity which is important for the purpose of smooth functioning.
Number of worker- Sole proprietorship firm is incorporated by single person. On the
other hand, company have to recruit required number of employees as specified in [provision of
law. For the purpose of dealing in tax affairs they also appoint accountant.
Follow restriction- Government of UK imposed some restriction on companies regarding
selling and distribution of goods and services. They are not able to import goods from another
country higher then the rate specified in law (Kolk and Van Tulder, 2010). Restrictions are
imposed on firm regarding appointment of employees and follow rules as well.
Notify to government- There are certain information which needs to be notify to legal
authorities by the members of company. This is compulsory process which needs to be
conducted by firms.
TASK 2
2. Procedure of compulsory liquidation and its implications.
According to section 124 of Insolvency Act, 1984, when company is going to end and its
assets are being realised off in order to pay debt, further situation is called as compulsory
liquidation. The effective decision of liquidation process is taken by government and implement
in business organization. For conduct this process limited liability companies are able to appoint
person who is responsible to realised off assets and pay all liabilities. Person who is responsible
to for such acts is known as liquidator. Organizations appoint person who having required
qualification, skills, knowledge, experience etc. in such field. After this firm is being dissolved
and not able to conduct further transactions (Baumgartner and Ebner, 2010). For the same
purpose the petition has been presented by creditors who owns the payment of company. The
effective decision which is provided by high court in the situation when entity is failed to pay all
its debts. After revealing such decision firm have to follow the same and not able to deny with
this as well.
Procedure of compulsory liquidation is as follows-
Receive notice- Panel is responsible to take such effective decision regarding
compulsory liquidation (Weber, 2010). Panel consist various number of people who are

connected with legal authorities. They have to take decision in group meeting which consist
various number of people which are as aligned below-
 One representative of government.
 One representative of company
 One independent person.
 Various other members.
Above mentioned members are able to take decision regarding compulsory liquidation if
firm is failed to pay its entire debts. They prepare notice and regarding the same and provide
notice to company.
Consult- After receiving notice one representative of company consult with panel.
Person needs to selected with the help of voting and decided on the basis of majority of members
(Dimond, 2011). They conduct meeting with panel and clear other things as well.
Appoint liquidator- This is the first step of every company after receiving notice to
appoint liquidator. If company is failed to appoint liquidator then government conduct same
process on behalf of firm. Person who is responsible to released assets in order to pay entire
liability. Such having power to check books of account and other financial documents of
company in order to complete his requirement. For his efforts he received some amount which is
called as liquidation commission (Poort, Rutten and Van Eijk, 2011). The rate has been defined
by government. So that, company is responsible to pay commission equal to the amount
mentioned under provision of law. He play an significant role in compulsory liquidation process.
Released assets- At the time of compulsory liquidation of firm. If company not having
enough balance to pay debts then liquidator conduct process of released assets and pay out debts.
Through this whatever the profit amount they receive, paid out liabilities and make payment to
shareholders and debenture holders.
Pay liability- Payment of liability is the main reason for company of compulsory
liquidation. Furthermore, liquidator needs to provide preference to their preference shareholders
and creditors. After that if some balance is still remaining then they have to make payment to
equity shareholders.

Provide information to legal authorities- All books of accounts of organization are
needs to identify and provide relevant information or data to government. This is important
process for every firm which is mentioned under provision of law.
Consult with members- Shareholders are considered as real owner. So that, members
have to provide proper information regarding compulsory liquidation to them. In meeting they
pass special resolution and take decision with majority number of members (Vernadat, 2010).
Also responsible to take effective decision in order to solve problems. This meeting is considered
as face to face interaction with members.
Legal notice- If members are able to take final decision regarding compulsory liquidation
then they have to present notice in official gazette. With the help of this process local people
easily aware with this.
Implication of compulsory liquidation-
Compulsory liquidation is having impact on the performance or work quality of directors,
senior members, creditors and other members who are financially connected with company. At
the time of this process, companies are responsible to take effective decision in interest of
directors and creditors and protect rights of them as well. Through this process firms are able to
take reasonable step which is beneficial for them to attain their target and objectives as well.
While this process creditors are able to find funding as well as new business. Regarding this
companies are able to take effective decision. At this time directors, employees and other
members are have to comply with rules, regulation and policies which are imposed on them.
Further, members are responsible to attend each and every meeting which are held by companies.
Implications of compulsory liquidation on director which are as follows-
Attend further meetings- Decision regarding compulsory liquidation are need to be taken
by company in board and other meetings. So that, directors have to attend meetings and take
reasonable step as well. This is the face to face interaction of all members in order to present
their views, ideas, information and much more. Through which directors are positively
contribute in framing in plans and strategies which is helpful for firms. Directors are responsible
to present their views and ideas. They can also able to resolve problems or conflicts.
Receive amount- At the time of compulsory liquidation company provide compulsory
payment to directors. If there is lack of finance or firm not having enough balance to made

payment of directors then they have to compromise. If certain amount is still remaining after
payment of creditors and shareholders then they have to pay amount to their directors.
Advice to other members- Directors are the backbone of every company. As they having
proper knowledge about position of company in international market. So that, if other members
are consult with directors then they provide proper information to them regarding position and
provide bets possible advice to them as well.
Stop transaction- Entire transaction conducted directors of the company. As they
significant role in existence of firm. After receiving final decision regarding liquidation they
have to stop transaction.
Receive relevant data or information- The effective decisions regarding compulsory
liquidation is taken by government. Therefore, in case legal authorities required any further
information or data regarding company then they can do so. Directors of each and every
organization are play important role in this process.
Restrictions on directors- There are number of restriction have been imposed on
directors. Directors are not able to reveal specific information which are related to financial
position. If companies are failed to paid their debts then at time directors are equally liable for
the same. They are responsible to provide data and information which are related to assets and
liabilities.
Implications of compulsory liquidation on creditors which are as follows-
Creditors are the members of organization. At the time of compulsory liquidation
company have to first select creditors on the basis of priority. These are the members of the
entity who invest in the same (What Is Business Law? - Definition & Overview. 2017). But in
case firm not having balance to make payment to creditors then they having right to file case
against firm.
CONCLUSION
On the basis of above report, it has been concluded that sole proprietorship is the legal
body which is incorporated by single person. There are various rules and regulation which are
imposed on them. Limited liability companies having separate legal entity, perpetual succession
and common seal. Effective decision regarding compulsory liquidation is taken by government.

REFRENCES
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In Services Computing (SCC), 2010 IEEE International Conference on (pp. 602-609).
IEEE.
Dimond, B.C., 2011. Legal aspects of occupational therapy. John Wiley & Sons.
Hertrampf, J.W. and Piedad-Pascual, F., 2012. Handbook on ingredients for aquaculture feeds.
Springer Science & Business Media.
Kertesz, A. and Varadi, S., 2014. Legal aspects of data protection in cloud federations.
In Security, Privacy and Trust in Cloud Systems (pp. 433-455). Springer Berlin
Heidelberg.
Kinicki, A. and Kreitner, R., 2012. Organizational behavior: Key concepts, skills & best
practices. McGraw-Hill Irwin.
Kolk, A. and Van Tulder, R., 2010. International business, corporate social responsibility and
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Online
What Is Business Law? - Definition & Overview. 2017. [Online]. Available
through:<http://study.com/academy/lesson/what-is-business-law-definition-
overview.html>. [Accessed on 25th July 2017].