UK Corporate Law and Governance

The assignment reviews various aspects of UK corporate law, including statutory laws formed by Parliament, common law formed by judge precedents, and their impact on businesses in the UK. It discusses the legislative authority of Parliament to form and break any law in the UK, as well as the role of shareholder rights directives and stewardship codes. The document also examines employment law under the Coalition government, securities laws, social regulation, diversity management, and mental health laws. Furthermore, it touches upon business ethics teaching in the UK, Europe, and the USA, and explores the implications of the GDPR for businesses. This comprehensive review is essential for students, professionals, and researchers interested in UK corporate law and governance.

Business Law

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1. The meaning of ‘Parliament is sovereign’ and the various sources of UK Laws...........1
Sources of Law in UK: ....................................................................................................1
1.2. Role of government in the law making process. How statutory and common law are
................................................................................................................................................2
Applied...................................................................................................................................2
TASK 2............................................................................................................................................4
SECTION 1............................................................................................................................4
Responsibilities of Director are as follows:............................................................................4
Health and Safety regulations.................................................................................................4
Equal Opportunities regulations.............................................................................................5
General Data Protection Regulation (GDPR).........................................................................7
SECTION 2............................................................................................................................7
Legal powers of creditors and the processes for liquidation..................................................7
The possibility of getting the injunction.................................................................................7
An alternative legal solution based on a different legal framework.......................................7
..............................................................................................................................................7

INTRODUCTION
Business Law refers to legislation that govern the dealings between people and
commercial matters. This report discusses about how business law is applied to the running
company and its impact on operations and decision making. It discusses the nature of legal
systems and various sources of Law in United Kingdom.
TASK 1.
1.1 The meaning of ‘Parliament is sovereign’ and various sources of UK Laws
Sovereignty of Parliament is the main feature of United Kingdom Parliamentary system.
This implies that British Parliament has the authority to make any laws and these legislations
would not be challenged in any court of law. The term Sovereignty refers to Supreme power or
authority and thus, making Parliament the legal authority in United Kingdom which can make or
break any law. UK's constitution is wholly uncodified and partially written form and does not
exist in a single text like other countries of the world (Block-Lieb, 2016).
Parliament in United Kingdom has developed laws to limit the sovereignty of Parliament like:
 Decision to establish UK Supreme Court in 2009 which limits the function of House of
Lords.
 Passing of the Human Rights Act, 1998.
 Entry of United Kingdom in European Union in 1973.
 The devolution of power to other bodies like Scottish Parliament and Welsh Assembly.
Sources of Law in UK
The term sources of Law refers to origins of these legislations and rules that bind any
state to govern its territory. Sources of Law in the United Kingdom is as follows:
 Acts of Parliament/ Legislation: Constitution of UK is unwritten, so most of its elements
are written in Statutes, which are enacted by parliament. The most important pieces of
Legislation are Acts of Parliament. There are following most important Acts of
Parliament:
◦ Bills of Rights, 1689 which imposed limitations to the power of Monarch and stated
that Parliament should meet regularly.
◦ European Communities Act 1972 integrated EU law and legal system into domestic
law.
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◦ Human Rights Act, 1998 incorporates European Convention on Human Rights into
domestic law. International Court: United Kingdom is subjected to international law obligations and it
has signed many international treaties and conventions. These legislations or treaty does
not have any impact over the Parliament supremacy. Further, if any treaty is signed by
the government that require changes within domestic law, then Parliament has the
authority to change it by legislation. European Union: It refers to the system of law operating within member states of EU
and it is based on rule of law. United Kingdom is the member state of European Union
that implies, any action taken by the EU is applied on treaties of European Union
members. It is divided into two parts i.e. Primary and Secondary. Treaties are the bases or
ground rules for all EU actions. Regulation, directives and decisions are the secondary
legislation, derived from objective and principles put within the treaties.
 Common Law: It includes body of unwritten constitution which are based on case law
implanted by the courts. Common law influences in the decision-making process in cases
where the outcome cannot be determined on existing statutes. They are the important
sources of key legal principles in relation to preservation of rights that each individual
has against the state and rule of law.
1.2 Role of government in law making process and the way statutory and common laws are
applied
Legislation are created by Parliament as it has the supreme authority to create or end any
law within United Kingdom. Acts of Parliament is applies to all the four countries of UK. The
other legislative bodies like Scottish Parliament, Northern Ireland Assembly, Wales Assembly
can pass laws only on devolved matter which is applied in their countries. Parliament consists of
House of Commons and House of Lords (Chiu, 2016)
House of Commons is a emblematic body, the members of which are elected in every 5
years through general election. House of Lords is neither elected and nor they are the
representative body. Members of HOL are life peers appointed under the Life Peerages Act,
1958. Stages of law making process and role of government is as follows:
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 Bill: Bill is a proposed law which is introduced in the Parliament and it is drafted by civil
layers on instruction of Government. The idea for new law can be arrived from variety of
sources like; The influence of a pressure group, Through an election manifesto promise
or Influence of people on certain issues like Women Empowerment, Child labour. Any
Member of Parliament can prosed a Bill. First Reading: This is the formal stage and Bill is introduced and along with the content
that Bill has is read within Parliament. In First Reading, Bill is been put before House and
after introducing it went for publishing. After this introduction it passes onto Second
Reading. Second Reading: At this point, floor of House principles are considered and MP's have
access to the details of bill. Along with this, they have a chance for a wide range of
discussion on a Bill's merit. Committee Stage: Examination of Bill in detail by Standing Committee which is made up
of 18 to 25 MP's. The importance of Bill depends upon the number of times Standing
Committee meets. For example; important government Bill may require six-week period
or around 10-12 meetings. Report Stage: It is known as the Consideration Stage as if there are any amendments,
there will be requirement of Report Stage. Third Reading: This is the last stage in which amended bill is included. Further, if the
government has a majority, then Bill is been passed to the House of Lords.
 Royal Ascent: In this process, the monarch formally signifies assent to the bill so that it
becomes an Act of Parliament and law of the land.
Application of Common Law:
Common law is a body of legal rules that are made by judges as they issue rulings on
cases. It is not similar to laws made by the legislative assembly or in statues. The use of
Common law by federal courts is limited to deciding federal cases. These precedents to be
applied in the decision of new cases are determined by the presiding judges. Juries are the
people's protection against the arbitrary power of the ruling class and a judge cannot direct a jury
while making any law .
Application of Statutory law:
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All Acts of Parliament are' statutes' which are outlined as a rule or regulation of society,
usually enacted by the legislative body. Statutory law provides rigid and formal interpretation of
the law and it dose not apply easily in all the situations (Burchell, Kennedy and Murray, 2015).
TASK 2.
SECTION 1.
Responsibilities of Director are as follows:
Company directors are responsible for the management of their firms. The companies Act
2006 sets out the several statutory duties of Directors. These are:
 Director of Company is required to comply with the organisations constitution and
decision made under this constitution he/she can exercise the powers only for the reason
for which they are given.
 To act in a way that directors consider is most likely to promote the success of company
for benefit of its members as a whole.
 Director need to be diligent, careful and well informed about the companies affairs.
 The director should try to avoid conflicts between his/ her personal interest and those of
company (Hepple, 2013).
Health and Safety regulations.
The Health and Safety Act, 1974 is the primary part of United Kingdom legislation
describing the duties and responsibility of employers regarding health, safety and welfare at the
work. The main aim was creation of one-on-one comprehensive system of regulatory law
covering Health and safety in UK. The Health and Safety Executive is responsible for enforcing
the act. The law is imposes duties on importers, suppliers, contractors, designers, and
manufacturers of substances and articles used at work.
Duties owed by Directors of JPM Ltd towards their employees are:
 Director must ensure the health, wealth and safety of their employees and others who
may gets impacted by their business.
 Employer of JPM must asses the risk in the workplace and make employees aware about
these risks and how they will defend them by providing training to handle the risk.
 Ensures security of employees in relation with the transport, usage, and storage of the
articles or items (Greene and Kirton, 2015).
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 It must consult employees on health and safety issues and ensure safe maintenance of the
place of work.
 It is required that Directors of JPM Ltd must keep and update a written Health and Safety
Policy which is formulated in conjunction with the Act (Tombs, 2013).
Governing Authorities:
Earlier HASWA 1974 created two governing authorities The Health and Safety
Commission and The Health and Safety Executive (HSE). On April 1st 2008, the two authorities
integrated to form the HSE and their role of Health and Executive Safety are:
 It ensures that government departments, employers, employees and representative
organisations are kept informed on health and safety matters.
 HSE anticipates, identify and prepare for new or changing risks in the workplace. They help in preventing death, injuries and ill-health in the workplace and enforces health
and safety rules.
Responsibilities of Directors:
Boards of Directors of JPM Ltd are accountable for providing a good corporate
governance and perform the given task by establishing corporate objectives and targets by taking
strategic decisions on all business issues including safety and health Management. To ensure
good practices are to be followed at workplace, team must determine workplace safety and
health management. A proper safety and Health training should be given to directors so that they
can become comfortable with their responsibilities. The directors of JPM Ltd must understand
their role and legal responsibility to govern safety and Health for their business as they are one
who authorise the activities. They must uphold core values and setting good health and safety
standards (Hudson, 2013).
Prosecutions of Directors:
Directors of JPM Ltd may be prosecuted under the 2005 Act for failing to manage safety
and health in their undertaking. In Section 80 of 2005 Act it provides that Director may deemed
to be guilty of neglecting their duties for Health and Safety at workplace.
Equal Opportunities regulations.
Equality Act came into force on October 1st 2010 and the primary objective of this law is
to encourage the identification of discrimination, victimisation, sexual harassment, etc. and to
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eliminate them. 116 separate pieces of legislation were combined together into one single Act.
The act provides equal opportunities to all and a legal structure to protect the rights of
individuals.
The Act states that no individual has the right to discriminate any person on the basis of
these protected characteristics which are; race or skin colour, age, physical or mental disability,
sexual orientation, religion or political opinion and marriage or social orientation.
JPM Ltd has a legal and moral responsibility to ensure that all the staff members of
company along with them The Board of Directors and Management must be comply to Equality
Act, 2010.
Responsibilities of Board Of Directors of JPM Ltd are:
The Board has primary legal and moral responsibility for ensuring that there is no
discrimination of any individual within company. It has the responsibility for the approval and
monitoring of the Equality and Diversity Policy and the spirit of policy is promoted and
respected at all times by every individual within JPM Ltd. The policy should be reviewed once in
a year by the directors to ensure equality is perpetually given priority into all aspects of
employment. Employer of JPM Ltd has the responsibility to protect employees at the workplace
and remove all barriers to individual development. Further, it should maintain and promote the
environment that appreciates diversity. They are liable for observation of individual behaviour
and should take necessary steps if there is evidence of bullying, favouritism, victimisation or
harassment (Klarsfeld, Ng and Tatli, 2012).
Responsibilities of Board Of Directors in case of disability:
It is unconventional to discriminate against disabled people in the field of employment
recruitment and provisions of goods, facilities and services. Directors of JPM Ltd must provide
equal opportunity to enter employment and progress within the organisation. It must comply with
legislative requirement in relation to disabled people. Directors are responsible to provide
consideration and selection of disabled candidates and to satisfy their needs of training and
development.
Implementation of Policy in JPM Ltd:
 The policy must be communicated to all employees through trainings, team briefing or by
displaying notice on the boards and should explained to all job applicants.
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 The policy must be monitored by Directors or the Senior Management Team to ensure
that no discrimination is occurred within organisation.
 Employer of JPM Ltd must take optimistic action to encourage particular group people to
apply for job and provide them with assistance so that they can fulfil certain vacancies.
 It should implement a strong system to deal with complaints of discrimination if arises
within organisation. The bullying and Harassment at work procedure should be followed
to deal with these complaints.
General Data Protection Regulation (GDPR).
The General Data Protection Regulation standardises data protection law across all 28
European Union members and imposes strict new rules on controlling or processing of
personally identifiable information (PII). GDPR is applicable to all organisation who holds and
processes EU's residents personal data, irrespective of their geographic location. The purpose of
GDPR is to impose a uniform data security legislation on all European Union countries, so that
each member state no longer needs to write their own Data protection Regulation (Zarsky, 2016).
Role and Responsibilities of JPM Ltd Director:
Every member who works within JPM Ltd has some responsibility for ensuring data in
relation to publishing articles must be collected, stored and handled appropriately. The unit
which are responsible for handling personal data should assure that it is processed and handled in
a line with data protection principles and according to GDPR. The ultimate responsibility of
Boards Of Directors of JPM Ltd is to ensure that company meets its legal obligations (Lockwood
and et. al., 2012).
Once a data is breach has been identified, the organisation may be required to notify both
the Information Commission Office (ICO) and the individual who is the holder of that data. ICO
has broad investigation powers including service of production orders and the exercise of search
warrants. To take on the leadership role, board members must have real knowledge of GDPR
and reasonable level of expertise. Directors need to focus on the cybersecurity issues that impact
JPM Ltd. Further, personal experience and interaction with policies and system that deliver
cybersecurity.
Director needs to take effective steps to comply to the General Data Protection
Regulation which are:
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 Designation of Data Protection Officer in JPM Ltd as there is a day-to-day and organized
monitoring of information for publishing content on big scale.
 Director should follow the guidelines provided by GDPR and should do encryption of
personal data this will help in ability to ensure ongoing confidentiality and help in testing
data regularly (Tankard, 2016).
SECTION 2.
Legal powers of creditors and the processes for liquidation.
Liquidation is a formal way to wind up a registered company under the circumstances
when a firm is not able to meet their financial obligations. There are three types of liquidation
which are as follows: Voluntary Liquidation: It starts from resolution of Companies director and Shareholders
where shareholders decided that they want to wind-up a company hold by them. It will
get enforced the moment decision for liquidation is been made. Member's Voluntary Liquidation: An MVL is a formal way to wind up a solvent
company in this case firm have enough money to repay all it's debts. The hearing for
winding up will be held in court and liquidation is carried by qualified practitioner.
 Compulsory Liquidation: In this process creditors of a firm applies to the court to force
a debtor company into liquidation. Court can make a winding-up order forcing a firm to
undergo process of liquidation after the filing of petition by creditors. A petition to
liquidate an organisation can be put before courts for numerous reasons but the most
common is that the businesses is unable to pay its debts (Kraakman and Hansmann,
2017).
In case of Champion Ltd Compulsory Liquidation will apply as the creditors of
company are threatening Directors for winding-up process. The presentation of winding up
petition has serious consequences for Champion Ltd. Creditor can recover the debt initially by
issuing a claim but after the claim Champion Ltd is not able to repay it debts then the creditor
can present a copy of petition on Champion Ltd and in a due course of time give notice of the
petition in London Gazette (Mason and Harrison, 2015).
Champion Ltd has 7 days to either pay the debts in full, pursue an arrangement. There
will be hearing in the court where company has power to oppose the petition or engage in a
dispute with the creditors if the debts are questionable.
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Appointment of Liquidator:
After, the making of Liquidation order, the Official Receiver is initially appointed by the
court as liquidator. Champion Ltd, a registered insolvent practitioner can appoint any individual
to act as a liquidator. The powers of Liquidator can only be used with the permission of the
creditors or liquidation committee. Powers of Liquidator are:
 Take or prevent legal actions relating to the property of Champion Ltd.
 The liquidator will have to continue the business to benefit the creditors of Champion Ltd
as may be necessary.
 They should bind or compromise with creditors about their debts of Champion Ltd.
 The insolvency practitioner will sell all assets of Champion Ltd and collect money owed
by their debtors to firm. It will distribute funds to all the creditors and repay the leftover money to Equity
shareholder of Champion Ltd.
Creditors power:
Unsecured creditors are paid on pro rata basis at the time the liquidation whereas the
secured creditors are paid out of the proceeds of sale of the secured assets of Champion Ltd.
Creditors will be invited to provide the liquidator with details of their claim.
The possibility of getting the injunction.
It is a just and equitable remedy in the form of a court order that compels a party to
refrain from specific acts. There are four types of Injunction which are as follows; Prohibitory,
Temporary, Mandatory and Permanent Injunction.
Applying of Injunction By Amber Ltd:
The Amber Ltd can apply for Injunction in two ways either by; “on notice” or “without
notice”. In the former situation Amber Ltd seeks the injunctions and will inform Mr Anderson
about its application and when or where it will be heard (Mahoney, 2013). The Amber Ltd needs
to fulfil any of the given situation in order to apply for injunctions:
 The employee has or is believed to have taken or used any of the confidential data such
as clients or customer lists.
 In situation where the employees is a senior employee there are restrictive conveyance in
the employment contract.
 In this situation where employer feels of any fraud from an employee.
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Relevant Law for Injunction:
 Freezing Orders: It is an interim order that prevents a party from disposing or dealing
with assets. Amber Ltd can issue a Freezing Order to Mr Anderson to stop using any of
its assets.
 Disclosure Orders: Party is required to disclose reasonable documents. (Williams, 2012).
 Search Orders: Access must be given to search and seize evidence in order to preserve it.
An alternative legal solution based on a different legal framework.
Alternative Dispute Resolution:
Alternative Dispute Resolution includes process and techniques that act as means for disagreeing
parties to come to an agreement instead of litigation. In the above case Amber Ltd can use ADR
to resolve dispute within Company and Mr Anderson instead of getting Injunction. It can achieve
this purpose by following different forms of ADR these are: Negotiation: This process consists an informal approach between the Amber Ltd and Mr
Anderson. It is the quickest and easiest form of solving problem. Arbitration: In this process it involves help of an arbitrator to give judgement by
listening to grievance of both the parties. This can be used by Amber Ltd as it will
involve a neutral third party and will provide bias free decision.
 Mediation: He is a person who bring the disputed parties into a conclusion or an
agreement but he can't force the parties to come to a conclusion.
CONCLUSION
This report concludes that Business law is an important legislation for controlling and
guiding different organisation in a country. The Parliament is a Sovereign body and have highest
legislative authority to form and break any law in UK. They form Statutory law which is to guide
and protect citizens of United Kingdom whereas Common Law is formed by the judge
precedents. Further, the report shows different legal solutions for assessing problems of
liquidation and Injunction.
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REFERENCES
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Online
What is Alternative Dispute Resolution?.2018. [Online]. Available Through.
<https://hirealawyer.findlaw.com/choosing-the-right-lawyer/alternative-dispute-
resolution.html>the UK - EU Law without the UK