Business Law Essay

This essay provides a comprehensive overview of business law in the UK, covering sources of law, the role of government, the impact of various legal frameworks on businesses, and the legal formation, management, and funding of different business organizations. It also examines legal solutions for business disputes and evaluates the effectiveness of the UK legal system.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1. ................................................................................................................................................1
P1. Explaining the various sources of law..................................................................................1
P2 Role of government in making law and explaining application of statutory and common
law in the courts of UK..............................................................................................................2
M1 Evaluation of the effectiveness of legal system in context of latest developments and
changes made in the legal structure of UK ................................................................................3
LO2..................................................................................................................................................4
P3 With use of example explaining the effect employment, company and contract law have
on a business operating in UK...................................................................................................4
M2 Presenting difference between legislation, standard and regulation with illustrating their
impact on business organisation in UK.......................................................................................5
D1 Evaluation of legal system and law through presenting examples as well...........................5
LO3..................................................................................................................................................5
P4. Explaining the legal formation of the different kinds of the organization............................5
P5. Explaining the management and the funding sources of the business organizations. .........7
M3&D3. Evaluating the advantages and disadvantages of the various business organizations.
.....................................................................................................................................................8
LO4..................................................................................................................................................9
P6 Providing solutions to different business disputes where party can get legal advise .........9
M4 and D3 Comparison and evaluating effectiveness of the legal solutions,legal advise and
support.......................................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................12

INTRODUCTION
Business law is defined as the laws that dictated the formation and the operation of the
business. It is the legal system that guarantees for the orderly conduct of the affairs of business
and the legitimate settlement of the dispute. It provides for the rules, policies and the procedures
that prescribes conduct of the business by avoiding the implications and the injury in the
business relationship. The present study is based on the legal rules regarding the business.
Furthermore, it describes various sources of the law and the role of the government in making
the law. The legal provisions in relation to the formation of the business organizations and the
management and the sources of funding are also highlighted in the study.
ACTIVITY 1
LO1.
P1. Explaining the various sources of law
Many treaties of the English legal system impose the legal obligations on the state of the
members that includes the treaty of Rome 1957, European Act 1987 etc (Frankle and et.al.,
2015). Majorly there are most important sources of law that includes the parliament, delegated
legislation, courts, regulations.
Regulations- It is intended for imposing the uniformity in the law throughout the overall
community. They create effects in all the member states on an immediate basis that is being
issued.
Parliament- Majority of the English legal laws are framed by the Parliament. It includes
two types of the legislation that is the direct and the delegated legislation. In direct legislation,
the laws are comprised of the act of the Parliament and developed by passage of the bill through
the certified processes (Allen, 2017). Indirect or the delegated legislation is been created by the
authorized body that has the power in legitimating by the parliament under the enabling Act.
Delegated legislation is of four types that orders in the council, statutory instrument, bye-laws
and the regulation for implementing the law from EU.
Courts- The law that are provisioned by the court are called as the common law. In older
times the courts were considered as the primary source in law makers but had been suspended by
the parliament due to the social conditions and needs the different style for making the law.
Court has facilitates the law regarding civil as well as the criminal aspects. This shows the
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creative powers of the court (Morley, 2016). The interpretative powers of the court reflects that
most of the law had become statutory as it is concerned mainly with interpretation and the
application of the point of the law that derived from the Act of parliament and the delegated
legislation.
P2 Role of government in making law and explaining application of statutory and common law
in the courts of UK
Pre legislative stage:
The government bill is preceded by the issue of green paper under legislative proposal is
set out for debate. Consultation for interest group is taken and then a white paper is developed a
draft bill which is approved by cabinet ministers before presenting it to the the both houses of
parliament.
The parliamentary procedure:
The bill introduction is done through the first reading where it is presented before the
one of the two houses,(House of Lords and House of common). Generally, it is first presented to
house of commons where existence of bill is announced. After this bill goes to second reading
where a detailed debate over the principle of bill is done. Voting is done over to pass the bill to
committee stage with majority. At the committee stage a standing committee of 24-45 members
are appointed. Here bill is examined with considering each clause separately, at this stage
amendments are also made. From here bill goes to report stage to consider the finding from
previous stage and acknowledging the changes made. Here further amendments in the bill can be
proposed before going to the third reading (Adam, 2016). Here bill is read out, a short debate is
carried out and voting is done to send the bill to other house. After approval bill is send to the
other house generally house of lords whee I goes through same procedure as before. The house
of lords can not outright a bill rather they can delay it. The bill before becoming an act of
parliament must receive an formal assent from the Monarch to convert into an act.
Common law – creative power
The laws which are made through the case laws of courts are referred as common law.
The application of this law can be defined as ruling of a previous case law is refereed while
giving decision over a law suit with similar subject matter abs facts of the case. The facts and
circumstance of two case can not be similar and its possibility is very rare. With this uncertainity
the common law are not considered to be inadequate from of law making in a sophisticate legal
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structure. At present time may civil and criminal laws are made statute one with giving them a
legal enforceability. While applying the comms laws the judge and courts have discretionary
power to apply the ruling of previously decided case or not. The judges must provides evidence
and for that there is omission of the fact or evidence to misinterpretation of the law while
pronouncing the decision. For example it is used in the case of Pimlico plumber where the rules
of Uber v Aslam were applied.
Statute law: interpretative power
The laws which are made through the act of parliament are termed as statute law. A
judge is required to interpret a statute with such a meaning as defines under the act with their
actual intention of the parliament while making it. The laws can be interpreted through the use of
intrinsic as well as extrinsic aids. The laws must be interpreted with their actual meaning. The
rules and provision of the laws are applied in actual case scenarios to give a decision over a case.
No courts of judge have a power to question the acts and law. Its application flows as first the
determine the facts of case and then identify relevant act or acts for the given case after this
specific provisions of the act are applied to the case to pass a decision on that case. For example
its use was also seen the case of Pimlico plumber where provision of Employment protection act
1986 is done to determine the employment status of the plumber of the company Pimlico
plumber.
M1 Evaluation of the effectiveness of legal system in context of latest developments and changes
made in the legal structure of UK
The UK legal system is one of the oldest legal structure where law were made though the
case laws. With time many changes and development in the legal system have been done. This
includes removal of the power of house of lords and establishment of high courts in 2009. In
the years 2013 the Legal Aid, sentencing and Punishment of offenders Act, 2012 (LASPO) came
into force redefining the laws over prosecutions and imposition of punishment over offender
under criminal law. In 2014 family courts were developed so that hearing of both parties can be
done under same roof (Adam, 2016). In 2016 change were made in skeleton argument. Also in
the recent times alternative dispute resolution methods are used to a great extent to solve the
business disputes the ADR process have made the work simple and reduced the litigation
process under the curt proceedings.
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LO2
P3 With use of example explaining the effect employment, company and contract law have on a
business operating in UK
Employment law:
This law defines and governs the relationship of employee and employee in legal direction. The
rules are defined under the different acts such as employment rights act 1986, employment
protection act 1996, national minimum wages act 1984 and others, this define provision related
with pay, leave, workmen constipation , rights of employee, redundancy pension and others. A
non abidance with any of the law can lead the employer to face legal charges in form of
imposition of fine and punishment or imprisonment. For example in the case of Pimlico plumber
the company was obliged to give plumber a status of employee within organisation along with
all the rights of an employee.
Contract law:
The law of contract is governed by the Contract (Applicable law)act 1999, which
defines the right and litigation of the contracting parties. The contracts are written agreement
where by two or more parties entered into a business transaction to fulfil promises made under
contract. A non abidance with any of the terms of the contract lead to breach of the contract of
which courts give legal remedy in the form of specific performance and damage compensation to
innocent party (Adam, 2016). Such as in the case of Carlill v Carbolic Smonk ball the shop was
held to compensate the consumers as there was a unilateral contract between them.
Company law:
The company law 2006 defines rules and regulation related with formation, operation
and ending of a business. In this legal status of company is defines along with theirs rights and
responsibilities. When a rules are no followed the most serious consequence is de registration of
the company and striking out the name form companies house. For example in the case of Jones
v Lipman 1962 it was stated that corporate veil of separate legal entity can be pierced if the
company is formed to defraud other party and the company's registration is liable to be
cancelled.
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M2 Presenting difference between legislation, standard and regulation with illustrating their
impact on business organisation in UK
The legislations are the acts which are made through the act of parliament while the
regulations are the rule of order which have a enforceability under law. The regulations are
formed for application of the law which are enacted by the parliament while the standards are a
general specification given by the authorities over certain facts and define set citrate to achieve a
defined standard. The legislations are made by the parliament such as Companies act 2006 which
defines the form in which a company can be established, operated and ended under legal terms.
The regulations are extension of law which defines how particular part of must be practices and
used in general practice. Such as Companies (Single Member private Limited companies)
Regulation 1992 defines particular rules related with members of private limited Companies.
While the standard define a definite set specification and guidance to meet the specific set of
rules and they are not compulsory such as Health and safety standard 2010.
D1 Evaluation of legal system and law through presenting examples as well
The legal system of the UK is considered to be oldest one. The legal framework consist
of legislation, regulations which create a obligation over the business organisation to abide with
them compulsorily. While the standard which is also a part of legal system provide general
specification for application of a specific law. This is voluntary for company to follow or not.
The effectiveness of the legal system can be defined through reforms and developments in the
legal structure. The system have changes over time in which court structure have bee change
making is more specific and providing justice effectively.
With effective application of the justice one of the lag faced by UK is that its
constitutions is not present in codified form. Although all the laws are present in written format
but still they all are not present in a single codified document (Adam, 2016). With this example
it can be stated that the effectiveness of the Justice system do not fall back with this lag and the
courts and legal structure of UK is developing day by day towards achieving new effectiveness
and applicability.
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LO3.
P4. Explaining the legal formation of the different kinds of the organization.
Different businesses operates with different size and also the ownership is different.
Some organizations are owned by only one person or the group of the persons (Lee and Harris,
2018). Some businesses owned larger shareholders while some functions as the charitable
institution. The ownership structure of the different organization depends upon their legal
formation. The legal and the ownership structure of the business identifies several its several
legal responsibilities. In United Kingdom, mainly the types of the business organizations are the
sole traders, Partnership business and the limited companies.
Sole trader- He is the person who runs the business as sole proprietor. He could keep the
profits of its business after paying off the taxes and are personally responsible for bearing any
losses that the business incurs. The liability of the sole traders is unlimited and are not counted as
separate from its business (Roper and et.al., 2018). Unlimited liability of the sole trader depicts
that his personal assets can also be used for paying of its obligations in case of the losses. In
accordance with the UK law, it has been evaluated that reporting and auditing of the financial
statements is not mandatory for the for such type of business. Sole trader could function its
business without getting registered.
Limited company- It is the corporate which is set up by the owners in running their
business. It is called as the separate legal entity where the owners are distinct from its business.
As the name suggest, the liability of the limited company as per the UK law is limited which h
means that the company is not liable for the non-payment of its members or any dues on account
of the directors. Limited company has the power to own the property in its own name, can sue on
its own name and could be sued by any other individual or entity in the name of the company.
Limited companies involves mainly two type of companies that includes private and public
limited companies (McLean, 2018). The private companies restrict trading of its shares on the
stock exchange while the public companies are allowed for trading their shares on the stock
market. The profits generated in the company are distributed among its shareholders or the
members who own the shares in the company. It is mandatory for the limited companies to
prepare its financial statements with compliance of the accounting standards as provisioned in
the IFRS. For incorporating and operating as a company, it must be registered with the registrar
and the reports must be sent to the registered office of an entity.
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Business partnership- It means the arrangement between two and more than two
individuals who shares ownership of business. An agreement is made by the mutual consent of
the partners called as the partnership deed in which all the details regarding their share in the
profits in proportion of their capital is mentioned. The liability of the partners is unlimited and
are responsible in paying off all the liabilities in respect of its business as they are not considered
distinct from its business (Macaulay, 2018). Specifically the partnership firm are of two types
that are general and the limited partnership. In the general partnership the partners are been
personally liable for any losses in the business whereas in limited partnership, the partners are
not liable for their personal assets in case the business results in the loss. Registration of the
partnership firm is not compulsory.
P5. Explaining the management and the funding sources of the business organizations.
Sole trader- The management structure of the sole trader is counted as simplest as it does
not require any kind of filling with state. The managerial control of this firm is entirely in the
hands of the sole proprietor over business. Under this business organization the proprietor is
known as the boss. All the decisions in relation to the management is made by the owner. The
profits generated in the business are wholly entitled to the sole trader and also personally liable
in bearing the losses (Juergens and Galatowitsch, 2018). Various alternatives relating to the
funding are available to the sole trader from which it can meet its financial requirements. It can
opt for utilizing its own capital, can generate funds through the sales of its asset, retained profits,
bank loan and the hire purchase.
Limited company- The board of the directors and the shareholders are the major person
who is responsible for the management of the company. The directors are appointed by the
shareholders as they are considered as the owner of the corporate in proportion of their
shareholdings. The directors function the company in accordance with the company's interest.
Limited company can make use of various sources in availing the fund such as bank loans,
borrowing from friend, venture capital and the government funding. Except these sources the
company can also raise funds through the issue of the debentures, equity shares and the
preference shares.
Partnership firm- Management of the partnership firm lies in the hands of partners. All
the partners are treated as the co-owners. Equal right has been assigned to all the partners in
managing their business. The provisions relating to the management and the control of the
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partnership firm are been detailed out in the agreement which leads to avoidance of the conflict.
For raising the funds partners must plan for the need of the funds and accordingly an effective
plan has to be prepared. The foremost or the primary source of the funding is the self funding
that is the profits of the business (Sison, 2018). By exploring the funding through venture capital
can helps the firm in raising the huge funds in respect of the growth opportunities. Securing the
loan from the business is also one of the source of the funding for the smooth functioning of their
operations. The latest model of the financing that the company can use is crowdfunding which
includes turning towards the internet for adopting opportunities. By availing small grants from
the government, funds can be accumulated by partnership firm.
M3&D3. Evaluating the advantages and disadvantages of the various business organizations.
Sole trader-
Advantages Disadvantages
Control- The owners has the full control over
their business without any interference by
others.
Profit retention- The entire profits is retained
by the sole trader that generated in their
business.
Confidentiality- All the information remains
confidential as no auditing or reporting is
compulsion for the firm.
Decision making- owner can make all the
decisions in accordance with his preference
which results in quick decision making.
Liability- As the sole traders are not considered
distinct from its business so his liability are
unlimited. If the business goes in the state of
insolvency, then owner is personally liable.
Finance- The owners of the sole proprietorship
firm faces difficulty in raising the finance and
might struggle at the time of expanding its
business.
Partnership Firm-
Advantages Disadvantages
Easy formation- Partnership firm is formed
with very less legal formalities and the formal
Limited resources- The firm faces' limitation
in raising the additional resources for the
purpose of the expansion. The capacity of
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documents are not required.
Large resources- The contribution made by
the partners in terms of the capital creates large
funds for the firm (Allen, 2017). It provides
flexibility in relation to adding more partners.
Risk sharing- The risk involved in the business
is been shared among the partners which
results in the reduction of the burden among
the partners.
partners for borrowing is limited in the senses
that there is limit beyond which the partners
cannot added into the firm.
Mutual distrust- The main cause of the
dissolution in the partnership firm is the lack of
trust among the partners. This is caused due to
the different opinions of different partners.
Limited company-
Advantages Disadvantages
Tax Benefit- In case of the limited company
only the profit amount is taxable. The tax rate
for the limited company is lower in comparison
with the sole trader and the partnership firm.
Limited liability- The liability of the members
is limited to their unpaid value of shares. They
are not liable for the company's debt.
Power distribution- The power is distributed
among the member in accordance with the
proportion of their holding. This might lead to
an argument between the shareholders and the
directors.
Complex accounts- For maintaining the
accounts of the limited company, complex
rules are regulated (Frankle and et.al., 2015).
This results in preparation of the accounts with
complexities.
LO4
P6 Providing solutions to different business disputes where party can get legal advise
The business organisations operates in a dynamic world. The conditions of the business
transfection changes with a faster pace with changing environmental condition both internal and
external. In this section two of the different business issues are taken and for the same two legal
solutions are provided with the use f statute and common law.
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Case 1: C started a business as a private limited company and he remained the single
director of the company. He, his wife and his brother were the only shareholders of the company
and all of them have invested funds in the company and a have extend a loan to the company .
The company was operating well and making profits. This lead the suppliers to extent them the
material on credit. Subsequently the company become insolvent and C stated that he is a secured
creditors so he must be paid first and then unsecured creditors, other creditors are denying to this.
Advise C.
Legal Solution:
As per the provision of the companies act 2006 the business and its directors are two
different legal person. A company upon its registration gets a status of separate legal entity. So
for the insolvency of business directors can not be held liable until they have acted in good faith.
Also with the decided case of Solomon v Solomon it can be stated as a secure creditor C must be
paid fried out of the insolvency proceedings and then the unsecured creditors will be paid off
(Adam, 2016).
Case 2: D a doctor was selling his practice to F and D correctly provided all the
information to F over the value of the practice. The communication and negotiation was taking
place and before any acceptance by F over the value of the practice the values considerably fell
down. And the patient of D started going else where as name of the doctors got defeminised. He
did not informed F about this and entered into contract. F subsequently discovered the situation
and want a solution against actions of D.
Legal Solution: As per the rules of contract (Applicable law) act 1999 the parties to
contract have a duty for true and correct disclosures of the events and terms of contract. Any
misrepresentation can lead the contract voidable on the part of innocent party. For the present
illustration application of the above rule and decision of the case With v O Flanagan 1936 it can
be stated that D non informing F about drop in the value amounted to misrepresentation and the
contract can be set aside by F (Adam, 2016).
M4 and D3 Comparison and evaluating effectiveness of the legal solutions,legal advise and
support
For both the above case examples it can be stated that the legal advise have been
provided with considering the legislation and common laws. For both the case a legal procedure
is followed to give a remedy for the case. For case 1 the employment rights act is considered
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while for case contract law rules are referred. The effectiveness of legal advise can be established
as for both the cases legal solution is presented which is enforceable by law. With this both the
parties can take effective action over their business issue and resolve the dispute.
CONCLUSION
To conclude this report it can be stated that that under the English Legal system the
sources of law are act of parliament, delegated legislation, case law, directive and treaties. The
laws in this legal structure are made through the procedure of parliaments where house of
commons and house of lords approve the bill and it becomes law after getting consent from the
Queen. The common laws have been identified to be applied in courts as per discretion of judge
where as statue law are compulsory one to be used while deciding a case. Furthermore, different
types of business organisations have been identified as sole trader, partnership and limited
company. All three of them are management by different individuals and team. The sources of
funds are also different form each business type. For all three types their benefits and drawbacks
have also been presented to critically define the best source to start a business. Moreover, in the
last section of the report two different example have been presented over business problems and
for same legal solutions has been explained. The solutions have been provided with taking
reference form status laws and common law as well to present effective advise for commercial
issues.
(Adam, 2016)
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REFERENCES
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Adam, A., 2016. Business law for Students. (pp. 128). Person.
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Adam, A., 2016. Business law for Students. (pp. 427-430). Person.
Allen, W. T., 2017. Our schizophrenic conception of the business corporation. In Corporate
Governance (pp. 79-99). Gower.
Frankle, D. H. and et.al., 2015. Proceedings of the 2014 Delaware Business Law Forum:
Director-Centric Governance in the Golden Age of Shareholder Activism. The Business
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Juergens, A. and Galatowitsch, D., 2018. Fostering Client Altruism and the Common Good in
the Practice of Law: Learning from Emerging Movements in Business and
Economics. Mitchell Hamline L. Rev. 44. p.1.
Lee, E. and Harris, R. L. W., 2018. The effects of online glossary quizzes and student autonomy
on domain vocabulary learning in business law. Journal of Computing in Higher
Education. 30(2). pp.326-343.
Macaulay, S., 2018. Non-contractual relations in business: A preliminary study. In The Law and
Society Canon (pp. 155-167). Routledge.
McLean, C. L., 2018. Corporate and Business Law. U. Rich. L. Rev. 53. p.37.
Morley, J., 2016. The Common Law Corporation: The Power of the Trust in Anglo-American
Business History. Colum. L. Rev. 116. p.2145.
Roper, V. and et.al., 2018. Understanding the Scope of Business Law Clinics: Perspectives from
the United Kingdom, Israel and the United States. J. Int'l & Comp. L. 5. p.217.
Sison, A. J. G., 2018. Virtue Ethics and Natural Law Responses to Human Rights Quandaries in
Business. Business and Human Rights Journal. 3(2). pp.211-232.
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