Limited Liability & Business Disputes

This assignment delves into the concept of limited liability within a corporate structure. It examines the legal framework surrounding limited liability and its implications for creditors in case of business disputes. The document highlights various alternative dispute resolution (ADR) mechanisms available to resolve conflicts outside of traditional court proceedings.

TOPIC:
Business Law

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Explaining the overall English legal system...............................................................................1
TASK 2............................................................................................................................................4
Providing solution for the problem arisen in business of K........................................................4
TASK 3............................................................................................................................................5
Critical evaluation of different types of business organisation...................................................5
TASK 4............................................................................................................................................8
Various alternatives to resolve the legal dispute.........................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business law in UK legal system is the combination of all the civil laws, contract laws
and other commercial laws that have impact over the normal business performance of an
organisation. Each business operating their business in UK gets affected by the business laws of
the country. The present study includes a brief description about the whole English legal system
can its numerous sources of law. It also shows a complete procedure of making law in the
parliament. Further, the study provides Legal solution of a some business problems along with
defining various alternatives available as to resolve any dispute.
TASK 1
Explaining the overall English legal system.
English legal system:
The legal system of UK is also termed as the English legal system. It is a combination of
all the criminal and civil laws (Nyoni and Hart, 2018). It provides various rules and regulations
regarding numerous civil and criminal issue that need to be followed by each individual,
corporations and other persons of the UK. The whole English legal system can be easily
understand by a brief analysis of criminal and civil laws of the country.
Criminal laws:
Criminal laws refers to Criminal law act 1967 which contains various rules and
regulations of the country that concerns with preventing the each person of the country from
suffering any criminal offence (Criminal law, 2018). This act concerns with making rules that
can help the individuals from some serious issues of the society like murders, robbery etc.
Further, it also contains the common laws that can help the judicial authorities in
providing appropriate solution for the criminal issues. It contains numerous cases like, murder
case, rape case, issues regarding robberies, etc.
In addition, criminal laws deals with the offence made against any individual, any
company or against whole society. Further, in these types of issues, the court provides various
penalties and punishments or imprisonment to the defaulter. In general, Federal state
government solves the criminal cases. They decide the legal proceeding to be charged over the
person who has made the offence.
Civil laws:
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Civil laws provides the rules that helps the government in providing protection to each
person of the country from any wrong behaviour of another person including individual,
corporation or any other private or public party.
Breach of contract, loss due to negligence of another party, defamation, etc. are some
major examples of the civil wrongs (Cartwright, 2016). Further, issues of the civil cases are
termed as the injury rather than offence and judicial authorities provides penalties to the
defaulter party as per the preponderance of evidence i.e. analysis of the evidence. Further, it
always provides monitory awards to the plaintiff.
In this regard, the whole English legal system works in UK for the purpose of providing
safeguard to each person and eliminating various serious criminal and civil issues from the
country.
Sources of law:
In UK, the laws are being framed by using various sources. Sources of laws can be
defines as the guidelines and other rules that are needed to be taken into account while
developing any new law in the country. Some major sources of laws are as under:
 Common laws: Common laws are the judgements provided by the higher judicial
authorities. These are applicable over the lower judicial authorities only (Zander, 2015).
They need to provide their justice by taking into account all the common laws made on
the specific issue. In this regard, the common laws are the source of law in UK.
 Act of parliament: Rules made under the act of parliament are termed as the statutes of
the country. These are the main source of law in UK. Statutes are the original legislations
of the country. Further, due to creation through acxt of parliament, they can not be
avoided while making any law for the country. Therefore, they are termed as a key source
of law in the UK.
 Customs: Customs refers to a set of rule of a specific locality. Due to compliance of
these rules from ancient period, they become the basis of making law (Kirton and Greene,
2017). Rule related to family rioght, social rights, etc. are generally framed on the basis
of the customs of the country.
In this regard, it can be evaluated that the there are various sources on the basis of which
the laws are framed in the UK.
Parliament
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Parliament in UK is the government authority that governs the whole legal system of the
country. As per the clause of constitution, the parliament contains the sovereign state in the
country. Due to this state, the parliament gets the highest position in the country.
In UK, the parliament have right to make the laws relating to all issues of the country.
Further, the constitution also contains a clause that no law made by the act of parliament can be
override by any person including judicial authorities of the country. In this regard, it can be
analysed the parliament has the sovereign state in the country.
Stages of passing bill
For the purpose of making any law, a bill need to be passed through various stages of the
parliament. After passing the bill from all the stages the bill is converted into an Act and hence
becomes applicable over each person of the country.
The various stages of law are as under:
 Preparing the bill: The law making process starts with the preparation of bill. Bill is
prepared by the government authorities by detecting the need of new law or amendment
in any existing laws. Bill contains each clause of the laws to be prepared.
 Presentation of bill into both houses: After preparation of the bill, it is presented in
both houses of parliament i.e. house of commons and house of lords. In both houses the
bill has to pass through various stages as under
 First reading: It is primary stage conducted in the house of parliament. At this stage,
each clauses of the bill is thoroughly read in front of the house by the ministers of
government.
 Second reading: After the first reading, the ministers discuss each clause of bill for the
second reading stage. They vote for the bill and also makes the amendment in the bill on
the basis of majority of votes.
 Committee stage: after the second reading, the bill is transferred to the committee of
house for its further processing. At this stage, the committee members discuss the clauses
of bill along with the amendments made earlier (Adelino, Schoar and Severino, 2015).
Members makes an examination of bill and also makes the amendment in the bill as they
think fit.
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 Report stage: after completion of committee stage, the bill is being reported the bill. At
this stage a debate is conducted for discussing the bill along with its amendments.
Ministers again vote on all the clauses of bill.
 Third stage: Aft this stage, a debate is being conducted among the authorised minsters of
government for the purpose of deciding acceptance or rejection of bill. The bill is being
passed for further processing after getting majority of vote in favour of bill.
 Later stage: After completion of all the above stages, the bill is transferred to the another
house of parliament. Where the ministers of another house passes the bill through above
mentioned stage again. It is a continuous process until getting assent of both houses over
single set of clauses. After getting the acceptance of both houses, the bill is termed as the
law.
 Royal assent: The law is presented in front of the Queen of UK for getting her assent i.e.
royal assent over the law. The law making process completes after this stage. And after
royal assent the law is covered into act which has to be followed by each person of the
country.
Diversity:
Diversity refers to inclusion of person belonging to various religion and countries at a
single place. The diversity may attract the discrimination among the people (Premand and et.al.,
2016). In UK, for eliminating these discriminations, various laws has been framed including
Equality Act 2010, Anti discriminatory codes, etc. these laws ensures the elimination of
unlawful discrimination in the country and helps in providing equality to each person in the
country.
TASK 2
Providing solution for the problem arisen in business of K
As per the legal definition, employees are those individuals that employed by a business
on the basis of some specific conditions mentioned in their employment contract(Difference
Between Self Employed and Employee, 2019). On the other hand, Self employed are those that
earns their revenue from the business, but are not employed by the company through any legal
employment contract.
The major difference can be determined through the following table of checklist:
Basis Self employed Employee
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Legal obligation These are not bound through any legal
obligation.
They are bound to comply with
the employment contract and
employment law as well.
Financial benefit They are paid on the basis of job doe
by them for company.
Employees are paid on the basis
of clause mentioned in their
employment agreement.
Uniform Self employed can not be obligate to
wear the uniform of company.
Employees may be bound by the
company to wear its uniform.
Way of doing job There is no set criteria to perform the
job assigned to self employed.
These need to follow the criteria
of the company.
Further, the key difference between employee and self employed is that self employed
can not be controlled by its employer for performing their work and they also have right to
employ a substitute for performing their job. On the other hand, employees can be obligated in
these regards.
In the pre decided case of Pimlico, the company wanted to declare its employees and self
employed. Along with it, the company also wanted to force various control over them like
wearing uniform, driving the van of Primlico having the tracker system in it. The supreme court
held that the workers can not be treated as self employed due to forcing various control over
them.
On the basis of above rules and pre decided case, it can be concluded that, in the present
scenario, as K has made its workers to follow several rules, they can not be termed as the self
employed. K needs to treat them as employees of the company. Due to this treatment, K has to
follow each rule of the contract law and the employment law as well. Employees need to be paid
remuneration as per the contract.
TASK 3
Critical evaluation of different types of business organisation
Business organisation can be divided into various types on the basis of their structure
like:
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Sole trader:
Sole traders are those businesses that are owned and controlled by a single individual.
These businesses need not to follow much legal obligations while performing their operations.
(Saebi and Foss, 2015)
Advantages
 Not bound by any legal obligations.
 No formation procedures Involves the least cost.
Disadvantages
 unlimited liability of owner
 No fixed structure of business.
 Least trust of public
 Raising fund is major task
Limited company:
Limited companies are those organisations that are framed as per the company law of the
country. All the shareholders are the real owners of limited company. Further, they also have
limited liability upto the amount of shares held by them.
Advantages
 Limited liability of owners
 Separate legal entity Set structure of the business.
Disadvantages
 Need to bear a huge cost.
 Formation of limited company contains long procedure.
Partnership:
Partnership can be defines as a corporation which has been formed by creating a mutual
agreement among two or more individuals for performing the business activities. They also
agrees to share the profit and losses earned through business.
Advantages
 No formation procedure.
 NO legal obligation.
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 Mutual sharing the risk.
Disadvantages
 Unlimited liability of partners.
 No trust if public. High probability of misconduct ion.
Therefore, it can be evaluated that there are various types of business structures (Singer,
2018). Each have its own props and cons. K should convert its business into limited company as
it would provide a huge benefits like limited amount of liability, set business structure, efficient
management system, etc.
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TASK 4
Various alternatives to resolve the legal dispute
Figure 1 ADR solution methods
(Source: Alternative Dispute Resolution, 2018)
For the purpose of solving any legal proceedings, there are various alternatives other than
the legal proceedings. The other alternatives are termed ADR system which provides various
methods to resolve the disputes like mediation, conciliation, arbitration, etc.
If the Kango wants to solve its disputed through mediations, it would need to appoint a
third party as a mediator with the mutual consent of another party. Both parties would present
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their point of view in front of the mediator who will provide the solution as per his knowledge
and skills
Further, for the purpose of solving the dispute on the basis of arbitration, the dispute
would be presented in front of the authorised arbitrators. They are authorised by the government
to solve the litigations by following a formal procedure (Meyr, Wagner and Rohde, 2015). The
solution provided by the arbitrator have binding effect over both the parties.
In addition, conciliation is also another alternative of solving the business disputes. A
professional expert of solving litigations conciliator is appointed by both parties. Who listens the
whole dispute and provides the appropriate solution for the dispute as per his professional
knowledge and expertise.
CONCLUSION
From the study of above assignment, it can be concluded that the English legal system is
a set of all the laws and regulations of the country which is applicable over each person of the
country. Further, the parliament has a sovereign state in the legal system of UK. For the purpose
of treating workers as self employed, the company has to remove all the controls from the
employees. Further the study has also concluded that there are various types of business
structures. One needs to evaluate each business structure carefully before forming any business
or converting its business. The legal disputes can be solved by using various alternative sources
of ADR system rather than solving it through the procedure of court.
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REFERENCES
Books and Journals
Nyoni, E. and Hart, T., 2018. THE CONCEPT OF LIMITED LIABILITY AND THE PLIGHT
OF CREDITORS WITHIN CORPORATE GOVERNANCE AND COMPANY LAW: A
UK PERSPECTIVE. InterEU law east: journal for the international and european law,
economics and market integrations, 5(2), pp.309-322.
Behrens, P., 2016. The criminal law of genocide: international, comparative and contextual
aspects. Routledge.
Cartwright, J., 2016. Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing.
Zander, M., 2015. The law-making process. Bloomsbury Publishing.
Kirton, G. and Greene, A. M., 2017. Understanding Diversity Management in the UK.
In Corporate Social Responsibility and Diversity Management (pp. 59-73). Springer,
Cham.
Adelino, M., Schoar, A. and Severino, F., 2015. House prices, collateral, and self-
employment. Journal of Financial Economics, 117(2), pp.288-306.
Premand, P. and et.al., 2016. Entrepreneurship education and entry into self-employment among
university graduates. World Development, 77, pp.311-327.
Meyr, H., Wagner, M. and Rohde, J., 2015. Structure of advanced planning systems. In Supply
chain management and advanced planning (pp. 99-106). Springer, Berlin, Heidelberg.
Saebi, T. and Foss, N. J., 2015. Business models for open innovation: Matching heterogeneous
open innovation strategies with business model dimensions. European Management
Journal, 33(3), pp.201-213.
Singer, L., 2018. Settling disputes: Conflict resolution in business, families, and the legal system.
Routledge.
Online
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Criminal law .2018 [Online] Available Through: <https://www.britannica.com/topic/criminal-
law>
Difference Between Self Employed and Employee. 2019 [Online] Available Through:
http://www.differencebetween.net/miscellaneous/career-education/difference-between-
self-employed-and-employee/
Alternative Dispute Resolution. 2018. [Online]. Available through :<
http://www.taylorlm.com/legal-services/family-law-services/divorce-and-the-divorce-
process/step-seven-alternative-dispute-resolution/>.
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