UK Legal System & Legal Solutions for Start-ups | Desklib

This report evaluates the legal system of the United Kingdom by overseeing different laws that are necessary to comply by new start-ups. Further, the report will analyse the potential implications of law on businesses and the government’s role in the law-making process.

Running head: BUSINESS LAW 0
Business Law
The UK Law, Legal System & Legal
Solutions

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Table of Contents
Introduction............................................................................................................................ 2
UK Legal System Explanation................................................................................................3
Overview of UK’s Sources of Law..........................................................................................3
Explaining the Government’s Role in Law-making.................................................................3
Key Legislations for Start-ups.................................................................................................4
Potential Implications of Law..................................................................................................5
Copyright Law:....................................................................................................................5
Employment Law:...............................................................................................................5
Contract Law:......................................................................................................................5
Conclusion............................................................................................................................. 6
References............................................................................................................................. 7

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Introduction
Entrepreneurs required evaluating and understanding the legal system which applies to the
company since it assists them in complying with necessary legal requirements and taking
right business decisions. This report will evaluate the legal system of the United Kingdom by
overseeing different laws that are necessary to comply by new start-ups. Further, the report
will analyse the potential implications of law on businesses and the government’s role in the
law-making process.

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UK Legal System Explanation
The UK is a parliamentary democracy with a constitutional monarch. The country has an
unwritten constitution, and there is no single written document which provides the rights that
citizens have and how the government should act. There are a variety of sources which
comprised as the constitution, some of which are written whereas others are unwritten
(Ward, 2011). The doctrine of judicial precedents is a unique feature in the legal system of
the UK whereby the decision taken by the courts are binding as a source of law over the
future judicial decision. The crown court handles all criminal cases after they are appealed
from magistrate court.
However, the magistrate court has the right to entertain both civil and criminal cases. County
court is the first level of civil cases, and it cannot be passed to magistrate court. For criminal
cases, magistrate court is the first level. The parties have right to appeal against the
judgement of both County and Magistrate court in Supreme Court which is the last supreme
power in the country (Ingman, 2011). The Supreme Court has the authority to give
punishment like combining two punishments. The laws are necessary to comply by
organisations include company law, employment law, National Minimum Wage act 1998,
English contract law, and others.
Overview of UK’s Sources of Law
There are three key sources of the UK law which include common law, legislation, and the
European Union law. Legislation laws are referred to the acts that are created by a
legislature, and the Acts of Parliament are defined as the most significant pieces of
legislation. The UK Parliament is situated in London, and it passes laws that implement in
the UK. The Parliament consists of the House of Lords in which the number of members is
not fixed (currently 792 sitting lords) and the House of Commons in which 650 members sits.
The legal system that applies in Wales and England is a common law one, therefore, the
judgment of senior appellate courts becomes a part of the law (Armour, et al., 2009). The
country is a member of the European Union (EU); therefore, it has to comply with the EU
law, and it takes precedence over nation’s law.
Explaining the Government’s Role in Law-making
The government plays a key role in law-making since it introduces great majority of Acts of
Parliaments. The government performs different activities or functions during different steps

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of the law-making procedure. Firstly, the executive branches of government develop a draft
of the law which is known as a public bill, and the main function of parliament is the review,
amend and pass such bill to create a new law (Mahalatchimy, et al., 2012). The draft
presented by the government includes proposed law and its impact on the society. Only few
bills become law. The procedure for passing a bill starts from presenting of the bill in either
the House of Lords or the House of Commons. The first reading of the bill is just a formality
in both houses. In second reading of the bill, a government minister read and presents that
bill in front of the House of Commons.
The opposition and other parties present their views. Generally, the opposition opposes the
bill, but it almost always progresses to the Committee stage. The committee further
examines and amend the bill, and it reports the debates and amendments to the House. In
third reading, members of the House vote whether the bill should be accepted or rejected.
Further, the government plays a crucial role in Delegated Legislation in which the parliament
delegates the power of law-making to the government. This legislation is subject to strict
limitations, and it can only use for regulating issues of administrative nature. There are three
key types of Delegated Legislations. In order in council, the government made law during an
emergency. In the Statutory instrument, the government ministers create new regulation,
and the local and national authorities create Bye-laws.
Key Legislations for Start-ups
While starting up a new business, founders have to decide the legal status of the company
as it influences the way a business is operated and it affects the way it pays taxes and
record accounts. Firstly, entrepreneurs have to decide the legal structure of business. There
are three key types of legal structure of a business, sole trader, limited company and
partnership. For limited companies, founders have to register with Companies House
(Gov.UK, 2018). As per the legal system in the UK, the name of the company must be
displayed at the register offer and its literatures. The founders register a company and select
a unique name in order to start its operations. The members and the company are separate
entities and members cannot be held liable for company’s debts. For example, as provided
in the Salomon v A Salomon and Co Ltd (1897) AC 22 case, the founders and the company
has separate legal entity (Goulding, 2013).
Entrepreneurs have different responsibilities based on the types of their business, and they
have to check the requirement of licences or permits and insurance. For example,
entrepreneurs who are establishing a business in hospitality or catering industry such as
restaurant or pub required a licence to work. The business that relies on licence for its

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income, start-ups are required to take business insurance that protects them in the event of
a loss. Start-ups have to comply with different employment and contract laws in order to
smoothly operate in the UK. For example, as per employment law in the UK, any business
that employs staff is required to take an employer’s liability insurance with a cover level of £5
million. Another example is provided in British Gas Trading Ltd v Lock & Anor (2016) EWCA
Civ 983 case in which the court held that Working Time Regulations 1998 can be interpreted
for including results-based commissions (Employment Cases Update, 2016).
Potential Implications of Law
Copyright Law: With the growing number of start-ups, the growth in protection for
intellectual property has grown as well. The UK Copyright Service protects the slogans,
creative work, logos and designs of businesses from copying or infringement. Start-ups are
required to carefully comply with the UK Copyright law to avoid legal issue. For example, in
Temple Island Collections Ltd v New English Teas Ltd (2012) EWPCC 1 case, the court held
that reproduction of substantial part of claimant’s artistic work is considered as an
infringement of copyright act (Harms, 2013).
Employment Law: Start-ups are required to comply with various regulations relating to
employment law such as providing safe and healthy workplace environment, appropriate
leave policies, compliance with minimum wage act, equality act and others. For example, in
The Government Legal Service v Brookes (2017) UKEAT 0302/16/2803/RN case, the court
held that as per Equality Act 2010, indirect discrimination is illegal and corporations cannot
discriminate between candidates for recruitment based on their disability (Employment
Cases Update, 2017).
Contract Law: Start-ups have to comply with provisions of the English contract law when
they entered into a legal agreement with customers, suppliers, investors or other entities.
Due to the implication of contract law, the companies have to ensure that they fulfil all the
terms of a contract because non-compliance can lead to legal consequences. For example,
in Marks & Spencer PLC v BNP Paribas SSTC Ltd (2015) UKSC 72 the judgment was given
by the Supreme Court which provided that a contract should not be treated as authoritative
guidance instead it should be treated as inspired discussion (Havelock, 2016). The case
proves that Start-ups should carefully fulfil the terms of a contract to avoid legal implications.

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Conclusion
In conclusion, the report discussed the legal system of the UK and analysed it sources of law
which include legislation, common law and EU law. Start-ups are required to comply with
different laws while operating their business in the United Kingdom, such as employment
law, contract law, copyright law and other, in order ensures that they smoothly operate their
business and sustain their growth.

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References
Armour, J., Black, B., Cheffins, B. and Nolan, R., 2009. Private enforcement of corporate
law: an empirical comparison of the United Kingdom and the United States. Journal of
Empirical Legal Studies, 6(4), pp.687-722.
Employment Cases Update. (2016) British Gas Trading Ltd v Lock & Anor [2016] EWCA Civ
983. [Online] Employment Cases Update. Available at:
https://www.employmentcasesupdate.co.uk/site.aspx?i=ed32307 [Accessed 6 March 2018].
Employment Cases Update. (2017) The Government Legal Service v Brookes
UKEAT/0302/16/RN. [Online] Employment Cases Update. Available at:
https://www.employmentcasesupdate.co.uk/site.aspx?i=ed35360 [Accessed 6 March 2018].
Goulding, S., 2013. Principles of company law. Abingdon-on-Thames: Routledge.
Gov.UK. (2018) Set up a business. [Online] Gov.UK. Available at: https://www.gov.uk/set-up-
business [Accessed 6 March 2018].
Harms, L.T., 2013. " Originality" and" reproduction" in copyright law with special reference to
photographs. PER: Potchefstroomse Elektroniese Regsblad, 16(5), pp.01-28.
Havelock, R., 2016. Return to Tradition in Contractual Interpretation. King's Law
Journal, 27(2), pp.188-213.
Ingman, T., 2011. The English legal process. Oxford, England: Oxford University Press.
Mahalatchimy, A., Rial‐Sebbag, E., Tournay, V. and Faulkner, A., 2012. The legal landscape
for advanced therapies: material and institutional implementation of European Union rules in
France and the United Kingdom. Journal of law and society, 39(1), pp.131-149.
Ward, R., 2011. Walker & Walker's English legal system. Oxford, England: Oxford University
Press.