Sources of Business Law and Dispute Resolution

The assignment discusses various sources of business law, such as common law, legislation, and European Union law. It also examines different forms of business organization, including sole traders, partnerships, limited liability partnerships, and limited liability companies. Furthermore, it delves into dispute resolution methods like arbitration, mediation, and negotiation. The assignment aims to provide a comprehensive understanding of business law and its application in resolving disputes.

UNIT 7 BUSINESS LAW

Table of Contents
INTRODUCTION ..........................................................................................................................4
LO 1 ................................................................................................................................................4
P 1 Sources of Law in UK .....................................................................................................4
P 2 The role of Government in Law – making ......................................................................5
LO 2.................................................................................................................................................6
P 3 Impact of company, employment and contract law On business using UK examples....6
LO 3.................................................................................................................................................8
P 4 Different types of business organisation which are legally formed.................................8
P 5 Explain How business organisation are managed and funded. ......................................9
LO 4 ..............................................................................................................................................11
P 6 Recommendation for resolving range of disputes using legal solutions .......................11
CONCLUSION ............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business law contains rules and regulation regarding formation and running a business
enterprise. Every organisation has to adhere to the rules and regulation contained in this law. It
governs all the commercial matters. This assignment will include Global Solicitors which is a
law firm situated in London. Moreover, It will consist of different sources of laws and the role of
government in law making and the application of statutory and common law in the justice court.
Furthermore, It will provide understanding about impact of company, contract and employment
law on business. Also, This study will inform about different types of business that are legally
formed. In addition, it will suggest recommendation for resolving disputes through legal advice
and support.
LO 1
P 1 Sources of Law in UK
Law consists of rules and regulation which everyone has to follow. The sources of law
consist of followings :
 Legislation : It is a law which is created by legislature. The legislation is passed by
Act of parliament. In UK the legislature is UK parliament which has the right to make

legal system. The UK parliament is the body that have the power to pass laws. It
consists of House of Commons and House of Lords (English Law: An introduction,
2018). The House of Common Consist of 650 members of parliament whereas House
of Lords consist of 800 members. There are two types of legislations which are
Primary and delegated. Primary legislation includes Act of parliament or Statutes
(Miller, 2015). The another is Delegated legislation which consists of Statutory
Instruments and are made by people that are acting under Authority of parliament.
For example, Equality Act, 2010.
 Common Law : These are the laws which are made through principles established in
cases over the centuries. In UK the legal system of England and Wales is a common
law. The decision of senior appellate court become part of law. These laws are made
through the decision of judicial person. The judgement will include the facts of case.
The case law require accurate reporting regarding the facts of case (Allen and
Kraakman, 2016). These laws are created in Courts rather than in parliament. The
decision of court is written in law report and then the decision regarding that
particular case becomes a law.
 European Union Law : UK is the member state of European Union that means EU
laws take precedence over UK laws. There are various European union laws which
are applicable to UK that consist of Companies Act 2006 which is derived from
European union directives (Vagts, And et.al., 2015). Another directives include
Treaties and regulations but these require unanimous agreement of member states.
 European Convention on Human rights : UK is a member state of European union
and thus it is a signatory to European Convention on Human rights. As per the
Human rights Act, 1998 which is applicable to UK also protect the rights of people
which are identified as per European Convention on Human rights.
P 2 The role of Government in Law – making
The government of UK propose new laws which are presented in parliament through
House of Lords and House of Commons. The parliament examines the work of government. It
has the Authority to approve the laws proposed by government. The House of Lord which are
appointed by Government are involved in making a law in parliament. First the bill is made by
Civil lawyers which is instructed by Government (Roach, 2016). This bill contains the details of

proposed law. The role of government in law making is to the law in action. The government
ensure that laws are followed properly by every individual and organisation.
The government in UK place a bill for making a law to be passed through House. After
the bill is passed through House of Lords. Then after the bill is sent to Royal Ascent in which
the monarch formally approved that bill and then it becomes Act of parliament. Government
ensures that the laws which are passed through parliament are properly followed in order to
make sure the implication of those laws (Macaulay, 2018). In UK, The Power is separated into
executive branch, legislative branch, Judicial branch etc. The executive branch is made up of
monarch, prime minister and other government ministers.
The legislative branch consists of Monarch, House of Commons and House of Lords. The
Judicial branch consist of Monarch, legally qualified judges and non – legally qualified members
of public. The government have the authority to change laws which are of concern public. Bill
of government is adopted by the cabinet into government's legislative programme (Jones, 2017).
The government plays an important role in law making in UK as it is the body which initiates the
process of law making in parliament. After the laws are passed through parliament and becomes
a law. The government have the authority to ensure that laws are properly followed by everyone
and ensure if there are any changes required in existing laws in order to secure people of country.
Moreover, Government have authority to make modification in existing laws as per the situation
existing in country.
Statutory Law is more formal body of The legal system. It is based on rules and
regulations which are passed through government and legislature. But Common law on the other
hand involved the decision of judges made in court. Common Law is also known as case law as
these laws are made through judgement passed in Court. In this law the judge is present whereas
in Statutory laws the Arbitrator is present. Common law come from precedent whereas statutory
law is made by government (Cameron, 2017). The decision of Judge is based on combination of
both the laws which consist of statutory and common law. In Justice court, the common law is
applied if the same case was present earlier and the decision was made by judges to treat all the
future case in same manner.
The justice court will form their decision if there is any statutory law applicable for the
particular case. The common laws are not enforceable by law and thus cannot become statutory
law. The present law reform in UK legal system consist of Lords of Appeal in Ordinary. There

are presently twelve such lords of Appeal. Moreover, twelve justice does not hear every case but
the case will be heard by panel of five justice. Legal system of UK become effective through
reform which cis a constitutional reform Act. Also, the reform includes choosing appointees of
Supreme court on merit by the independent Judicial Appointment Commission. It reduces
interference by the legislature or executive in court cases.
For example, If there is a murder case and judge has made a decision in that court then it
will be applicable by other junior authorities if the same type of case is enrolled afterwards.
Whereas, In Statutory law the decision are made on the basis of facts relating to the case not on
the basis of any former decision by judge.
LO 2
P 3 Impact of company, employment and contract law On business using UK examples
The law that affect the business operation consist of followings:
Illustration 1: Role of government
( Source : Bill, 2018 )

 Company Law : The organisation for running its business operations have to follow
the rules and regulation provided under the Companies Act, 2006. This law provide
framework for various operations which can be performed by firm. Moreover, it
provides understanding about concept of company which is a separate legal entity
other than its owner. The firm in order to perform their business activities have to
follow the principles of this law which are contained in Companies Act, 2006 (Beatty,
Samuelson and Abril, 2018). This law provides guidance to various firm regarding
different treatment of transaction of business. For example, starting up business
require registration of company as per standards set by Companies Act, 2006. Due to
impact of company law there are various formalities such as registration of company
name etc. are required organisation have to incur more cost due to which its
profitability is reduced. Moreover, Due to standards set by company law organisation
have to follow those standards which are sometimes not suitable to various
organisation situations.
 Employment Law : The law which provide rules and regulation to regulate the
relationship between employees and employer. As per Employment law every
organisation must perform their operation by considering the factors such as
discrimination, fair pay, employee privacy and safety in workplace. Employment law
has a significant impact on business operation as there are various rules and
regulation which organisation have to comply to perform their business activities.
Due to employment legislation organisation have to provide various employment
allowances to employees. Moreover, organisation in order to operate their business
operation have to provide its workers with proper safety at workplace In order to
reduce various harmful effect such as accidents at workplace. Moreover, it is
mandatory for organisation to follow the rules and regulation contained in this law.
Firm have to pay their workers with national minimum wages, protect to privacy of
their employees etc. For example, as per Equality Act, 2010 every organisation must
treat its employees equally without discrimination on basis of age, gender, religion
etc.
 Contract Law : It is the law which lays down principles of regulating an
enforcement of agreement between parties. The contract is formed when the

agreement between parties is enforceable by law. Organisation for forming any
contract have to follow the principles as laid down in Contract law. There are
different types of contract which consist of void, voidable, valid etc. The valid
contract consists of offer, acceptance, consideration, agreement, competency and
capacity and a written instrument. The organisation must follow the rules and
regulation as per contract law for formation of legally binding contract. Contract law
have a significant impact on business as organisation have to follow the rules and
regulation before making any agreement and for its enforceability. As per contract
law, the agreement must be in written and organisation which are making contract
orally are void and cannot be consider as contract due to which the contract is not
legally formed which means organisation cannot perform the contract.
These laws have a potential impact on business a there are various rules and regulation
which organisations have to follow to perform their various business activities. Legislation are
laws which consist of system of rules or statutes made by the government whereas regulation are
those which provide instruction about enforcement of law (Ayios, 2018). On the other hand,
Standards are those which consist of guidelines and requirement for various systems etc. All the
three are different things as legislation are rules formed by government and regulation provide
instruction to the public to follow those rules. Standards provide guidance for attaining the set
goals or they are generally accepted principles which must be followed by every organisation.
LO 3
P 4 Different types of business organisation which are legally formed
There are different types of business which are legally formed. It consists of following :
Sole trader : The business which is operated by a sole proprietor is known as sole trader.
This business is not registered with company house in UK. For starting a business a sole trader
there are less legal requirements which must be met. The sole trader does not require informing
the Companies House. The Vat registration for Sole trader is mandatory if the turnover is more
than threshold limit. The business is small and do not enjoy the limited liability status of
incorporated business. There is no requirement to prepare statutory records. For example, It
includes corner shops, plumbers etc.
Advantages

 There are fewer expenses involved in establishing sole trader business as compared to
other forms of business.
 The sole trader is the only one that have authority of making decisions and
controlling the various operations of business.
 The whole profit lies in the hand of Sole trader in this type of business.
Disadvantages
 The sole trader cannot sell an equity stake to raise capital.
 The owner has unlimited personal liability for debts, losses and liability of business.
 Hiring quality employees is more difficult as ownership cannot be shared.
Partnership: This is formed by two or more persons coming together to carry on a
business. There are two forms of partnership which consist of traditionally unincorporated
partnership and limited liability partnership. The legal status of traditional partnership is same as
sole trader. In partnership all the partners have equal right over the ownership of business. The
Unincorporated business are not required to inform Companies House regarding their
registration. For example, it includes solicitors, accountants etc. On the other hand, Limited
liability partnership is business which is incorporated at Companies House and share the profit
and loss of business equally with number of partners. Moreover, they are treated as incorporated
bodies rather than partnership firms. The liability of partners in this type of organisation is
limited.
Advantages
 Owners can start partnership easily and inexpensively.
 Taxation is simple as each partner individually pay taxes on their share of distribution.
 The partnership can be continued on the death of one of the partners if partnership
agreement permits for the same.
Disadvantages
 Partners are jointly responsible for all the obligation of business.
 Profits must be shared.
 As each partner is liable for action of the partners there are high chances of
Disagreement.
Limited Liability Company : This are the most common form of business registration
In UK. The Limited liability company allows owners, partners and shareholders to limit their

personal liabilities. Under, The members of organisation are protected from personal liability of
the debts of company (Schmidt, 2018). The company is required to be registered with
Companies House of performing their business activities. The structure of Limited liability
company is formed under statue law. Limited liability company is a legal form in which a
company provide limited liability to its owners. The limited liability company is legally formed
by legal entity, including corporation and individuals but a corporation can only become a legal
entity when only one partner have limited liability.
Advantages
 The owners have limited liability there personal assets are protected from the debts of
company.
 There is no limit on shareholders,
 Limited liability company is not required to have a board of directors.
Disadvantages
 Legal and accounting costs are higher than proprietorship.
 Limited liability corporation are required to file articles of incorporation.
 Shareholders dividend are not tax deducible for corporation.
P 5 Explain How business organisation are managed and funded.
Organisation are involved in business activities for earning profits. It is required by firm
to ensure proper management of activities in order to achieve their targeted goals of firm. It helps
the firm in achieving their goals and objectives effectively and efficiently. Management of
organisation includes organising, planning, controlling and monitoring the various activities of
business to enhance their performance. It requires management of activities, person etc. The
management of business is required in order to accomplish the desired goal of firm. Business
organisation are managed through effective planning strategies.
The management of business ensure that all the activities which are performed by firm
are performed in the right manner to gain the desired result. The management make planning for
various activities which will be carried out by organisation. Business is managed effectively by
making decision which will helps organisation in achieving their goals. Business is managed
properly by engaging the employees to work properly towards common goals of organisation. It
is important to manage the activities of business otherwise the business will incur losses. It is

required to monitor the performance of employees working in organisation to identify their
performance.
Management is done effectively by allocating the resources properly to accomplish the
desired goals of organisation effectively and efficiently. In Sole Trader, the business is managed
by the owner as it the person that is performing all the activities of business. The sole trader
performs all the function of management in order to achieve the desired goal. In partnership, the
management is done by all the partner (Kusiak, 2019). The partners perform all the operations of
business. Partnership is formed by two or more persons and thus the management in the hand of
person that carry business activities. Moreover, all the partners make decision and planning for
improving their firm's performance to accomplish their objectives. In companies, the
management is done by directors which have authority to make decision regarding business
activities.
Sources of Funding that can be used by different firms
Funds are required for running day to day operations of business. There are different
sources of funding which can be acquired for running various business activities. It helps
organisation in performing their business activities easily.
Organisation for performing its business operation can acquire funds through various sources
which consist of :
 Family and Friends : The sole trader in order to gain funds can gather through
borrowings from friends and family to perform various business operations. It is an easy
source of finance for sole trader because it can be attained easily and can be paid back at
any time due to trust among them.
 Personal savings : Sole trader can also use this source of funding for performing its
various business activities. This is the personal saving of sole trader which can be used by
them for performing business operations.
 Bank Loan : The bank loan can be used by any form of organisation. Firms borrow
money from banks at certain rate of interest (Sources of Business Finance, 2017). It helps
companies to perform their business operation through the funds provided by banks and
are paid back to bank after a fixed period with interest.
 Crowdfunding : The firms that require funds can use this option in which they can
acquire funds from large number of individual (Williams, 2018). The crowdfunding

includes use of social media site to brings investors together to invest in different
companies.
 Venture capital : It is a form of private equity which is provided to start- up companies
that have potential to grow. It is capital which is invested in small business. The people
that invest this capital are known as venture capitalist.
 Angel Investors : This are the private investors that are former entrepreneurs and have
high net worth. These people invest in start-up and small business and take share in
business in return of investment.
 Retained earning : This are the earning of organisation are reinvested in business for
performing various business operations. Retained earnings are profits earned by company
and is not shared as dividend to shareholders instead it is used in organisation for
carrying business activities.
Partnership can use crowdfunding and venture capital for performing their various
activities. Through venture capital partnership firms will be able to get funds for their operations
through private equity.
LO 4
P 6 Recommendation for resolving range of disputes using legal solutions
It is recommended to parties to use ADR for solving various legal disputes. Dispute
resolution process tries to resolve and check conflicts which enables person to maintain
cooperation. There are different methods which can be used for resolving disputes such as
Alternative Dispute Resolution. It is used to describe different modes of resolving legal disputes
(3 different ways of solving business disputes – which one to choose, 2018). This is a process in
which an independent and impartial third party considers evidence in dispute and makes a
decision and helps the parties to come to an agreement. There are different ADR methods which
consist of Arbitration, mediation, Negotiation etc. Negotiation is a process through which a legal
dispute can be resolved. In this, People that disagree can come together to discuss the problem
and research at a mutual agreement to solve the dispute. The alternative dispute resolution
methods assist organisation in resolving various legal disputes outside the court through use of
different methods. Mediation is the other way through which a legal dispute can be resolved. In
this process a mediator is present which is unbiased and to assist people in their negotiation. In
this process, the mediator can provide the parties with suggestion regarding their dispute to

provide them solution for resolving that matter. Mediator provides the parties with solution
where both the parties can be satisfied by that decision (Keller, 2018). Arbitration is also
recommended for solving various legal disputes.
The dispute is resolved by Arbitration if it is not resolved through face to face negotiation
or through mediation. In Arbitration, a neutral person or a panel of people hear the facts and
issues regarding disputes and then makes a decision. Arbitrators are experts in specific area of
law. The Arbitrator is chosen by parties together and it has the responsibility to make a right
decision after hearing all the facts regarding dispute. There are different sources of legal advice
and support such as solicitors firms which provide advice on various legal matters. For example,
Global Solicitors which is a law firm that provide legal advice on various matters (Yu, 2018).
The parties can use different methods of Alternative dispute resolution for various matters which
require legal advice for solution.
For example,
Patrick which was appointed as one of director of Planet Mars Limited a few months ago.
The company does not have a constitution. Also, It does not enter into separate contract of
employment with the company. Patrick having disputes with other directors. A rival Firm offered
Patrick a Profitable offer. Then Patrick resigned from that position as director to take up the
offer. But the directors of Planet Mars are threatening to sue Patrick on the basis they have a
verbal agreement that a senior manager cannot take up a position with rival for a period of 5
years if they are to leave.
In this situation The dispute can be resolved through ADR in which both the parties agree
mutually on resolving that dispute. They can use Mediation for solving this dispute regarding
leaving the company. Patrick can leave the position of Director as there is not contract of
employment between the Patrick and company.
CONCLUSION
From the above study it has concluded about different sources of law which consist of
common law, legislation, European union law etc. Moreover, It has provided understanding
about impact of company, contract and employment law on business. This assignment has shown
different form of organisation which consist of sole trader, partnership, limited liability
partnership, and limited liability company. Furthermore, It has provided with various legal

advice for resolving disputes such as Alternative dispute resolution methods which consist of
Arbitration, mediation, negotiation etc. It helps parties in resolving disputes on various matters.

REFERENCES
Books and Journals
Allen, W. T. and Kraakman, R., 2016. Commentaries and cases on the law of business
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Ayios, A., 2018. Trust and Western-Russian business relationships. Routledge.
Beatty, J. F., Samuelson, S. S. and Abril, P. S., 2018. Business law and the legal environment.
Cengage Learning.
Cameron, P., 2017. International energy investment law: the pursuit of stability. OUP Catalogue.
Jones, L., 2017. Introduction to business law. Oxford University Press.
Keller, W. H., 2018. Investigating Student Engagement in Technology-Enhanced Learning at the
Intersection of Business and Law.
Kusiak, J., 2019. Rule of law and rules‐lawyering: legal corruption and ‘reprivatization business’
in Warsaw. International Journal of Urban and Regional Research.
Macaulay, S., 2018. Non-contractual relations in business: A preliminary study. In The Law and
Society Canon.(pp. 155-167). Routledge.
Miller, R. L., 2015. Business Law Today, Standard: Text & Summarized Cases. Nelson
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Roach, L., 2016. Card and James' Business Law. Oxford University Press.
Schmidt, S. J., 2018. Marketing the law firm: business development techniques. Law Journal
Press.
Vagts, D. F. And et.al., 2015. Transnational business problems. West Academic.
Williams, J. L., 2018. System and method for processing and dynamically segregating business
assets. U.S. Patent Application 10/037.505.
Yu, D., 2018. Chinese business law. Springer.
Online
3 different ways of solving business disputes – which one to choose. 2018. [Online]. Available
through: <https://www.njordlaw.com/different-ways-dispute-resolution-whats-
difference/>
English Law: An introduction. 2018. [Online]. Available through
:<https://www.inbrief.co.uk/legal-system/english-law/>
Sources of Business Finance. 2017. [Online]. Available
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INTRODUCTION
1

REFERENCES
Books and Journals
Online
2