Business Law: English Legal System, Sources of Law, Role of Government, Legal Formation of Business Organizations, Management and Funding

This study discusses the English legal system, different sources of law, the role of government in law making, legal formation of business organizations, and how they are managed and funded.

Unit 7 - Business Law

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
English legal system and law.......................................................................................................3
Different sources of law...............................................................................................................3
Role of government in law making along with its application in the justice court....................4
Legal formation of different forms of business organisation.......................................................5
How business organisations are managed and funded.................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business law have been referred to as the significant aspects to run the business as it is
helpful in keeping the business activities safe and secure in order to accomplish the goals in the
efficient manner (Bell, 2018). The present study will have the discussion of various sources of
making law which have the clear aim in decreasing the illegal activities such as frauds, crimes
and making a safe country. It will also deal with role of government in law making and at the
end, it will deal with legal formation of different forms of business organisations and how they
are managed and funded.
MAIN BODY
English legal system and law
The English legal system is a proper consistency of several rules and regulations. There
is no written constitution in UK rather it is partly written and un codified. This is important for
the citizens to follow the laws and rules as against any level of legal action and lawsuit for the
business and every country have their own legal systems and rules which differ in their manner
which is required to be followed by the people of that country. In the context of UK, it consists
of 4 countries which are England, Scotland, Wales and Northern Ireland. On the other hand,
there are some laws replicable with slight variation (Bishop, 2019). The Parliament in UK
comprises of two houses which are The House of commons and the house of Lords which helped
in formation of the separate houses and the government imposed different state activities. As the
consideration of the example’s European convention of human rights as in1998, the human rights
Act was passed in UK.
Different sources of law
There are several laws which are protecting the people and different business activities
against any type of lawsuit and illegal activities. There are primary and secondary sources and
Some of them are discussed below-
Primary source
 Legislation: These are created by the legislature in order to gives the rights or order to
create the laws. The legal system consists of House of Lords and the House of commons
who have the power to pass the law (Curto, 2018). The Parliament have the supreme
authority to pass any law and no court can question its validity.
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 European Union law- UK have been important part of the European Union. This law is
applicable automatically on UK. But after Brexit, UK is free and not bound to follow the
regulations which are made by the EU. Case law- This law has been followed by the England and Wales which are 2 important
countries of the UK. It can be developed as the common law as these are judge made
laws. The judges either interpret the existing law or make new laws according to the need
of the society.
Secondary source
 Legal encyclopedia- This is the best way to start the research as it comprises of the legal
facts, issues and case laws which clear the concept of laws.
 Parliamentary and non parliamentary debates- These include the debates, discussion
and amendments of the bill which are proposed in Parliament while making any law.
Role of government in law making along with its application in the justice court
The Parliament is the supreme authority to enact the law and there are series of steps
which are required to be followed by the houses of Parliament so that laws can be enacted.
 Bill – This have been the new law and the draft or the proposal in the Lord of house or
the Commons.
 First reading – The Proposed bill is passed out to the chambers in the Lord of House or
the Commons for first reading (Cornforth, 2020). Here the name is read out only.
 Second reading- This have the critical analysis of the report by discussing the bill in
detailed manner in order to make it effective. Discussions take place regarding the whole
bill from the start to the end. No Votes are taken at this stage.
 Committee stage- This have the reviewing by the MP along we have the detailed intro-
mission of the bill for making best decision. Amendments are suggested at this stage.
 Report stage- Another opportunity is given to examine the bill and amendments are
debated. Votes take place at this stage.
 Third reading- At this, the aim is to close the loopholes and a final chance to make the
amendments is given. Final reading- At this stage, there is firm acceptance and the rejection on the basis of the
majority of votes for the final decision. Amendments are accepted or rejected.
Application of law in courts
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The courts in UK have the power to enact the laws which are called the common law.
They either interpret the existing law or make new laws according to the needs and requirements
of the society. The common law have the same relevancy as the statutory law.
Legal formation of different forms of business organisation.
There are mainly four ways in which the business have been setup. These include the sole
proprietorship, corporation, partnership and limited liability company or LLC.
Sole Proprietorship
This is one of the simplest level of business which have the less requirements of the
formalities. It only requires the registration with the HMRC and there is no requirement to
register the sole proprietorship at the Companies House. In this the owner is personally liable
for the debts and liabilities of the firm.
Partnership
In this, two or persons undertake the responsibility to run the business. They are called
the partners. They mutually share the profit, loss, debt, liability and responsibility to handle the
firm. Only the registration at HMRC is required and the partners also sign a partnership
agreement which clears their share in the business. (Connolly and Jackman, 2017).
Corporation
This is the separate legal entity for the protection of the legal actions. This have gat deal
of security and helps in accountability for the respective action.
Limited Liability Company or LLC.
Companies are the artificial personality which have its common seal. It is distinct from
the owner. The limited liability company states that the owners have the limited liability for the
debts according to their share in the business or the capital contribution. The owners are called
the directors.
How business organisations are managed and funded
The businesses are managed and funded according to their structure. These are discussed
below- Sole proprietor- The owner is responsible to manage the daily operations of the business.
These are funded either by the personal savings of the owner or the bank loans.
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 Partnership- These are managed by the partners according to their agreement or the
share in the business. They mutually take the responsibility to manage the daily
operations. These are either funded by the partner's personal savings or the bank loans.
 Companies- These are managed by the owners of the company who are called the
directors. The shareholders elect the board of directors who represent the interest of all.
These are funded either by raising the debt or equity capital.
CONCLUSION
It is concluded from the report that the English legal system is partly written or un
codified. There are two types of law which are statutory and common law. There are also many
types of business organisation which are managed and funded according to their legal structure.
These include sole proprietorship, partnerships, corporations and companies.
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REFERENCES
Books and Journals
Bell, J., 2018. Sources of law. The Cambridge Law Journal, 77(1), pp.40-71.
Bishop, J., 2019. Determining the risk of digital addiction to adolescent targets of internet
trolling: Implications for the UK legal system. In Internet and Technology Addiction:
Breakthroughs in Research and Practice (pp. 641-652). IGI Global.
Curto, J.C., 2018, April. Exploring Legal Terminology: Types of Business Organization in the
United States. In Ideas (Vol. 3, No. 3).
Cornforth, C., 2020. The governance of hybrid organisations. In Handbook on Hybrid
Organisations. Edward Elgar Publishing.
Connolly, E. and Jackman, B., 2017. The Availability of Business Finance. RBA Bulletin,
December, pp.55-66.
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