Business Law: Legal System, Legislation, and Organizational Structures

This guide provides a comprehensive overview of business law, covering topics such as the legal system, key legislation, and different types of business organizations. It explains how the legal system works, the impact of different laws on businesses, and the advantages and disadvantages of various organizational structures. It also explores how organizations are managed and funded in both the public and private sectors.

BUSINESS LAW

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
1. Explanation of the legal system, different sources of law, the role of government in law-
making and how statutory and common law is applied to businesses........................................1
2. Critical reflection of the legal system using examples to demonstrate strengths and
weaknesses..................................................................................................................................3
3. An explanation of the key legislation, regulations and standards that a new business needs
to be aware of..............................................................................................................................3
4. Different laws which is needed to be followed by organisation and there potential impact on
company......................................................................................................................................3
5. Detailed account on different types and classification of business organisations in the public
and private sectors, providing specific examples to illustrate different legal structures with
their advantages and disadvantages............................................................................................4
6. How different organisations are managed and funded in both public and private sectors......6
PART 2............................................................................................................................................6
1. Brief overview of Contract law, employment law, Company law, etc...................................6
2. Salient legal points of each case..............................................................................................7
3. Suggest an appropriate legal solution to each of the problems...............................................7
4. Provide justification for the advice and solution given...........................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business law is defined as the branch of law which tells that how any of the business
organisation can be managed in systematic manner for achieving the goals of an organisation. In
context of the business firms, it is necessary because it will help to take business decisions which
are required to be taken at each and every steps. In context of the file, it is has been categorised
into two different part. In part one, there will explanation that what is legal law and how it affects
the business organisation. Even there will be explanation that how company can be setup and
what are the basis requirement which is needed to be considered. In part second, three different
cases will be solved in which it will be explained that how issues can be resolved.
PART 1
1. Explanation of the legal system, different sources of law, the role of government in law-
making and how statutory and common law is applied to businesses.
Legal system is defined as the process for interpreting and enforcing any of the new law
within the nation. It explains about the rights and responsibilities that a person should follow
while living within the country where it is based on two different law i.e., civil law and criminal
law. In context of UK, it has fixed pattern of laws and policies where each and every regulations
need to be considered. The power of taking any of the crucial decision is in the hands of
Parliament house. There policies are non unchallengeable because as per the laws and regulations
of Royal Ascent Act 1961 no one can raise question against the decision taken by queen. There
are number of sources of law in UK while help to commence different types of laws and
regulations within the country. Beneath, there is the detail explanation about it:
 Act of Parliament: It is the source of law in UK which have the power to commence or
amend any of the existing law for future changes. Whenever they commences any of the
law, it is necessary member of parliament must take prior approval in order to make bill
as a law.
 Common law: It is the law which ensures that law will remain common in each and
every geographical area. This laws are creates by higher level of court which even binds
the lower level of court. This law is helpful in taking the decision in court where there is
no solution available from the side of statutory law.
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 European Union law: It is one of the power source in UK which commences laws. They
have the power to interfere in the legal matters of the company. It will help to support
house of parliament as it is not possible for them to commence each and every laws
single handedly. Also, it is one of the main source for UK which have commenced more
then half of their laws and regulations.
In any of the country, there is the huge of ruling government as they are the one who
decides what is right and wrong for the better future of nation. In context of UK, member of
parliament have been classified into two parts i.e., house of common and house of lords. For
commencing the law, firstly is necessary for member of house of common to draft the bill so that
further decision can be taken on it. The detail explanation about the bill is discussed below:
 First Reading: The primary work of member is to read out the drafted bill and provide
the suitable title so that bill can be discussed further in next step.
 Second Reading: It is one of the stage where available member in second reading decides
that whether bill is suitable or not to discuss at other stages. If majority thinks that it can
be discussed at other stages as well then it is forwarded to other level.
 Committee Stage: It is the stage where it is important for the member to take necessary
steps that what are those points which can be still improved so that chances of obtaining
better results increases.
 Report Stage: In this particular stage, the member are given the responsibility that they
must amend the points committee stage things that further improvement can be done.
 Third Reading: After completing all of the necessary steps, it becomes important for the
member of third reading to do voting and come to final result that whether bill should be
passed or not. For passing, majority of member should agree on it.
 House of Lords: It is the stage where all of the above mentioned steps should be
conducted again so that further steps can be taken and necessary changes can be done. It
automatically improves the level of bill so that it in future better results can be obtained.
 Royal Assent: The stage where Queen has to take final decision that whether bill should
be passed or not and for that her approval is must. If she passed it then bill converts into
law or Act.
Statutory and Common law are two most essential law for taking any of the business
decision but even it helps to declare any of the decision within the premisses of court. Talking
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about statutory law, there are number of laws which has been commenced which tells that how
any of the business decisions can be taken. It helps to sort out any of the legal issues when any of
the typical situation arises. In case of common law, there are number of cases where statutory law
have not discussed any of the topic and in that situation it is necessary for company that they
must common to some points. For doing that common law helps to commence new law which
helps out to deal with situations.
2. Critical reflection of the legal system using examples to demonstrate strengths and weaknesses.
The law making body of UK is very powerful which helps to take any of the decision and
that can be sustained for longer period of time. The strength of legal system is that there is a
political sustainability due to which laws and regulations related to business organisation doesn't
changes due to which company gets opportunity to think that how they can plan their strategies.
When it comes to weaknesses part, it can be said that company is not allowed to raise questions
against the decision which are taken by legal system due to which sometimes company have to
faces different organisational issues. Also, power of UK legal system is in single hand due to
which involvement of other department automatically decreases as there decision will not be
considered in any of the situation.
3. An explanation of the key legislation, regulations and standards that a new business needs to
be aware of.
In any of the business organisation, legislation, regulations and standards plays the crucial
role as it helps to decide that business should be governed in any of the situation. In case of
legislation, it is the most power body of law which commences the law and even it commences
for organisations as well. All of the laws which has been enforced by statutory body must be
complied on businesses. Regulations are those which says that how those laws need to be applied
and even it is a kind of order for organisation which is needed to be considered at any cost. At
last, in case of standard, it can be said that standards helps that whenever any of the take any of
the decision then what should be its standards of implementing. If in any of the situation
company fails to comply with standard then penalty can be imposed upon them.
4. Different laws which is needed to be followed by organisation and there potential impact on
company.
Different Laws Potential impact on company
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Contract law It is one on the most important law for business organisation as it tells
that how any of the work can be concluded in successful manner. The
potential impact of company is that it will automatically increase the
level of certainty within business relations and provides more
confidence to company that the other party will do what they said they
would do.
Law of torts It is explained as the law in which one of the party has to suffer just
because of the default performed by other person/organisation. The
potential impact on company is that it will reflect the negative image of
business due to which company might have to suffer from losses in
future period of time.
Copyright law It is the law which allows other person to take the legal rights to product
the similar form of products within the market. It has the potential
impact on business organisation as it will not allow other organisation to
copy the same product which has invented before due to which
company can get chance to earn more profit.
Employment law It is defined as the law which governs that rights and duties among
employer and employees. The impact of employment law is that it will
not allow company to do discrimination with any of the employees
which will boost up the motivation level of each worker through which
goals can be accomplished easily.
5. Detailed account on different types and classification of business organisations in the public
and private sectors, providing specific examples to illustrate different legal structures with
their advantages and disadvantages.
There are several types of business organisation which have different legal structure of
formation and it has been explained below:
Sole Proprietorship: It is small form of business where investor have the opportunity to
perform their task easily as it only covers limited portion of area. The one one who starts sole
proprietorship have authority to take decisions of own. At the time of formation of sole
proprietorship, it is important person should have national insurance number, register of self
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assessment and also must decide the name of firm. The main advantage of commencing sole
proprietorship is that organisation can be setup easily by implementing less efforts where as
disadvantages is that there will be no legal rights as it is not legally registered in the eyes of law.
Partnership: It is explained as the formal arrangement between multiple parties where
they all come together to manage and operate each and every business activities. It is necessary
that profit between the partners should be share as per the amount of capital invested within the
business. The legal structure of partnership says that firstly name of the firm should be selected
and after that partnership deed is needed to be drafted and then it is necessary to do registration
with HMRC (Set up a business partnership. 2018). Talking about the pros of commencing
partnership firm is that legal structure allow to commence firm very easily by consuming less
period of time. In case of disadvantage, it is said that conflict can be easily created in this types of
organisation as there are multiple partners in which every wants to conduct business activity in
their own style.
Private Company Limited By Share: This is the company which has the right to
perform their activities at greater platform by including number of member as a shareholders of a
company. The legal structure to commence any of the private company limited by share is that
firstly member are required to choose the name of company which should not be similar with
other organisation, secondly it is necessary that list of directors, subscribers and company
secretary must be selected. Then,documents are needed to be submitted within Companies House
to start the business activity. Advantage of commencing private company limited by share is that
company there is no requirement to conduct statutory meeting which increases the expenses.
Discussing about disadvantage, it is not allow to issue any of the share to outsider (in public).
Public Limited Company: This are generally the company which have the rights to
perform business activity at international level where shares can be offered to public at large. It is
one of the business where number of laws and regulations applies and it must be followed as
well. The legal structures to form any of the public limited company is that name, address, first
shareholders and director are needed at first stage. Then, there is the requirement of preparation
of Memorandum and Article of Association which will tell that where company is going to deal
and what will be there main agenda through conducting the business activity. At the end stage,
documents are needed to be submitted within Companies House. Advantage of public limited
company is that shares can be issued to any one and even liability will be also limited. There are
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lots of legal formalities which are needed to be met and that is one of the main disadvantage of
public limited company.
6. How different organisations are managed and funded in both public and private sectors
Organisation How it is managed How it is funded
Limited companies This are the organisation which is
needed to be managed the
appointed manager who have the
detail of each and every work.
It is main funded by the help of
bank loans, financial
institutions, credit card,
investment by subscribers.
Corporations It is needed to be managed by
shareholders, directors, company
secretary and many more.
They are one of the company
where multiple choices are
available in which shares can
be issued within the market is
most important, bank loan is
the option, peer to peer lending
can be done and many more.
Social enterprises Trustees are the one who manages
the social enterprises, secondly
there are shareholder as well in
some of the cases who manages
each of the activity.
Social funding, donations from
government agencies and
public is also one of the source
of raising fund in it.
PART 2
1. Brief overview of Contract law, employment law, Company law, etc.
Contract law: The law which deals with all of the matter related to singing the agreement
between two or more then two parties is known as contract law. It is one of the law which decides
the base of any of the project which is conducted within the organisation. It is necessary that all
of the work must be conducted according to requirement of law.
Employment law: The law which expresses about the relation of employer and employee
is known employment law. It covers various laws in it such as labour law, wages act, equality act
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and many more. All of the laws must be consider and decision should be taken by understanding
the requirement of situation.
Company law: The law which govern the companies, performing their business within
the specific area is known as company law. It is one of the law which tells that what types of
decisions are required to be taken. To run any of the company, it is necessary that it must be
registered under Companies House.
2. Salient legal points of each case
Case 1: It is one of the case which took place between Gordon and Orange Computers
Ltd store. There was the agreement between company that Gordon that his annual salary will be
£10,000 and commission payments (at 9%) on any computers and peripherals he sells. Due to the
tough competition in the market company was unable to make profit so both of them singed the
contract that in year 2015, 2016 & 2017 Gordon will work on commission basis only. But, in
year 2016 company started to earn better so by looking at this Gordon wants to claim his
previous contract.
Case 2: The salient legal points of case one says that there was the miscommunication
between Janet and Virgin Media. The engineer of the virgin limited had not completed his work
as he had connected the services of internet but due to technical errors they were not able to
connect the lines of telephone. But, at time of sending invoice the amount was included of both
telephone and internet which was not appropriate as per the situation. As line was connected after
three weeks so she wants that company should only charge from the day when they started to
provide the service.
Case 3: In this particular case, company was unable to deal with the situation as bed debt
was increasing day by day. By looking at this situation, company was shifting the date of
payment to their creditors. Also, company was seeking for additional three week time for doing
repayment. But, one of the creditors filed the winding up petition against the company. Now,
company wants to avoid the compulsory winding up petition.
3. Suggest an appropriate legal solution to each of the problems
Case 1: In this respective case, there is the option available with company that they can
take the help of conciliation method. In conciliation method, disputes are solved by trying to
convince both the party that how they can reach near to the terms and condition of the contract.
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Case 2: It is one of the case, where problem is related with miscommunication between
both the parties. Here, they have the option that to take the help of mediation method of sorting
the problem. Mediation is the process in which third person is appointed and who have the
responsibilities to deal with the case by considering the points of both the parties.
Case 3: It is the case in which it is important for company and creditors to take the help of
Arbitration method of solving the issues. Arbitration is defined as the method in which complex
problem are solved without involving court proceedings. Decisions taken by arbitration should be
followed by disputed parties.
4. Provide justification for the advice and solution given
Case 1: There is the dispute between the formation of contract. Company is saying that
they have formed new contract but Gordon is saying that the base of forming the contract doesn't
exist any more so it is necessary that they need to solve out the case by forming new contract or
trying to reach as near as possible to the contract which they have formed.
Case 2: Mediator can suggest them that what was the main reason that miscommunication
arises between both the parties. This will be one of the method that can easily sort out the issue
and even it will guide that from which date company should charge the payment of telephone bill.
Case 3: As both parties will suffer if court proceeding starts as they are length process
and it is better for business organisation to take the fix data that when they are going to do the
payment. Also, creditors will have to not face any sort of problem for asking the date of payment
which is needed to be done time and again.
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CONCLUSION
In short, it can be easily understood that business law is one of the department of law
which tells that how company can be organised. The legal structure have strength as well as
weaknesses which clarifies that each of the organisation should determine about strength and
weaknesses and after that they are required to planning and plotting. Different company have
different types of style in conducting business where some of them are beneficial and some of
them creates problem.
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REFERENCES
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Senat, J., 2014. Whose Business Is It: Is Public Business Conducted on Officials’ Personal
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Deakin, S. and Haldar, A., 2015. How should India reform its labour laws?. University of
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Gabaix, X., 2016. Power laws in economics: An introduction. Journal of Economic Perspectives.
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Martin, N. J. and Rice, J. L., 2014. Influencing clean energy laws: an analysis of business
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Online
Set up a business partnership. 2018. [Online]. Available Through: <https://www.gov.uk/set-up-
business-partnership>
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