Business Law Unit 7 Report

This report examines the sources of law in the UK, including Parliament, judiciary, and European Union regulations. It analyzes the impact of contract, employment, and company law on businesses, exploring different business structures like sole proprietorships, partnerships, and corporations. The report also provides recommendations for businesses operating in the UK, considering factors like resourcing, construction, and taxation.

Business Law Unit 7

INTRODUCTION
Business law is that law which is governing commerce and business regarded to as
branch of civil law which is dealing with both private and public law. This law will be regulating
hiring practice, manufacturing, sale of goods and corporate contracts. The United Kingdom
company law will regulate all companies and corporation which are formed under Companies
Act 2006. The project report will outline the different sources of law in UK. The project report
will further explain various laws like contract, employment and company law and their impact
on business. This will further continue with type of business organisation and the way in which
they are formed in legal way out. The report will also cover the type of business organisation like
sole proprietorship, partnership and corporation by including how will they be managed and
funded. In addition to this the report will cover recommendation regarding the correct legal
solution in way of resolving range of dispute.
ACTIVITY 1
P1. Various source of law
Sources of law – The sources of the law are the origin form where the law is being
obtained. The source of law binding the rule that enable any state to govern its region.
Different sources of law are as follows -
Parliament and statute –The Parliament of UK is having highest and supreme power
over all other political parties so this is called to as supreme legislative body. Parliament is also
having power over the overseas territories which mean that it is regulating the trans-border
activities as well. Thus this parliament is having mainly 3 parts which are primary chambers
including House of Lords, House of Commons, Sovereign Queen of parliament.
Judiciary – Judiciary is made up of judges and courts which are termed to as Judicial
Branch of government they are appointed by the president of UK and confirmed with Senate
(Hill, 2017). The judiciary is divided into 3 legal systems including Scotland, England, Wales
and Northern Ireland. The supreme court of UK was established in October 2009 which is
following Constitutional Reform Act 2005.
European Union –This comprise of about 28 members state of European nations of
political and economic union. There are 2 courts under European Union namely Court of Justice
and General Court both of them dealing into different target (Wettstein, 2015). All the citizen of
EU are having right to vote directly into election of parliament within EU. The General court of
1

justice will be dealing with all cases which are pertaining with company and individuals. While
Court of Justice is based on cases of institution and member states
Various laws an Organisation follow:-
Employment Rights Act 1996 –This is the act of parliament of UK which is laid down
for the rights and duties of employees who are working in factories, companies and other field
work. The Employment right act was introduced in 1996 by changing the existing law which was
related with UK labour law. The act protects all employees against time of rights, unfair
dismissal from their duty, flexible working hours (Payne, 2018). This also illustrates about
employee’s particular terms and condition in written form and it is also mentioned that
employees should be given the contract of working within their 2 months of joining.
Employment right act 1996 will also be paying time off for work for the public duties and
dismissal of health and safety related
Company Act 2006 – The Companies Act 2006 is an act of parliament of the United
Kingdom. The Act systematizes to a certain existing common law principles. It implements the
European Union's Takeover. The Companies Act introduces various new provisions for the
public and private companies (Types and forms of the business, 2018). The Companies Act 2006
amends almost all the Companies Act 1985. The Companies Act has a certain provisions related
to the Company's formation, constitutional documents, corporate capacity and share capital. The
auditors are permitted to limit their liability in the companies Act 2006.
General Data protection regulation 2018 –This regulation is based on protection and
privacy setting of individuals who are citizen of European Union and European Economic Union
(EEA). The General Data protection regulation is making provision against possession of
personal data with use of intelligence service. The act introduces the new offences and disclosing
the personal data. The General Data Protection Act implements the European Union Law &
Enforcement directive.
Health and safety Act 1974 – Under this act there are all duties and responsibilities of
employer, employee and companies are laid down for providing and maintaining health and
safety within workplace. This act was laid down in 1974 by the Parliament of UK so that
extensive system of specified provision which is related to industries and risk (Conley, Torbus
and Joanna, 2019). Health and safety act will be comprising of healthier and safer environment
for all employees and people working within industries for maintaining risk free environment.
2

Under this act it is also required for employees that they are giving their suggestions and
providing safety within workplace.
National Minimum wage Act 1998 – The National Minimum Wage Act 1998 creates
minimum wage scheme in United Kingdom. On 1 April 2018 the minimum wage was £7.83 per
hour for the workers whose age is 25 years and above. £7.38 per hour for the workers whose age
is between 21 to 24 year. £5.90 per hour for the workers whose age is between 18 to 20 year (The
introduction of the National Minimum Wage 1998, 2018). The National Minimum Wages Act
supports the fair pay for the employees.
P2 Role of government in law making and statutory and common law is applied in the justice
court
The central power of country is having most of the authority to perform 3 of the core
function which include passing law for citizen, representing them and then monitoring all action
of state government. Each and every law in United Kingdom is made by passing of bills which is
including all progress of number stages in both the House of Lords and House of Common. So
every bill should be agreed with both the house of UK Parliament and then receiving written
consent from Queen (Snyder, 2015). This is an official notice that the Bill is gone to be
proposed. It requires time to prepare and discuss. The principles are considered by the both the
houses of the parliament. The Bill introduces the first reading. The official notice is going to
propose the Royal Assent and if the queen denied it will not amendment. The idea of the bill first
comes from the side of the government. This is government sponsored bill (Ng, 2015). The bill
must pass through both the houses. Writing a bill called as drafting. Then the bill is formally
shown to everyone and when the bill first announced in parliament called as a first reading. The
committee stage forms the group of members is the either House that looks the bill and suggest
the house of the parliament. There are two types of committee -
Standing committee – The members regularly look at the bill in the particular area of the
government.
Committee of the whole House – The bill is examined by members of a House of parliament.
For the preparation of the new laws, the legislature has to supervise the government
consultations that ensure the effective pre legislative investigation. The legislation parliament
consider and undertakes the scrutiny for the effective deliberation and seeking for identifying
that the national consensus where feasible (Muchlinski, 2018). The legislators regularly
3

scrutinise the current implementation of the polices and audit the effectiveness and efficiency of
government services and polices. The Parliament is the highest legislative body in the United
Kingdom (Ball, 2018). The parliament has a responsibility to check the work of the government
and examine and approving the new laws. The Parliament is also known as Legislature.
P3. Company, Employment and contract law has a potential impact upon business
Contract – This is a document which comprises of agreement between 2 or more
regarding some intended activities and is enforceable by law.
Company Act 2006 –This is the act of UK parliament that is mainly related with UK
company law and is the longest act in UK with about 1300 sections. The act clearly defines type
of entity, their legal formation and termination part as well. Companies act came into force on 1st
October 2009 by overriding Companies Act 1985. The Companies Act has impact upon the
business (Do and Blackburn, 2015). The Companies Act has new regime that governs the
disclosure of director’s home address there is no requirement of directors’ home address for the
public inspections. The act carries investments and subsidiary definition as well. The businesses
have to follow proper guideline of the Company's Act and share capital has to distribute on the
basis of the Company's Act. According to the Company's Act every business has to be listed
(Merry, Davis and Kingsbury, 2015). According to the Company's Act the internal audit is
necessary. The business is now following the reverse merger concept after the amendment of this
Act. Under the act the statutory statement director’s duties in particular the duty to promote
success of the company.
Employment Rights Act 1996 – The Employment Rights Act 1996 has potential impact
upon businesses. The businesses are implied terms of employment including minimum wages.
The employees are facilitating with restricted working time. The businesses are now offering
flexible working hours to their employees. The Businesses are now providing health care
facilities to their employees (Howe, 2016). They are insuring that there is proper canteen and
water cooler facility should mandatory available to their employees. Proper first aid facilities are
given to the employees after amendment of this act.
Requirement for Valid Contract
Mutual Assent – The parties should have understanding regarding what the subject
matter of their contract is.
4

Offer and Acceptance – The parties should have clear communication. The offer must
be made by one party to another and acceptance is being confirm by other party in unambiguous
terms.
Consideration – The parties should mutually exchange something of value in order to
make the agreement bound.
P4
Sole Proprietorship – It refers to the business entity that is governed by the one person.
This is least costs from other forms of enterprise. The owner faces unlimited liability. The
business losses are to carry by the owner itself and recover losses by its own personal assets
(Companies Act 2006, 2019). By legal perspective the business and its owner are considered one
and the same. The owner alone is responsible for the debts of the business.
Partnership- It is managed and run through two or more person who are obliged under
one agreement (Galloway, 2016). All the distribution of profits and loss is decided by them on
prior bases which is mainly based on their capital invested these partner are having unlimited
liability.
Partnership Act 1890 – This is the act in United Kingdom legislation which defines the
rights and duties of partners. It receives royal assent on 14 August 1890 and commenced on 1
January 1891 (Hopton, 2016). According to this Act the partners are jointly liable for debt and
loan burden of the Business.
Corporation - Corporation refers to the business firm that is separate from the members of
the Company. The owners of Corporations is being determined by the number of shares they
held or obtains in the Company. The owners enjoy limited liability but they have involvement in
corporation operations.
P5
Sole Proprietorship – The Sole Proprietorship is entity that owner's managed by
themselves. Sole Proprietor has total control over its enterprise. The firm losses and debts are to
carried by the owner itself and they recover losses by selling their own personal assets. Fund is
being raised by the proprietor itself. The owner put its own capital into the business. The
proprietor arranged funds from its relatives and friends.
5

Partnership – Partnership is managed by two or more partners. They shared equal liability
and arrange funds by contributing capital. They also arranged funds by taking loans. In
Partnership losses are equally distributed among all the partners.
Corporation – The Corporation is managed and run by its directors and officers. The
Company director’s are authorized for overall business function of corporation and they are
appointed by the shareholders. The corporation raised their funds by initial contribution of
capital in exchange. They raised funds initially by allocation of shares.
P6
For starting the business in UK – The Firm can be incorporated in United Kingdom within
the time duration of 48 hours. It takes 13 days in completion of administration work. There is
subject of public disclosure in the United Kingdom (Singh, 2016).
Resourcing – The Brexit in UK has been marked reduction in retail and hospitality
businesses. The highly skilled work force is required to set up a business.
Construction and Registering the property – The documentation of construction takes
place within the 100 days and it requires only 9 process. For acquiring planning approval from
the applicable government, the Company need to get water and sewage connection this takes the
lengthy time and this is the expensive element for a newly established Company. For registering
a property the World Bank and International Finance Corporation are taking six procedures
which requires around 22 days.
Getting Electricity – The Electricity Network in UK requires the 100 days for completing
its proceeding as it handles the electricity connection (Olsen, 2015). This involves the
submission of plan and obtaining the inspections.
Getting Credit – In UK the credit can easily available. The financial sector and varied
nature of getting credit or loans gives to newly set up Company. The originated firms have good
access to much needed funds.
Paying taxes – This Paying taxes takes time duration of 110 hours per year for completion
of the essential tax facultative through which they can affect anything from the firm and labour
charges to the environmental and gross sales taxes. Employment wages and remuneration needs
to pay off.
Recommendation
6

 The Company should appoint registrar. Large number of procedures and filing can make
arduous to business.
 The newly setup business can start working by tied up with TMF grouping they can assist
the staffing requirements that provides ease in the business while entering in the new
markets.
 The newly set business can choose an electricity supplier with the best rates.
 The business should know the type of credit the business needed they should avail credit
in accordance with that.
 The Company should assure due diligence while expanding the business into the country.
 The Company can take local tax support.
7

CONCLUSION
It is being concluded from the above project report of the Business law that the
Parliament of the United kingdom is the supreme legislative body and therefore it has ultimate
power over all the other political bodies in the United Kingdom. It is being concluded that under
the Employment rights Act 1996 the employees are protected under the unfair dismissal,
reasonable notice before dismissal, time off rights for parenting. It is being concluded that
Employment law includes the flexible working time. The Companies Act has a certain provisions
related to the Company's formation, constitutional documents, corporate capacity and share
capital. It is also being concluded that the Data protection Act 2018 has made provision about the
possession of personal data. There are three types of businesses first one is Sole proprietorship
which refers to the business that are owned by the one person. The second one is Partnership
which refers to the business that is owned by two or more persons. The last one is Corporation
that refers to the business organization which has separate legal personality than its owner.
8

REFERENCES
Books and Journals
Ball, R., 2018. Competition law and LIBOR in three jurisdictions: US, UK and EU.
Conley, H., Mattei, A., and Joanna, N.M., 2019. National frameworks and the gender pay gap in
Italy, Poland and the UK: Comparing oranges with apples?.
Do, H., Cowling, M. and Blackburn, R., 2015. Barriers to exporting: new insights into UK
SMEs.
Galloway, J., 2016. Securing the Legitimacy of Individual Sanctions in UK Competition
Law. World Competition: Law and Economics Review, Forthcoming.
Hill, M., 2017. Private equity fund investment due diligence: by Kelly DePonte, London, UK:
Private Equity International (PEI), 2016, 261 pp, $699.00, ISBN 978-1-911316-05-3.
Hopton, D., 2016. Money laundering: a concise guide for all business. Gower.
Howe, J., 2016. Rethinking Job Security: A Comparative Analysis of Unfair Dismissal Law in the
UK, Australia and the USA. Routledge.
Merry, S.E., Davis, K.E. and Kingsbury, B. eds., 2015. The quiet power of indicators: measuring
governance, corruption, and rule of law. Cambridge University Press.
Muchlinski, P., 2018. Juan José Álvarez Rubio and Katerina Yiannibas (editors), Human Rights
in Business: Removal of Barriers to Access to Justice in the European Union
(Abingdon, UK: Routledge, 2017) ISBN 978-1-138-28418-0, i–xii, pp. 146 and
index. Business and Human Rights Journal.3(2).pp.299-301.
Ng, K.C.C., 2015. Unsolved Conflict Issues Under Company Law Framework: A Comparative
Analysis Between China and UK Law. European Business Law Review.26(3), pp.473-
507.
Olsen, T.D., 2015. Law, Business and Human Rights: Bridging the Gap, edited by Robert C.
Bird, Daniel R. Cahoy and Jamie Darin Prenkert. Cheltenham, UK: Edward Elgar Press,
2014. 269 pp. ISBN: 978-1782546610. Business Ethics Quarterly.25(4). pp.590-593.
Payne, J., 2018. Debt Restructuring in the UK. European Company and Financial Law
Review,.15(3). pp.449-471.
Singh, D., 2016. Banking regulation of UK and US financial markets. Routledge.
Snyder, L., 2015. Does the UK know something we don't about alternative business structures?.
Wettstein, F., 2015. Normativity, ethics, and the UN guiding principles on business and human
rights: A critical assessment. Journal of Human Rights, 14(2). pp.162-182.
Online
Companies Act 2006, 2019. [Online] Available through :-
<https://www.icaew.com/library/subject-gateways/law/company-law/companies-act-2006>.
Types and forms of the business, 2018. [Online] Available through :-
<https://www.accountingverse.com/accounting-basics/types-of-businesses.html>.
The introduction of the National Minimum Wage (1998) , 2018. [Online] Available through :-
<https://www.instituteforgovernment.org.uk/sites/default/files/the_mimimum_wage.pdf>
9