Business Law Report: UK Legal System, Business Organization Analysis

This report provides a comprehensive overview of business law within the UK context. It begins with an introduction to business law, encompassing various legal frameworks such as partnership, company law, and contract law. The report then delves into the sources of law in the UK, including legislation, common law, European Union law, and the Human Rights Act. It analyzes the role of the government in making laws, outlining the process from the first reading to the Royal Assent. The report further examines the impact of employment and contract law on business organizations, using the case of Pimlico Plumbers v Smith as a key example. It also explores different types of business organizations and how they are incorporated, funded, and managed. Finally, the report addresses the importance of alternative dispute resolution (ADR). The report offers insights into the legal landscape and its implications for businesses, especially in the context of employment and contractual agreements, providing a valuable resource for students studying business law.

Business Law

Table of Contents
Introduction......................................................................................................................................1
Task 1...............................................................................................................................................1
P1 Various sources of law in UK...........................................................................................1
P2 Governments Role in making law.....................................................................................3
Task 2...............................................................................................................................................4
P3 Effect of Employment and contract law on a business organisation.................................4
Task 3...............................................................................................................................................5
P4 Various types of business organisation and how they are incorporated..........................5
P5 How the business organisations are funded and managed................................................7
Task 4...............................................................................................................................................8
P6 Alternate dispute resolution..............................................................................................8
Conclusion.......................................................................................................................................8
REFERENCES..............................................................................................................................10
.......................................................................................................................................................10

Introduction
Business law is a broad area that helps in governing the business and the commercial
entries that takes place between the society and the people around them. It is also known as
commercial law or a mercantile law which helps in governing business in the country. Their are
different business law that helps in governing the business entities and these involves law of
partnership, company laws, law related to agency or law related to trust etc. it also helps in
regulation of commercial transactions that comes under a law of contract. This report is based on
legal system that exist in Britain and what is role of government while making and application of
law in society. This report also analysis different types of business organisation and also how the
employment law and the contract law has a significant impact on the operations of Pegasus Ltd.
Lastly the report would show the importance of alternate dispute resolution on the society as a
whole.
Task 1
P1 Various sources of law in UK
For a country presence of legal system is important and it helps in governing the society
irrespective of its type or size. A legal system in country is categorised into different two heads
which helps to make a better understanding of law (Adams, 2017). This has been divided into
public and private.
Public law is defined as a law that helps to build a relationship between individuals and states as
a whole where as private law deals with the relationship between individuals, family members
etc.
Laws has been sourced from different sources in UK. It has been seen that there are four
different sources of law to make English legal system more impactful, which includes the
following- legislations, common law, human rights acts or laws and the European laws.
 UK legislations: This includes the laws that are made by process of legislature in the
country. As in UK the parliament structure is the principle legislature and is based in
London (Sealy and Worthington, 2013). It is primarily responsible to make and enact the
laws that would be applicable to all the countries in the world.
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 Common Laws: In UK legal system is basically based on the common law. It implies
that decision of superior court can be considered as the part of law which is followed by
different courts while taking any decision.
 European union law: As UK is a member state of European union so all the laws that
has been passed by European union has to be implied over the local laws within the
country.
 Human rights act: This law has been come in force to protect human rights of the
citizens of country. These rights have been specified in the European convention on
human rights and has been made an act which is known as Human rights Act,1998.
Also there are various divisions of law in UK, these divisions are divided into three
distinct legal system (Blake, Browne and Sime, 2016). These are divided into one each for
England and Wales and for Scotland and Northern Ireland. In UK the legal system is
administered by different courts. There are different hierarchy of courts which includes the
following:
 Supreme court: This court is formerly known as House of Lords, it is the supreme
appellate body in UK. The court deals with the appeal that are related to both the criminal
and civil law in England and Wales. Whereas the appeal to criminal proceedings are
made to high courts from lower courts in Scotland.
 Court of Appeal: This is senior court of appeal and also helps to decide about the
matters that are related to civil and criminal cases. This is only divided into these two
divisions.
 High court: It is also known as another senior court which accepts the appeals and also
hears the serious and complex matters that arise in the civil issues and family cases. This
court includes the three divisions which comprises of Queens Bench, Family and
Chancery Divisions.
 Country court: These are the courts which are meant for hearing of the civil matters,
which includes the claims that arise due to monetary claims, geographical catchment
areas etc.
 Crown court: This court deals with the cases that are of serious criminal offence as well
as the cases that has been transferred by Magistrates courts.
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 Magistrates courts: These are the courts that hears criminal matters at the initial stage
and also deals with summary trails, this court also deals with the civil matters. The jury of
judge is made up of the local community.
There are certain problems that are related to the UK legal system which includes that
this system is Reactive and not proactive, also it is a secondary function of parliament which
forms that common law is not a main function of the court. Also there is problem that it has
undemocratic law and is having the impact that makes it easily overridden.
P2 Governments Role in making law
It is the duty of the government to make laws and legislation for betterment of society.
Parliament of UK contains two structure which is house of commons and the house of Lords.
The laws that are formulated by these two are applicable to the whole country including three
other countries that are governed by UK laws (Goulding, 2013). Parliament in UK has the power
to pass two types of bills which includes private bills as well as the public bills. Private bills are
considered as the bill which consist of the non governmental bills and the public bills includes
the bills which affects public. These bills are considered as a law when passed by government.
The bill for making law is to introduced in one of the house that includes the following steps:
 First Reading: it is considered as the first step in which bill is introduced. The title of the
bill and what it is about is read in this step among the member of the parliament. Then the
bill moves to second reading.
 Second Reading: this is the stage where the bill is debated on the basis of the principles
of construction of the bill. Also the pros and cos of the bill is analysed and the benefits
that this bill made to country is defined here.
 Committee stage: In this stage examination of bill is done in details and further
amendments are made according to the bills if it is required.
 Report stage: This is the stage where the amendments are made in the bills are to re
debated and also the votes in favours are to be taken in this stage for the amendments that
are made. After this bill goes to the third stage.
 Proceeding in House of lords: This is the stage that comes after third reading is done. In
this stage similar proceedings are done as it is done in house of commons (Knapp and et.
al., 2016). If any amendments are done by the house of lords, then the bill is again sent
back to house of commons.
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 Royal Assent: this is the stage where the consent for the bill to make law has to be taken.
If the consent of Monarch is gained bill is said to become law and it becomes applicable
to all the four countries.
Government has to perform these steps for making law and to make it implement in
country. It is fundamental duty of government to analyse situation that requires making of law
(Scarborough, 2016). As it is seen that whenever any law is passed by government this impacts
the business of the company and it also comes with certain compliances issues.
As in the case of Pegasus, they should be up to date about the legal changes that can
affect the business of the company by visiting the official sites of government and they can also
learn it from journal and magazines that are published by government from time to time. Various
courts of law uses these legislations while deciding upon the cases and the matters that has been
filed with them. These journal, magazines and the official sites of government can help the
company to find out that which are the laws that are affecting them and should be followed for
better implementation of the work.
Task 2
P3 Effect of Employment and contract law on a business organisation.
Now a days it has become a trend in the global market of gig economy (Mackie and
Mackie, 2013). This economy is defined as a free market which includes the temporary positions
and different contracts which occurs between a business concerns and their independent workers
in a short span of time. The contracts are often short term and the disputes that arises in the
contract is due to the unambiguous terms and conditions. It is seen that there are different case
laws under which the status as well as the rights of these workers are decided through the help
of appellate courts and various judgements. It is seen that the Pimlico Plumbers Co. v
Smith[2018] UKSC 29 is the leading case study that helps in deciding the employment status of
independent worker.
This was the case where Pimlico plumbers a company has appealed against his
independent worker. The court rejected the appeal of company and decided the employment
status of Mr. Smith. The court decided that Mr Smith is worker and not self employed person.
The case was first heard in employment tribunal (Raz, 2013). It was seen that the company has
dismissed Mr Smith on the unfair grounds, also deduction of salary has been done unfairly and
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was also not given any holiday pay. On the other hand Pimlico argued that Mr Smith was not
employee of the company and was providing service as a self-employed contractor. Also
employment tribunal decided that Mr Smith was not an employee but was working in his own
capacity.
Supreme court also up held the decision of employment tribunal by stating that Mr Smith
is not self employed contractor but is a worker who is working in the company . He is also
entitled to benefits of holidays and equal pay which are governed under employment law. It was
seen that smith filed a tax return as a self employed person and was allowed to take the work
from outside.
The case of Pegasus includes the decision that has to be made on the status of 35 drivers
who have been hired by the company, it has to be checked that whether they are self employed or
they are worker of company (McAdams and et. al., 2015). According to facts of the company it
has been analysed that drivers of the company were wearing a branded uniform of company, they
also used a branded vans and they have also wear companies identity card. It was also analysed
that agreements of the contract also had a term of gross misconduct and wages which were
similar to the facts that was discovered in Pimlico plumbers. Hence it can be seen that the
judgement can be made on the basis of the previous judgement that was made in Pimlico
plumbers case. It is seen from that the employment laws and contract laws are crucial elements
while deciding any case. As one of the law regulates dealing of the employer with employee and
other covers the elements of contract with laws.
It has been seen from this case that company should follow the legal terms and condition
while deciding about the terms of contract of employment. They should make the terms flexible
and should check that these are not affecting both the employer and the employee. Also contract
law provides that the terms of contract should be decided among employer and employee in
consensus.
Task 3
P4 Various types of business organisation and how they are incorporated.
It has been seen in the case of Alex and Jay that their accountant has advised them to set
up a registered company. In the global world it has been seen that various types of business
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organisation are there which can be considered before setting up the business. These types of
organisation contains the following:
 Sole proprietorship: It is a business organisation which consist of a single owner. It is
run and managed by the individual (Mann and Roberts, 2011). This type of organisation
are helpful to the business houses which are of small in size and has to control the
business as an single owner. This is very easy to form and the cost of formation is very
less as compared to other type of business organisation. The owner of sole proprietor has
unlimited liability, this means that creditors can also recover their money from the assets
of owner.
 Partnership: This is the form of organisation which is done by coming into partnership
between two or more than two persons. This can be started by entering into an agreement
which specifies the terms and condition of partners. These terms and conditions are
defined in a paper which is known as partnership deed. Partnership can be in oral or in
written form. It is not mandatory for the partners to register a partnership firm. The
liabilities of partners in partnership is also unlimited.
 Corporation: A corporation is considered as a type of business organisation which is
distinct from its members and has a separate legal entity. The corporation is governed by
companies act 2006 in UK and if the company wants to get themselves incorporated then
they have to follow the rules that are set by companies act (Painter and Holmes, 2015).
Also directors of the companies has to make MOA and AOA which suggest the name and
address of the company and also the objectives of the company are defined in MOA. As
it was decided in the court in case of Salomon v Salomon [1896] UKHL1 the company
is separate from its members and has a separate legal entity from its directors. In the
company the member has a limited liability up to the amount unpaid on the shares of the
company. Company can be divided into various forms which includes a Private limited
company, a public limited company, limited liability company and many more. For
making the registration of companies promoter of the company has to apply to the
companies registration house after which they will gain certificate of incorporation and
they can start business.
It is advised to Alex and Jay that they should start a limited liability company which
would help them to expand their business and would also help them to raise funding for
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expanding their reach of in the global market. Nature of registered company is that they are able
to expand their operations to the vast society and gets a separate legal entity which is different
from its members. The company gets the certificate of separate legal entity through which they
are able to sue and being get sued.
They have to file MOA and AOA and other legal documents that are required for
registration of company to the companies registration house. Also the directors have to form a
consensus that would enable them to submit the documents to the registrar of company. After
which if the registrar finds that the documents submitted are correct and best then they may
provide the directors a certificate to commence business. After which they would be entitled to
start business.
A company is owned and managed by a group of directors. They are in charge for
managing and formulating the business strategies so as to achieve the objectives that are desired
by the company. Directors of the company should act within the powers and should adopt the
policies which are best suitable for benefits of shareholders. Duties of directors includes to bring
the success of the company. Directors should avoid any conflict that arise in the company and
disclose any interest that might arise in the transactions within the company.
P5 How the business organisations are funded and managed
For running of a business and to operate and the daily operations of the business funds
are required. It is also important for the company so that they can expand their working and can
also work globally. There are different sources that helps the company to raise funds. The range
of funds depends on the size of a business, this can be achieved through government grants
which includes:
 financial support can be taken by government which includes regional growth funds
(Park, 2012). This funds includes the fund that is given to the business ranging less than
one million pounds which are run by national or local organisation.
 Also there is scheme of start-up loans that are given by government which helps new
enterprises to expand their business. This also helps the firms to achieve the objective of
maximising their production.
 There is also a scheme of government grants that provides small companies a support of
running the business daily activities.
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 There is UK export finance which helps the company to get funds in the form of bank
loans.
 Companies can achieve the funds from investment bankers who can provide a high
amount of funds to the company.
Task 4
P6 Alternate dispute resolution
In a country the way of resolving a dispute that arise between the parties is through
litigation which is one of the expensive and is also time consuming process. In UK there is an
Alternate dispute resolution which helps people of the country to resolve disputes without going
to the court (Prassl, 2017). This is the approach that helps traders and consumers to resolve the
dispute outside the court mutually and also helps them to save the extra cost that is wasted in the
court. There are different types of ADR which includes the following- arbitration, conciliation
and meditation. In UK commonly arbitration and mediation are recognised so as to resolve the
disputes. Arbitration is a process that helps to resolve the dispute between the people through a
decision that is made by the third party. Whereas mediation includes the involvement of
independent third party who helps in resolving the dispute.
There are certain alternatives that helps the company to gain the legal advise these
alternative includes the sites that are framed by government, also the organisations are there
which functions to provide legal advise to the company. There are also some law society that
helps in providing the advise to the company.
In UK the legislation that governs ADR scheme was laid down by the parliament in year
2015. which includes,
 Alternate dispute resolution for consumer disputes 2015.
These laws and regulations that are provided by courts sets a standard that are to be
followed while carrying the process of ADR. Hence Pegasus can also go for ADR scheme
voluntarily as a mechanism of dispute resolution.
Conclusion
Form the above report it can be concluded that business law is the main part of the legal
system in any country. This law governs and regulated the commercial as well as the business
transactions that takes place between the traders and the customers. Pegasus should comply with
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all the laws that are specifying the boundary for their operations. Also government of UK has
made an ADR scheme which helps in settling the disputes that arise between the parties without
going to court.
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REFERENCES
Books and Journals
Adams, Alix, 2017. Law for Business Students. Pearson.
Blake, S. H., Browne, J. and Sime, S., 2016. A practical approach to alternative dispute
resolution. Oxford University Press.
Goulding, S., 2013. Principles of company law. Routledge-Cavendish.
Knapp, C. L., Crystal, N. M. and Prince, H. G., 2016. Problems in Contract Law: cases and
materials. Wolters Kluwer Law & Business.
Mackie, K. J. and Mackie, K., 2013. A handbook of dispute resolution: ADR in action.
Routledge.
Mann, R. A. and Roberts, B.S., 2011. Smith and Roberson’s business law. Cengage Learning.
McAdams, T., Neslund, N., Zucker, K. D. and Neslund, K., 2015. Law, business, and society.
McGraw-Hill Education.
Painter, R. and Holmes, A., 2015. Cases and materials on employment law. Oxford University
Press, USA.
Park, W.W., 2012. Arbitration of international business disputes: studies in law and practice.
OUP Oxford.
Prassl, J., 2017. Pimlico Plumbers, Uber Drivers, Cycle Couriers, and Court Translators: Who is
a Worker?.
Raz, J., 2013. Legal positivism and the sources of law. Arguing About Law. 117.
Scarborough, N. M., 2016. Essentials of entrepreneurship and small business management.
Pearson.
Sealy, L. and Worthington, S., 2013. Sealy & Worthington's Cases and Materials in Company
Law. Oxford University Press.
Online
Legal systems in UK: Overview. 2018. [Online] Available through
<https://uk.practicallaw.thomsonreuters.com/5-636-2498?
transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bhcp=
1>
Pimlico Plumbers Co. v Smith [2018] UKSC 29. 2018. [Online] Available through
<https://www.magdalenchambers.co.uk/pimlico-plumbers-ltd-mullins-v-smith-2018-
uksc-29-2/>.
Alternate Dispute Resolution for Consumers. 2015. [Online] Available through
<https://www.gov.uk/government/publications/alternative-dispute-resolution-for-
consumers/alternative-dispute-resolution-for-consumers>.
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