Business Law: Analysis of UK Legal Structure, Impact and Solutions

This report provides a comprehensive analysis of the UK's legal structure for businesses. It begins by outlining different sources of law, including common law, legislation, and EU laws, and examines the role of the government in law-making. The report then explores the potential impact of various la...Read More

BUSINESS LAW

Table of Contents
INTRODUCTION...........................................................................................................................3
Scenario 1(LO1 & LO2)..................................................................................................................3
Different sources of law..............................................................................................................3
Potential impact of law on business............................................................................................3
Illustrating the potential impact of the law on clients business..................................................4
Scenario 2( LO3 & LO4).................................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
For conducting the actions of people and business organisation of nation in a legal way
as well to give a framework to operate under common terms and rules, the laws are framed for
every nation. This includes the various laws which direct the actions of citizens as well as
businesses under the legal ambit under which each person is require to follow the rules and laws
made. One such branch of the law is business law where statues legislation, regulations and
standard are being framed to give legal direction to the business organisation. Under this falls
different laws which includes employment, corporation, company, contract, health and safety
and others. All this governs the conduct of business organisation operating under the legal
framework of a nation.
In the present report a detailed discussion of UK’s legal structure for business is done.
This starts with presenting the sources of laws and the role played by government in making of
laws. Along with this comes the application and impact of various laws on organisations and
application of common and statutory law in justice court. Various types of business organisation
are presented on basis of their legal formation with presenting their differences on basis of
management and funding. With stating out examples legal solutions have been presented for
different business issues and for the same legal solutions are being compared and contrasted.
Scenario 1(LO1 & LO2)
Different sources of law
Various sources of law
Sources of law is the origins of the law where it builds the rules which enables the state which
govern its own territory. This term refers to the sovereign of the seat of the power from that the
law derives all the validity (Bell, 2018).
Common law:- This term refers to the law which has been derived by all the judicial decisions
of the similar tribunals and courts. Common law is occurred when the all the precedent has been
arises. The main usage of the common law is to define the legal dictionaries and also
characterized all the most common uses among all professionals of legal. The system of the
common law is placing great weight ion the decisions of the court where it has been considered
the law with same forces of the statutes (Besson and d'Aspremont, 2017).
Legislation

Legislation term refers to the legislature of other governing body for the process of making it.
Legislation usually a purpose where the members of the legislature and executive that has been
debated by all the members of the legislature. There are so many purposes of legislation such as
to regulate, to provide, to authorize, to grant, to sanction and also to restrict and declare.
Statutory law
it is generally a written law that has been passed by the body of legislature and also opposed to
the regulatory law, oral customary and also it has been promulgated by the common and
executive law of the judiciary. It generally originated with the state, nation and local
municipalities.
Eu laws
European union law is basically a system where laws have been operated within so many
members of state of all the European union. It is a social. Political and economic institution rule
and policies. It also represents the new legal orders on the international law (Versteeg and
Ginsburg, 2017).
Potential impact of law on business
Role of government in law making:
As laws are not easy which is to be implemented at any time, as various rules and
regulation are to be imposed to make a valid law. First by examine the changes in environment
and if there is need to bring changes in existing laws the bill is to be prepared to bring changes in
exiting laws and it is passed to cabinet ministers (Jones and Sufrin, 2016). After getting approval
from cabinet minters regarding that changes or new amends in laws the bill further proceeds to
houses of parliament, the bill is selected by voting and if there is majority in voting this bill is to
be further passed to parliament for final approval. The final bill is to be approved and signed by
queen and after this the bill is to be sanctioned by all the courts and person are bound to follow it
without any negligence.
In case of statutory law such laws which are liable in statues laws which is to be followed
and implemented over whole nation (Kraakman, 2017). It mainly included written laws which is
to be followed by court and they cannot give any judgement by taking helps from previous cases.
While in case of common law, the judges can take help from previous cases and also verify such
case which helps person to get judgement on right decision.

Application of common and Statutory law in Justice court
In case of Statutory laws such laws are connected to statutes and at the time of providing
justice they are required to refer the judgements and rules from dictionaries and long titles. In
case of common law in regarding providing justice in courts judges refer the mattes depending
upon the nature of the case. In such case they are to be already written and applied in such cases
to provide justice to them. They cannot give judgement by viewing the previous suit, they
provide judgement by viewing the day to day judgement and also customs according to the needs
to solve the case. It refer to the case of Industry V Bottrill, 1999 The judgement is given
according to the needs of the case, and they are related to sole trader company.
The common laws are applied in the justice court by getting a compulsory binding effect
through doctrine of judicial precedent. The judges are required to refer a case ruling given in past
cases for the current lawsuit and giving a decision over the same with similar facts and events of
happening. In this direction the judges are required to refer the ruling with their discretionary
power where they are allowed to see the accuracy and relevance of the earlier ruling to the
present case. If there is no relevance the ruling is not required to be abided with and for the
case where the judges feels that decision lack correct interpretation of law or there have been
error or omission in facts and evidence of the case judge can overrule the previous decision can
pass a new one. This means the application of common law is not mandatory rather it is followed
by the discretionary power of the judges. As it was in the case Pimlico plumber where the
decision in the case was given after taking the ruling of case Uber v Aslam in account.
Illustrating the potential impact of the law on clients business
The impact that resulting to business affects their potential liability are relating to
11 Employment law: There had to be some close relationship between the employer and
employee and employee had to work according to the rules and regulation imposed by
employer (Davies, 2016). It is the duty of the employee to behave ethically at the time of
committing work during the business hours and also not liable to take any decision
without asking to employer. Also, employer carries certain duty to show the right path to
employee and also helps them to accomplish the task which is assigned to them to be
completed within stipulated time.

 Contract law: This is usually made between parties to work according to the set norms
and instruction which is to be mentioned in agreement. As both the parties are bound to
follow such norms and do not have right to breach such contract (Beatty, Samuelson,
and Abril, 2018). In that cases any of the parties are liable to compensate the loss
incurred to another party for any such damage which is to be incurred intentionally.
 Company law: Usually such laws are imposed by government regarding the terms and
condition which is to be followed by company to fulfil all such need to maintain their
status and reputation in market (Coulter and Hancké, 2016). The rules are mainly
imposed regarding the internal and external stakeholders of the company as the decision
which is to be taken internally are bound on all the members and employees of the
company and also they had to discuss all such matter to employees if they are crucial to
affect the status of the company in near future. The same as with the external factors as
they had to disclosed all such information which is carried by company as the investors
and government had liability to take strict action against company.
The one case which is related to all such potential impact of business is related to Pimlico
Plumber V Smith Case. This case mainly round around Mr Smith, as Mr smith is the employee
for the pimlico company and working as a duty of plumber. In January 2011, he is suffered with
major heart attack which causes his half body to be paralysed in such case he demanded
company to reduce his work timing so that he can continue his services and maintain his
livelihood. Instead of reducing the work hours, company terminate smith from his job on ground
of not capable enough to handle his duties. Mr. Smith file case of terminating him, on such
ground which is not appropriate. The judgement is mentioned against him by rules of lords in
courts.
Effectiveness of English legal system in terms of recent reforms and development
In the recent times there have been lot of changes which are going in the under the English legal
system which have changes the ways of its working and providing justice to the people and
business organisation. For the first major change was made in 2009 where power of House of
lords was taken and a supreme court was established and as the Highest court authority of the
nation whose decision will be final and no one can and raise question over its decisions. In 2014
family courts were established to handle the cases of family disputes, divorce, child custody and

others under a single roof where both parties can come together to resolve the dispute and get a
legal remedy. Apart form this in the recent times more preference are given to the alternative
dispute resolutions methods which are out of court settlement techniques which are being
referred by business organisation to resolve their disputes faster and without going to court. All
of these changes have made the English legal system more effective and this directly have
raised the importance and legality of the legal framework.
Differentiation among legislation, standards and standards
The legislations are the one which are made through act of parliament and whose
abidance is legally compulsory. This includes Equality act, Health and safety act 1974 and many
others, All this lays down the legal ambit for business organisation to operate in and they can
not go beyond the status laws and this will result in breach on laws which are punishable
offences includes fines ad imprisonment as punishment for breach. On the other hand
regulations are the guild lines to apply the laws and to see the level of abidance with the laws.
The regulations are also developed by government which future explains the laws and states out
how to apply laws in day to day life and business operations (Miller, 2015). Usually many
parties imposed such rules if there are results in breach to any terms (Hedley, 2017). One such
example is employment regulation 1999 which depicts the application and abidance of
Employment act, 1986. The standards on the other handed are also established by government
authorities but its abidance is not compulsory. They are stated out to maintain the quality of
product, service or application of the law. This includes Health and safety standard, 2010 which
defines the quality of standard for risk management and health and safety measure which a
business can abide which apart form statutory requirement. These are above the statuary legal
requirement and upon the discretion of the business to follow or not.
Scenario 2 (LO3 & LO4)
Different forms of business organisation on basis of legal formation
Unincorporated business organisation:
Sole trader:
The sole trader is that type of business which not registered under any law but is a legal
formation of the business under the English legal system. In this a single person starts and runs
the business where it there is no involvement of any other person. The owners is responsible for
conducting the business activates and liable for all the responsibilities and meeting liabilities of

the businesses. Whole of the profits belongs to the business owners only and he/she is required
to pay taxes on their earning as their personal income as per the income tax ruling of the nation.
Apart from this as per the legal formation this is the easiest form to start the business as this do
any involve and legal requirements and abidance and a person can start sole trader business
easily. All the funds are brought in by owners through personal saving and taking loans form
family and friends (Vagts and et.al., 2015). There is no scope to rise outside funds for this type
of business and all the property and asset of business belongs to owner itself. Also, the liability
of sole trader is unlimited which means to meet the liabilities and dues of the business personal
property of owner can be sold out to pay of business dues.
Partnership:
This is the business which is started by two or more persons who came together to
conduct business actives of buying and selling of goods or services under a single business
name. All the persons are referred as partner t0 the business and all of them are responsible for
conducting business operation together. The roles and responsibility of the business are shared
among the partners. The legal requirement of the partnership business is that there is no need to
get a general partnership business register but a limited liability partnership business is required
registration under relevant partnership act. The profits of the business is shared among partners
in the ration of the capital investment in business or as per the ratio decided between all the
partners. Activities are conducted by active partners while sleeping partners contributes funds to
business and take share in profits only. The profits of business is not taxed rather it is taxed as
individual income of all the parents. The property and assets belong to business only and partners
do not have any right over them. Apart form this the liability of all the partners under partnership
business is also unlimited where all the partners are responsible for contributing to meet the
liabilities and funds of the business from their personal property and funds.
Incorporated business organisation
Limited company:
On the basis of legal formation this is the only business which is legally registered under
the companies Act, 2006. A limited company is a registered business which is operated by the
directors and managers of the business. Among all the business formations this is only the
regulated one and requires lots of legal formalities to start the business. The registration is done
with companies house and company gets an identity of a legal person in the eyes of law. The

funds are raised through different sources of funding which includes debt as well as equity
finding's. Also, the property and asset of business belong to it not owners or director have a legal
right upon them. The business is managed through the mangers and directors along with internal
auditors, a company secretory and other legal advisor to company. Under limited company
shared can not be issues to member of public rather they can be issues to limited number of
members who becomes shareholders of the business (James, 2017). A company being a separate
legal person have full rights over its property and asset which makes the liability of members
limited to the extend of their investment in organisation. This means the liabilities and dues of a
company are met by selling of its property and asset and owners, directors and members do not
requited to bring personal funds or sale their property to pay of the dues of the company.
Illustrating explanation on different business organisation on basis of their management and
funding
Sole trader:
As described above a sole trader business is non registered business but a legal formation
to start a business. Its management and funding is separate that from other business formations.
In this type of business the funding is done through personal saving of the owners or taking loans
and borrowing form friends and family (Frank and Bix, 2017). The owners is solely responsible
to bring in funds and no other is responsible to funds the sole trading organisation. Apart from
this there is no other source form which a business can raise funds and it isn’t allowed to raise
funds though member of public by issuing shares as this is not a registered business under norms
of companies act, 2006.
The management of this business is also very simple as the whole and sole responsibility
is empowered upon a single person he/she is solely responsible to conduct the business
operation, mange all the activities and pay of the dues of the business along with managing the
liabilities of sole trading business. There is no other person involved in management of sole
trader business as there is no legal requirement for starting and conducting business operations.
Also, the profits also taxed as personal income of owners so legal advise in this regard is also no
needed for the sole trader enterprise.
Partnership:
The partnership business is the one which is run and operated by the partners whose
number is more than two. All the partners when join a business are required to bring in certain

amount in business to contribute to the capital of the partnership firm. Apart form this the funds
are raised through personal savings of partners and also they can take loans and browning from
friends and family. In this the friends and family member of partners can also becomes partners
in business and can take a share in the profit of the firm, or just gives loans and take interest
payments and repayment of principle at stipulated time.
The management of partnership business is done through parents and a some legal help
as well. All the partners are responsible for bring in capital and also they share the responsibility
of operating the business activities and take business decision all together. Apart form this they
also take advices form legal advisor which can be company secretory regarding matters of the
firm related to admission /removal partners, profit sharing ratio and other. With this it can be
stated that partnership business are mangers and funded basically through its parents who are
also owners of the business.
Limited Company:
For a registered limited company it funds are raised through debt and equity funding’s.
The debt funding includes taking loans and advances from banks and other financial institutions
and return of funds as principle as well as regular basis interest. The equity funding includes
venture capital, angle investments and other (Orts, 2017). A private limited company can not
raise funds form member of public but a public limited company can through crowd funding. In
return of the investment in company shareholders are promised a small portion of ownership in
company and are referred as member to business.
The management of the business is done through is directors and mangers who operates
day to day business activities and takes decagons for business. The management of a company
also includes internal auditors who are required to see the accounting and auditing compliance
by business. A company secretory in a company is also required to look out the legal matters of
company related with business. All decision are not solely taken by directors some of them
includes opinion of shareholders and members as well which are taken in Annual/emergency
general meeting and opinion is taken through poll/ballets or voting.
Recommendation to solve different business solutions for different business dispute
Case 1: A company is facing issues with its IT suppliers and regarding payments and supplies.
Both the parties are nor eager to go for litigation process. Advise how their dispute can be
resolved?

Legal advise:
One of the solutions that is presented under the English legal system to resolve the
dispute without going to court is Alternative dispute resolution methods. There are different
methods under ADR which includes arbitration, mediation, and negotiation. For the present
dispute the best solution to resolve the dispute is arbitration (Davidson, Forsythe, and Knowles,
2015). For this the contractual agreement between parties is required to be amended and insert
an arbitration clause to refer dispute to arbitration rather than going to court. With this case is
refereed to arbitrator to give an awards over the dispute after hearing the facts and taking
evidences form both the parties.
Case 2: A company have defaulted many time in making payment to its creditors and suppliers.
They are threatening to file a winding up petition as company is becoming insolvent. What legal
action can company take to stop the legal proceeding of compulsory winding up?
Legal solution:
As per the provision of Insolvency act, company can go under administration where the
business operations are taken by administrator and it tries to bring business to profitable
position. When a company is under administration all legal proceeding against it are restricted
and no winding up petition can also be filed. Here company is advised to go under
administration.
Comparing and contrasting the legal solution
Both the above solutions are given under legal framework of English legal system, the
first solution is provides under ADR where no involvement of courts is there rather in case 2
legal advise is given by stating out the legal procedure of court for going under administration.
CONCLUSION
With completing the report over business law it can be concludes that it is a legal
framework which gives direction to business organisations in legal ways. The sources of laws
have been identified as common law, legislation, act of parliament and EU laws. The acts and
laws are enacted by the government through act of parliament by following the parliamentary
process. The common laws are applied under court system with compulsory effect but under
discretionary power or judges whereas statutory laws area applied mandatorily with no changes.
The difference among legislation, standards and regulation have been presented. Apart from this
with stating out recent reforms and development under English legal system its effectiveness is

being presented. Different forms of business organisation includes sole trader, partnership and
limited company of which former two are unincorporated while latter one is incorporated
business type. All three of them different forms of management and funding. As the company is
managed through its directors, mangers and other legal personnel while partnership is managed
by its partners. The sole trader business is being managed and funded by a single person only
who is owner of the business as well. Furthermore, two of the situations which business face
while operating its business is presented and for both of them different solutions have been
presented which it can use to resolve the issue. Both of them have been compared and contrasted
to present their effectiveness and stating out that how legal remedies are sorted by business for
the issues which they face during its operations.

REFERENCES
Books and journals
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Miller, R. L., 2015. Business Law Today, Standard: Text & Summarized Cases. Nelson
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Vagts, D. F and et.al., 2015. Transnational business problems. West Academic.
James, N., 2017. Business Law. Wiley Blackwell (American Society Bone & Mineral Research).
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Davidson, D. V., Forsythe, L. M. and Knowles, B. E., 2015. Business law: Principles and cases in
the legal environment. Wolters Kluwer Law & Business.
Frank, J. and Bix, B. H., 2017. Law and the modern mind. Routledge.