Business Law Report: UK Legal System, Company Law, and Employment

This report provides a detailed analysis of UK business law, encompassing the legal system's structure, including parliamentary sovereignty and sources of law, such as Acts of Parliament, delegated legislation, case law, and EU law. It outlines the roles of the government in lawmaking and the application of statutory and common law within the court system. Furthermore, the report examines the impact of company law, employment laws, and contract law on businesses, using specific examples to illustrate these effects. It also differentiates between legislation, regulations, and standards. The report further explores different types of business organizations, differentiating between incorporated and unincorporated forms and presenting the advantages and disadvantages of partnerships and companies. Finally, the report presents legal advice for two business cases, utilizing relevant statute and case laws to resolve the presented issues effectively.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................3
SECTION 1-....................................................................................................................................3
TASK 1............................................................................................................................................3
a) Stating importance of the phrase Parliament is sovereignty and source of laws....................3
b) Role of government in making law and application of statutory and common law in court
system..........................................................................................................................................4
C) Defining impact that company law, employment laws and contract law have on the
business of a company using specific examples. .......................................................................5
TASK 2............................................................................................................................................7
Presenting different types of business organisation....................................................................7
Difference between incorporated and unincorporated business organization on basis of their
management and funding............................................................................................................8
Advantages and disadvantages of partnership and company......................................................9
SECTION 2......................................................................................................................................9
CASE 1............................................................................................................................................9
Presenting lelga advise to Champion Ltd for resolving the issue with its creditors...................9
CASE 2..........................................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Business law is that bank under the legal system of UK which defines and lays downs
the laws and legal statutes to run and operate the business form their incorporation till their legal
ending. Under the ambit of business laws falls various laws including employment, equality,
health and safety, competition, consumer, contract, company law and others. In the present report
the detailed information related with the legal system of UK is discussed. This includes
presentation of parliament sovereignty in UK and the course through which laws are made in the
nation. Apart from this the process of making law is outlined along with defining application of
common and statutory law in courts of UK. Also, usage of contract, employment, and company
law over the business organization is defined along with presenting variation between legislation,
standards and regulations over the business and firms. Furthermore, different types of
organization formations are explained with their difference and advantages and disadvantages.
Moreover, in section 2 of the report, for two different business issues legal solutions is presented
with the use of statute laws and case laws wherever application to resolve the problem
effectively.
SECTION 1-
TASK 1
a) Stating importance of the phrase Parliament is sovereignty and source of laws
Parliamentary Sovereignty:
The parliament of the UK is the prime authority who can make a law for nation. The
parliament also have the power or change, amended or bring an end to the law. The laws are
made through parliamentary procedure of getting approval from house of common, house of
lords and Her Highness (Craig, 2018). The parliament in UK is supremacy where all the decision
of making and ending all is vested solely to it. No other government or a political party have a
right to raise a question over a law made by parliament. Also, the parliament can not pass a rule
to restrict changes in existing law which means that even parliament an also not overrule its
authority of making , amending and ending a law. Thus it can be stated that parliament is the
supreme power in the UK.

The principle of parliamentary sovereignty states that parliament has unlimited and
unrestricted power of making law. The monarch is not given an unilateral authority of making
law and courts cannot override the laws. The parliament is the main body which can make,
eliminate or change he laws. This makes the parliament a supreme body which have a power to
make, change are made a law. Further, no parliament power is vested where a future power is
restricted to make or change the law. Also, no current parliaments have a boundation by the law
or precedents of earlier parliaments.
Sources of Law:
Act of parliament: is the major source of law where the statues are made is parliament
by following the procedure of getting approval form both houses of parliament and then from the
Queen. The laws are made applicable with a compulsion in whole nation with same level of
understanding.
Delegated legislation: is the one where power is vested to local authorities and public
bodied by the parliament to make law an over a particular matter regarding specific region or
area. The law is applicable to the area or community for which it is made.
Case law: are the one where the ruling of previous cases are referred by judges in current
lawsuit (Geeand and Young, 2016). The decision of earlier case is binding and gets this status
through doctrine of judicial precedent.
Eu law: is also a source of law of English legal system. Till present date UK is part of
EU so the directives and laws made for all the member nations EU are applicable to UK as well.
In case of contradiction between EU ad UK law, always the EU law prevails.
b) Role of government in making law and application of statutory and common law in court
system
A draft legislation is submitted to cabinet minister by public authority over which a law is
intended to be made. The minister check the relevance of the proposal and approves it before
passing it to the parliament for consideration as a bill for approval or rejection by both the houses
of parliament.
A bill is submitted to either one out of two the houses (house of lords and hose of
common) of parliament and generally it is the house of commons. The bill is introduced where
title of bill is read out in first reading and matters in the bill are disclosed. The bill is referred to
second reading and here principles of bill are discussed and voting is done over continuation of

bill. At this stage debate is carried out and amendment are suggested in bill. Then it referred to
committee stage where house committee considered every clause of bill and scrutinized them in
detail with making further amendments in bill. It is referred back at report stage to house where
amendments are considered and discussed and debated by member of the house. The last stage
comes as third reading where minor discussion is done with no amendments and voting over
continuing the bill to other house (Douglas, 2018). After this bill is sent to the another house of
parliament (house of Lords) where it goes to through same process and undergoes each step. If
amendment are made by another house it is referred back to first house for consideration and this
process continues till both house reach to a common approval over the changes made in bill.
Now, the bill is sent to other house (house of Lord) where it goes through same stages. With
approval from both houses it is preserved to Queen for a formal consent. With Royal assent form
Monarch the bill becomes a law.
Application of Common law:
Common laws are made through the previous ruling over cases which gets biding effect
through doctrine of judicial precedent. Under this the judges are required to refer the earlier
ruling made over a similar case to give a decision on a current lawsuit. This is applicable in both
civil and criminal cases. The judges in a court can deny the ruling only when there is
misinterpretation of the statues law or evidences are omitted to be considered while making such
decision. The judge on a similar case must refer the earlier decision and after a mistake is found
out than it can be denied with giving proper reason for it and a new decision can be passed.
Application of Statutory law:
These are the one which are enacted through act of parliament and the judges are
essentially interpreted with the help of internal and external aids formed in this regard which
includes, Hansards, dictionary, long and short title, others. The judges from both civil and
criminal cases presented before them identity the relevance law and its provision to be applied
over the matters and then pass a decision (Goodwin and Bates, 2016). The statutory laws must be
interpreted in correct manner without diluting the meaning and at is applicable to whole nation
with same convection. On one can raise question over the statutes law and its authenticity and
these are main law of the legal system of nation.

C) Defining impact that company law, employment laws and contract law have on the business
of a company using specific examples.
Difference between legislations, regulations and standard
As per the legal system of UK, the terms legislations, standards and legations are not
similar to each other. There are several differences between these elements of English legal
system. The legislations can be defined as a part of the legal system that provides information
regarding various laws and rules. These laws are applicable to each person of the country. In this
regard it can be said that the legislations are set of guidelines and rules as per which each activity
is needed to be performed by each person of the country. On the other hand, regulations are those
set of information that provides reason behind law formulated in the country regarding
performance of any activity. Therefore, it can be seen that regulations are being formed by the
government in order to provide a better understanding of several laws of the country.
In addition, standards are being developed by the Government in order to maintain a
minimum quality in each product or services traded in the country. The standards are applicable
on those business units that either manufactures goods or services or sales them to the customers
for consumption purpose. They need to comply with those standards at the time of
manufacturing goods or services for satisfying needs and demands of customers.
In this regard, it can be said that legislation, standards and regulations each term is
different from each other.
Impact of Company law
Companies Act 2006 contains several laws and rules regarding monitoring operations of
a company. The act contains 1300 sections that provides rules for the company starting from its
commencement till its liquidation procedures. In this regard, the company law of UK legal
system have a major impact over the business of a country (Company Law. 2019). For example,
due to application of company law 2006, the companies are required to prepare their financial
reports as per the modern financial reporting system developed by the institute of chartered
accountants of England and Wales. This requirement has developed a requirement of employ
some professionals for financial rep[orting purpose. In addition, the law also requires companies
to get their accounts audited with professional auditors. It impacts the cost of operations of the
business. In this regard, it can be seen that Companies Act 2006 of UK has its potential impact
on the business of UK.

Impact of Employment law
The legal system of UK contains numerous laws for providing protection to the
employees of country. Laws like National minimum wages act 1996, Equality act 2010, Ethical
code of conducts, Employment and labour law 2016, pension act 2006, Employment right act
2006, anti discrimination code of conducts, etc. are some parts of employment law. As no
business unit can survive without employing candidates for further operations, the set of
employment law have a potential impact on the business of a company. For example, If the
company employs a new employee in the company it would require formulating an employment
contract with the new candidate. In addition, in case of retirement of any employee from the
company, the business organisation is needed to fulfil each legal requirement mentioned in the
pension act 2006, employment right act 2006 and other acts containing laws relating to pension
provisions. It may increasing cost of operations of the business.
Impact of contract law
This law also have a major impact over the business of a company as it contains rules
regarding those activities that are the core element of each type of businesses that is transfer of
goods and services and gaining some consideration in the return. The consumer contracts
regulation 2013 contains rules regarding the activity of buy and selling of goods and services.
The company is required to prepare a contract with the party from whom it is selling or
purchasing goods or services and comply with all the legal requirements of contract law.
Implementation of this law helps the business organisation in improving its certainty of working
and building confidence for being prevented from happening of any unethical or financial loss to
the business organisation.
In this regard, it can be said that a business organisation of UK have a potential impact
from the rules and regulations of company, contract and company law of English legal system.
TASK 2
Presenting different types of business organisation
Sole trader:
Sole trader is that form of business which is formed and operated by a single person. That
person is the owner, mangers and director of the company who is wholly responsible for
conduction the business. The business property and asset belongs to owner only and similarly the
liabilities of sloe trader is upon owner itself. The liability of sole trade is unlimited and the

individual is responsible to meet the financial obligation of business out of personal property. All
the profits belongs to owners and there is not legal requirement of business registration. There is
no requirement for sole trader to follow legal system to operate the business.
Partnership:
Partnership business is the one which started by two to more person to run a business
with common objectives and goals. All the partners bring in capital to run the business and the
business profits are shared among all in their predetermined ratio (Nyoni and Hart, 2018). All
parters share duties and responsibilities of the business and run partnership together. A general
partnership business is not required to get registered and there are lesser legal requirement which
it need to abide with. The profits of business is not taxed rather the individual profits of partners
are taxed under their personal income.
Limited company:
A limited liability business is the one which is incorporated and registered as per the
provision of Companies Act, 2006 to Companies House. The business is run the operated by
mangers along with company secretary, internals auditors and employees. The owners of the
business are the shareholder who invest in the business and get a share in the ownership of
business. The profits of company belonging to shareholder and it is required to pay tax at the rate
of corporation tax. A company is required to follow all the laws and statutes mention above
while conducting its business (Bakarand et.al., 2016). The company on its incorporation become
a separate legal entity which make the liability of members and director limited to the level of
their investment.
Difference between incorporated and unincorporated business organization on basis of their
management and funding
Incorporated business:
Incorporated business is the one which is legally registered under the laws of UK which
includes limited company, limited liabilities partnership and others. These are the business which
are legally formed and operated. The management of these business is either through parents or
directors and managers. Along with this there are company secretory, employees and internal
auditors appointed to business to look in legal matters and abidance with financial policies and
standards as per given requirements. Upon incorporation a business gets an identity of a separate
legal person which have its own asset and property and the liability of business can not be

imposed on business owners and managers which makes their liability limited. The cost of
starting this type of business is high as to collect the funds is also a tough task as outside
investors are required to be convinced to invest in business in exchange for ownership in
business. The profits are taxed at the rate of corporation tax.
On the other hand the unincorporated business are the one which are not registered and
there is lesser requirement to meet legal obligations. This includes sole traders and general
partnership business. The business and owners are a treated as single unit where business assets
and liabilities belongs to owners also (Dorresteijn and et.al., 2016). The business profits are
taxed under the personal income of the owners and the liability of the owners/partners is
unlimited over the financial dues of the business. The starting cost of these type of business is
low as compared to incorporated business along with its management and funding.
Advantages and disadvantages of partnership and company
Partnership business:
The advantages of a partnership business is that it is not required to be registered and
there is not much legal obligation over this type of firms. The duties and responsibilities are
shared among the partners and all of them together put different ideas for taking a decision over
an issue of business matter. Disadvantages of partnership business are that profits of business is
shared among the partners and they have to pay tax on it under their personal income. The
liability of all the partner is unlimited for the financial dues of the partnership firm. With any
ideas the chances of dispute among partners rises which can make decision-making delayed.
Limited Company:
Benefits of limited company is that on its registration it become a legal person in eyes of
law which makes its distinct person from members and directors. Its posses its own assets and
have personal liabilities. Also, its gets right to sue and be sued as well under its business name.
The liability of members is limited under this business to the extent of investment in company.
Drawbacks of the limited company is that its setting up cost is very high and the owners lose
control upon its incorporation (Who's Gone Bust in Retailing 2010-19., 2019). Also, the business
is required to pay corporation tax on its profits and its gave to follow all the law and statutes
while conducting business operations.

SECTION 2
CASE 1
Presenting lelga advise to Champion Ltd for resolving the issue with its creditors
Issue: In the given case Champion Ltd is facing a problem of making repayments of its
dues to its creditors. The creditors are now threatening the organization of filing up a compulsory
winding up order for the business in order to realize this payment. The issues here is that
whether contention of creditors is right. If Yes, what legal action can company take in order to
stop legal action against company.
Rules:
Insolvency act, 1986
As per section 122 of the act, when a company is unable to repay its creditors and the due
amount is more than seven fifty pounds than its creditors a have a valid right to file a winding up
petition in court (Advantages and Disadvantages of Partnership, 2019). The court can give an
order to compulsory wind up the company and sales its assets and property and distribute the
realised amount among creditors in proportion of their dues from company.
Administration:
As per the provision of this act, a company can go under administration by filing a
portion I the court The court can give and orders for its and appoint an administrator who take
operation in his/her hand of the business. The administrator tries to bring the business to
profitable potion in a time of 2-5 years agreed between company and creditors. Meanwhile, the
dues of creditors are paid in small portion till the completion of administration period. The
creditors in this time can not file a winding up petition or take any leg la action against company.
As seen in the case of Realbuzz company of UK, which is a sportswear retailer have gone going
under administration in 2017. Many of the store of the company are closed down but still others
part of the company is unaffected and running under administration.
Application and Conclusion:
From application of above rules and case in the present case it can be stated that the
creditors have a legal right to file winding up petition in court to realise their amount from a
company. So in this can the company is suggested to go under administration where it can
continue to operate through administration like the Realbuzz company and can make the
business profitable.

CASE 2
Issue:
Mr. Anderson leaved the job in Amber Ltd. without complying with the term mentioned
in their employment contract and started doing job in Beta Ltd. Amber is seeking for imposing
injunction and stop Anderson to being employing in the Beta Ltd.
Rules:
 Employment law: In the English legal system, employment law and labour law 2006,
employment right act 2006, ethical code of conducts, etc. are some laws that provides
provisions regarding employment. These laws provide several rules and regulations that
are needed to be comply by both employer and employee of the country.
 Employment contract: As per the provisions of employment law, at the time of
employing any candidate in the business at any vacant position, the company needs to
formulate an employment contract with the new employee. The contract between them
contains several laws and rules that are needed to be comply with at the time of
performing any activity regarding the employment. This contractual agreement contains
several essential elements relating to the employment such as working hours, salary to be
paid, rules to be followed by employee, rules regarding leaving the job or terminating the
employee from the job, etc.
 Binding of employment contract: As per the provisions mentioned in the constitution of
UK and rules mentioned in employment law, both employer and employee are bound
with each condition mentioned in the employment contract made between them.
 Breaching of contract: if any party to the employment contract i.e. either employer or
employee performs any activity having overriding effect over the employment contract,
would be termed as a breach of contract.
 Claims for breach of contract : As per the provisions mentioned in the employment
law, if any party to the employment contract breaches any term mentioned in the
employment contract, the another party have right to sue against the defaulting party. The
innocent person have right to claim for compensation or order of injunction against the
party as well.
 Remedies available: Along with duties and responsibilities the employment law also
contains provisions regarding remedies available for innocent party, in case of breach of

any term of employment contract. Asking for monitory compensation, seeking for
injunction order against defaulting party, or combination of both, etc. are some remedies
provided under employment law.
Case law:
Lambeth v Agoreyo, a teacher performed an activity beyond the implied term of
maintaining trust with the organisation. Teacher approached courty and sued the organisation on
the ground of breach of contract as she was terminated from her job beyond the terms mentioned
in the employment contract. On this, the court held that the business organisation has not
breached the employment contract. Rather, teacher had breached the implied contractual term of
maintaining trust and confidence with the firm. On this ground, the court dismissed the claim of
teacher.
Application:
By applying all the rules regarding employment law in context to the breach of contract,
it can be seen that both employer and employee are bound to comply with each condition
mentioned in the employment law. In the present given scenario, the employment contract
between Anderson and Amber contains a term that he can not leave the job without giving a 12
months prior notice to the company. Although, Anderson breached this term and left the job
without giving a prior notice to the company. Further, by applying the above mentioned case
law, it can be said that along with complying with the conditions mentioned in the employment
contract, both employer and employees are also bound to maintain trust and confidence with
each other. In the given scenario, Anderson has breached the trust with Amber by starting
providing his services to Beta Ltd. who is a competitor of Amber Ltd.
Conclusion:
With the analysis of above application of numerous employment laws, per decided case
law over the given case scenario, it can be concluded that, there is a contractual agreement
between Anderson and Amber Ltd. having a condition that the Anderson con not leave the job
without giving a prior notice of 12 months to the company. As Anderson started working in Beta
Ltd. without providing any further notice, it can be said that he has breached the contractual
term. Further, as he has started working with the competitor of Amber Ltd. it can also be said
that he has breached his duty of trust with the company. Therefore, by analysing the rules
regarding claim and remedies against breach of contract, it can be further concluded that as Mr.

Anderson has breached the term of employment contract and duty. In this regard, it can be said
that the Amber Ltd. have right to claim the damages from Anderson. Along with it, the company
can also claim for passing the order of injunction against Anderson.
CONCLUSION
From the above report it can be concluded that the parliament is the main authority in the
UK and is solely responsible to formulates, alter and delete a law. The sources of the UK law
have been identified as act of parliament, delighted legislation, EU laws and case laws. The role
of government in making law is that a draft legislation approved by cabinet minister is presented
to parliament where both houses approve and after getting final approval from Her highness a
law came on being. The statutory law are applied in the court with interpretation of statutes and
its cannot be modifies whereas common laws are the decision of previous cases in which judge
can deny use of earlier ruling over emission of report in interpretation of law or evidence related
with case. The Employment, contract and company law defies and guides operations of the
business where a non abidance can result in legal consequences of impositions of fines and
penalties and sometimes imprisonment. Furthermore, it can be articulated that different types of
business organisations are sole trader, partnership and limited company. The incorporated
business is the which is legal and registered a where the unincorporated one is not registered but
is legal too. Moreover, the legal advise have been presented for two different business issues
where Champion ltd have been advised to go under administration to avoid the situation of
compulsory winding up order form courts. For the second case it has been suggested to Amber
led to take injunction order from court to stop Mr Anderson form taking employment in its rival
company.