Business Law Report: Business Law and Legal Advice for Business

This report provides a comprehensive overview of business law in the UK, focusing on the sources of law, including European Law, Parliament, and the Courts, and their impact on business operations. It delves into the significance of contract and employment laws, outlining key elements such as offer, acceptance, and consideration in contract law, and the rights and obligations of employees under the Employment Rights Act 1996. The report also addresses a business problem faced by Country Pine, a furniture company, providing legal advice on converting from a sole trader to a limited company to facilitate business expansion, and justifying this advice based on the advantages of limited liability and increased efficiency. Additionally, it explores methods for resolving business disputes, offering a holistic view of business law principles and their practical application. The report is a valuable resource for understanding the legal landscape of business in the UK, particularly for businesses looking to expand and navigate legal challenges.

Business Law
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Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Sources of laws......................................................................................................................1
P2 Role of Government in Law making.....................................................................................2
TASK 2............................................................................................................................................3
P3 Impact of Employment and Contract Laws on business........................................................3
TASK 3............................................................................................................................................4
P4 Solution to the business problem...........................................................................................4
P5 Justification for legal suggestion...........................................................................................5
TASK 4............................................................................................................................................6
P6 Methods for the resolution of disputes...................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
Alix Adams Books...........................................................................................................................8
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INTRODUCTION
Business laws are essential form of statutes that regulates the functioning of companies in
the market. It is binding upon all for fair trade and commerce. The Law of Contracts, Consumer
Laws, Employment Laws, Sale of Goods, etc. are some of the statutory obligation over the
business entities. Moreover, there are certain Civil liabilities that need to be comply in order to
perform the functioning of an organisation. In the given case study Business Future is
consultancy organisation which provides their advice to start ups and also to such organisation
who wants to expand their business. Country Pine is one their client. They assemble pine
furniture and working as a sole trader. Country pine wants to expand their business, so they are
looking up to the Business Future for legal and market advice. Also they had a dispute with a
supplier of timber from Poland and they want to settle it harmoniously. This report is about
various sources of laws that constitutes to form a business statutes. Also, business advice has
been provided to the client regarding their expansion of business.
TASK 1
P1 Sources of laws
A well developed society is defined by various factors and one of them is the application
of laws. Laws came into existence from an ancient period earlier it was tribal laws, then comes
the Civilisation, so they mend it according to the circumstances. Conclusively, laws are not
definite it usually depend on the circumstance in which a civilisation has been established.
Similarly laws related to business and trade variate from time to time. For now, in United
Kingdom, the sources of laws are from three factors, the European Law, Parliament and the
Courts. Generally, there are two sources of laws, Primary and Secondary. Legislature and
European Laws are the primary sources of law in UK while the Courts are secondary, that is their
judgements and precedents.
The European laws are originated in 1973 and spread all over the Europe. These laws are
the essence of Roman Empire. Treaties and directives are the significant source of European
Laws. Moreover regulations and decisions are also a significant part of forming the laws. Since,
treaties are legal obligation on two different states, these are mostly use to regulate the
functioning of business between them. European Union, established under the European
Communities Act 1972, is the most significant part of primary source as it is responsible for
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implementation of laws. EU is comprise of councils of ministers, European Parliament,
Commission and Court of Justice. (Alix and Adams)
Business laws are originated from these sources. For starting up an organisation it is
essential to abide by the business laws. Moreover, it is most important to know in which sector a
company is going to perform. There are only two types of sector, Public and Private. Public
sector is control by the state whereas the private one is controlled by the private lobby. Apart
from the sector there are certain forms of partnership, Limited, Unlimited and Limited Liability
Partnerships.
Limited Partnership and Limited Liability Partnership, are such which deals with the
limited liability of partners. According to it the responsibility of paying debts and incurring
losses are limited. Where as, in Unlimited Partnership it is totally depend on the owner of the
company, that is only an individual is responsible for debts and loss. But, the profits are earned
and invested in an individual in Unlimited Partnership, unlike Limited one. Sole Trader is on of
its kind, here the debts and profits are incurred by only the owner of the company.
In order to form an organisation it is necessary to follow some procedures that are
mentioned in Companies Act 2006. There are certain principle that needed to be comply with,
such as Memorandum of Association, which provides the complete detail of the amount of
capital invested in a company and shareholders. Moreover, for the functioning of the
organisation there exists an Article of Association, which is comprised of the constitution of the
company, appointment of directors and function of it. It also includes the liabilities of the
directors and it members. (Bodie, Z., Kane, A. and Marcus, A.J., 2014)
Country Pine wants to expand their business and are willing to convert into a limited
partnership, so they have to abide by the rules and regulations of the Company laws and certain
other statutes.
P2 Role of Government in Law making
It is conspicuous that the laws are not made by their own. There are certain procedure in
order to form a law. Generally, the governing body includes the legislature, executive and the
judiciary. In UK there is nothing above the Queen. The state is governed by the Queen,
legislature and the court. Forming a law is a futile process, it involves passing of the Bill by these
governing bodies in order to make it an Act of Parliament.
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There are three types of Bills, Private, Public and Hybrid. A private bill is such which
influence the interest that are vested in an individual unlike a public bill, which affects the
interest of public as whole. A hybrid bill is a mixture of both, it is a public bill which affects the
interest of the an individual.
A bill is proposed in the parliament in its First Reading. A discussion or debate on the
facts of the bill takes place in its Second Reading. After that the bill is passed for its
scrutinisation to a committee in its Report Stage. Then it represented again the house of
commons for the final discussion and amendment, if there is any. After passing from the
legislature is presented before the Queen in order to obtain Royal Assent. A bill becomes 'an Act
of Parliament” after getting such assent. This is how laws are formed in United Kingdom and
then implemented by European Commission.
TASK 2
P3 Impact of Employment and Contract Laws on business
Business is regulated by two major laws, that is Law of Contract and Employment Laws.
In UK, contract laws are the essence of English Law of Contract, according to it there are certain
principle which makes a contract a valid one. These elements are offer, acceptance, consideration
and intention to form a contract. In order to form a contract there must be an offer and to that
offer there lies an acceptance which should be made without any inducement. Also there must
exist an intention for forming a contract without such a contract is invalid. Moreover, the
objective of a contract should not prohibit the law, that is it should not conspire with any
provisions of the law. (Fisher v Bell) a contract is invalid without any consideration, it must be
legal one. Considerations are generally the amount paid for the promise between the parties.
An agreement which is enforceable by law is known as contract. For establishing a
relation between an employee and employer there exist a contract of employment. There are two
types of contract, 'contract for service' and 'contract of service'. Both are different, an employee
is under signed by a contract of service. It is mandatory for an employee to abide by the
instruction given to him by his employer but not such instruction that are illegal (Morrish v
Henlys Ltd, 1973). Apart from the legal obligation there are certain rights which has been
provided to an employee under Employment Rights Act 1996. These rights are given against the
discrimination, dismal and redundancy.
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In the given case country pine is expanding there business which would result in increase
of work force. In order to compete with these challenges they have to appoint new workers. But
they are confused whether the newly appointed workers are self-employed or an employee to the
company. As per section 230 sub-clause 3 of the Employment Rights Acts 1996,a worker is
between self-employed and an employee, also it has entered into a contract of service with the
organisation. In the Uber taxi case, Aslam v Uber BV, it was held that the workers are employees
to the company and they are entitled for minimum wages and sick leave under the Act of 1996. it
is clear that the newly employed workers by CP shall have a profile of an employee, so they are
eligible for a minimum wages and all the rights and liabilities under the Employment Rights Act
1996. (Eren, S.S and et. al., 2012)
TASK 3
P4 Solution to the business problem
Business is all about competition and standing in the market with optimum strategy.
Competition in market is kept on increasing and it is a headache for newly formed organisation
to make their stand in the market also it is tough for the existing companies to expand their
business for earning more profits. Everyday a new organisation is is originating the business
market with new and innovative ideas, which makes the already existing one insecure, so they
have to come up with new ideas and expansion to keep their position intact in the market. (Foss,
N.J and Knudsen, C. eds., 2013)
The challenges that all the organisations, whether a new one or an already existing one
face are the appointment of right talent, competency, uncertainty of future of the organisation,
rules and regulations, costumer service, technologies, etc. In order to come up with these
challenges they have to think out of the box and be the leader in their sector.
In the said case, CP is going to expand their business that is they are converting from sole
trader to a limited company. So there are certain challenges and problems that they will face in
such shifting. First of all they have to get registered under the Companies Act 2006 to become a
limited company. After such incorporation they have to appoint new employees with the right
talent and also they have to abide by the rules and regulations related to company laws and
business laws.
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Being a sole trader provides certain advantages such as there is less paperwork and the
profits are earned by an individual but becoming a limited one increases the paperwork,
especially for the Directors of the company. It is their fiduciary duty to file an annual tax report.
Similarly there are certain legal obligations that needed to be comply by becoming a limited
company. The share of the company shall be distributed in a limited company between the
partners. They are liable for the amount of debt they invested as a capital in the company.
(Grundfest, J.A., 2010)
If CP is going to convert from sole trader to limited company then they have to face such
problems but it is beneficial for converting in a limited one as it will increase their profits.
Moreover, appointing the new employees will increase their efficiency to face the work force
also it will provide them with new and innovative ideas. Also they have to comply with latest
technology in the market which will increase the working limit of the company. Converting into
a limited company is the best option for Country Pine for making their stand in the furniture
market.
P5 Justification for legal suggestion
The legal advice provided to Country Pine for shifting from sole trader to a limited a
company is a genuine one as they want to expand their business for earning more profits. Being a
sole trader has its own advantages such as the profits are gained by an individual and there is not
much paperwork. But unlike a limited company a sole trader has to bear the losses and debts on
their own that is the liabilities are unlimited and only an individual is liable for sub
responsibilities. A limited company is a separate organisation, the investors and shareholders are
liable for the amount they have signed as capital. Also it provides an authenticity to the
organisation and that helps in attracting more investors and consumers.
A sole trader cannot grow it business to the other level as they are confined to the limits
of their local market but a limited company can expand their business worldwide. It is obvious
that being a limited one not only attracts the investors but also the costumers as it will create a
bond of trust between them and their consumers. A limited company can grow more swiftly than
a sole trader, moreover the product they are going to sell shall not be entitled for bargain like a
sole trader.
The partners of a limited company are liable for the action of their own. If a member does
a fraud then the other partners will not going to suffer the losses. Also it provides various classes
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of shares and according to that liabilities are assigned to its holder. Being a limited company,
business can grow to its optimum level. So it is evident for Country Pine to become a limited
company.
TASK 4
P6 Methods for the resolution of disputes
Disputes are the significant aspect of performing a business. It is evident that if the
parties to the contract does not perform their duties then this will give rise to the conflict of
interest between them. But there are certain ways it can be resolved. Generally, it can be done in
two ways, either by filing a suit in the Court or by the methods given in Alternative Dispute
Resolutions. The earlier method is an expensive one. The best way to resolve a dispute is by the
method of ADR. (Johnson, L., 2013)
An ADR is comprise of Arbitration, Mediation and Negotiation, as its major methods. It
is less expensive and time consuming. The parties don't have to get indulge in the hectic and log
proceedings of the court. With the help of these methods it becomes easy to resolve the dispute
between the party moreover it restrict the increase of cases in the Court. The best way to resolve
a dispute effectively and with less expenses is the method of Arbitration.
An Arbitration is such method in which a third party is appointed which acts neutrally to
help the disputed parties for coming on an agreement to the dispute. The person who appointed is
know as an Arbitrator. Each party appoints its own arbitrator and the appointed arbitrator elects
an Umpire who acts impartially. An award is given to the parties after resolving the dispute and
it is binding upon them. Appeal cannot be made for such award until and unless if it is provided
without natural justice and equity.
When the dispute is of lighter nature then it can be solved by the method of Mediation. In
this method a third person is appointed as a Mediator. The appointed person helps the parties to
come up on a solution to the dispute. The appointed person can be an expert in their field similar
to an Arbitrator.
Conciliation is similar to the Mediation only difference is the person appointed is known
as Conciliator and the solutions are provided by that person. Also he is responsible for the
solution which he provides to the parties but the parties are not obliged with such solutions.
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Then there is Negotiations. It is the most cheapest and simplest way to resolve a dispute.
In this method parties are involved no third party or person is appointed. During such process
parties come upon an agreement which is enforceable by law and is binding upon them.
In the given case Country Pine is supplied timber by a Poland Supplier. Everything was
going smoothly but on certain circumstances they were fail to supply timber in prescribed time.
So to resolve this dispute it is not necessary to sue the party as their business relation is
harmonious. It can be resolve by the way of Negotiation and if this does not help then they can
enter into Arbitration. (Ye, Q and et. al., 2011)
CONCLUSION
Business laws are made for performing fair trade. In this report it has been discussed how
the business laws are formed what are its sources and how they are implemented. Also it
provides an overview to the resolution of disputes by the method of ADR. It also provides
consultancy to the given client converting from a sole trader into a limited one, it positive aspects
and procedure for the incorporation. Relevant cases and references are also provided to justify
the statements given in this report.
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REFERENCES
Alix Adams Books
Pepper v Hart (1993, HL)
Fisher v Bell (1961)
Adler v George (1964)
Smith v Hughes (1960)
Royal College of Nursing v DHSS (1981, HL)
Sweet v Parsley (1969, HL)
Books and Journals
Bagley, C.E., 2010. What's Law Got to Do With It?: Integrating Law and Strategy. American
Business Law Journal. 47(4). pp.587-639.
Bodie, Z., Kane, A. and Marcus, A.J., 2014. Investments, 10e. McGraw-Hill Education.
Crane, A and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
DiMatteo, L.A., 2010. Strategic contracting: contract law as a source of competitive advantage.
American Business Law Journal. 47(4). pp.727-794.
Eren, S.S and et. al., 2012. Caching message fragments during real-time messaging
conversations. U.S. Patent 8,255,473.
Foss, N.J and Knudsen, C. eds., 2013. Towards a competence theory of the firm (Vol. 2).
Routledge.
Grundfest, J.A., 2010. The SEC's Proposed Proxy Access Rules: Politics, Economics, and the
Law. The Business Lawyer, pp.361-394.
Johnson, L., 2013. Unsettledness Delaware Corporate Law: Business Judgment Rule, Corporate
Purpose. Del. J. Corp. L., 38, p.405.
Kinicki, A and Kreitner, R., 2012. Organizational behavior: Key concepts, skills & best
practices. McGraw-Hill Irwin.Swartz, L.B., Cole, M.T and Shelley, D.J., 2010.
Instructor satisfaction with teaching business law: Online vs. onground. International
Journal of Information and Communication Technology Education (IJICTE). 6(1),
pp.1-16.
Ye, Q and et. al., 2011. The influence of user-generated content on traveler behavior: An
empirical investigation on the effects of e-word-of-mouth to hotel online bookings.
Computers in Human Behavior. 27(2). pp.634-639.
Online
Alternative dispute resolution (ADR). 2017. Available through
<https://www.citizensadvice.org.uk/consumer/alternative-dispute-resolution/settling-
out-of-court/>.
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