Business Law Assignment: UK Legal System, Law, and Business Impact

This report provides a detailed analysis of the UK legal system, covering its various sources such as case law, common law, equity, legislation, EU law, international treaties, and authorities. It examines the role of the government, including the monarchy, executive, legislature, and judiciary, in l...Read More

BUSINESS LAW

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................1
ACTIVITY 1....................................................................................................................................1
1.1.................................................................................................................................................1
1.2 Potential impact of law on a business....................................................................................4
1.3 Effectiveness of the UK legal system....................................................................................5
1.4 Differentiate between regulations, legislations and standards, and their impact upon
business........................................................................................................................................5
1.5 Critical evaluation of the UK legal system and law..............................................................6
ACTIVITY 2....................................................................................................................................6
2.1 Legal formation of different forms of business organisations ..............................................6
2.2 Funding and managing business organisations .....................................................................7
2.3 review and assess the types of business organisations...........................................................8
2.4 Recommendations .................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business law helps in encompasses all kinds of laws that helps in dictating ways to run as
well as form a business. This assignment will lay emphasis on UK legal system and legal
solution to resolve case studies related area of disputes.
ACTIVITY 1
1.1
UK law source
There are five main UK law source namely:
 Case law: it is one of the most important part of law making (Hulme, Wood and Xin, 2019).
 Common law: legal system of Wales and England is a kind of common law so the
decision of senior courts become a part of law.
 Equity: it is a distinct part of England and wales law. It is a kind of law body which was
developed by English court which is now mainly administered concurrently with the
common law or case law.
 Legislations: It is a kind of law which is either created by Acts of parliament or by legislature
it is one of the most important part for new laws. Rest of the law sources do not reflect any
kind of changes that can be quickly changed and today it known as passing statute. UK
parliament was once a Principle legislature and it is the only body that has the power to pass
any kind of law that are applied in all the four countries.
 EU law: As it is already known that UK is a part of EU that means laws of EU takes
precedence over laws of UK (Nachemson Ekwall and Mayer, 2018). It can also be said that
EU laws are a part of British laws. European communities Act, 1972 so that EU law can be
recognized as a part of British law. Human rights Act, 1998 has become a kind of domestic
law to incorporate European convection on Human rights.
 International treaties: International is also known as nations law. It is a kind of body of rules
that regulates the conduct of sovereign states in their relations with one another. Sources of
international laws most commonly includes international treaties. International treaties are
one of the most common source of international laws. These are a kid of arrangements that
typically happens between sovereign states.
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 Authorities and Writer: Local authorities of UK have a democratic mandate to pass bye laws
(Lombardo and Mucciarelli, 2019). All kinds of written laws are created by developed
legislation and parliament who can overrise a case law.
Role of government in Law
Government plays a vital role in law making. UK government has four arms and each of the
arm pays a vital and distinct role in law. UK government arms and their roles have been
explained as:
 Monarchy:
 British monarch is limited in power. It is head of the states and head of the nations.
Monarchy serves as public face of Britain.
 They play a vital role as they perform ceremonial and official duties for example:
opening sessions of parliament, prime Minister appointing, honouring citizens of Britain
and representing Britain in international community (Wilke and Macpherson, 2019).
 Executive:
 government machine themselves helps in making Executives i.e. Prime minister, local
government branches like city majors etc., PM office.
 They are mainly responsible for bill implementation that are produced by parliament but
are limited in actions by publicity and Judiciary.
 Legislature:
 Parliament is the British legislative body and it is made up of two main houses: House of
commons and house of lords.
 Four main types of duties are performed by legislature: law passing, tax authoritization
and budget of government, investigating and scrutinizing government administration, and
current issues debating (Croce, Ughetto and Cowling, 2019).
 Judiciary:
 It is the last branch of UK law. It is made up of courts in which supreme court is on the
top. All judiciary branch members have great powers as decision of deciding what kind
of law will actually imply in a given case.
 Power of judges is higher in UK as they do not write laws, so no supreme set of laws are
collected in one place for the citizens.
Law making process
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Define bill: A bill is a kind of proposed legislation under considerations by legislature. A
bill has to go through many steps in order to become a law (Foreman-Peck and Hannah, 2016). It
has to be passed by legislature and approved by executive. Once a bill is passed it is known as
act of legislature.
Stages of bill to become a law are as follows:
 Legislate decision: for each parliament government session has a legislation programme
which is basically a plan of bill that will be asked in the parliament to be considered.
Government department focuses on bill proposal in order to be included within legislative
program.
 Bill preparation: After been achieving slot within the legislative program, preparation of the
bill is done by creating a bill team.
 Bill introduction: in order to be introduced, it is important to conduct a PBL committee. After
PBL committee is satisfied bill is ready to be introduced (Restrepo and Subramanian, 2017).
 Five parliament stages: each bill need to go through five stages before it becomes a law:
 Formal stage is the first stage where only reading is done.
 In second is reading stage in which debate about main bill principle is done where mainly
explanation is done
 Third is committee stage in which committee of public bill in the common take written
and oral bill evidance.
 Fourth is reporting stage in which voting for the bill is done. Bill is required to be
approved by the committee.
 Last is third reading stage where general discussion on the bill is done after reporting
stage.
 House of Lords and further Later Stages: it is required to agree on all the text of bill
especially for house before becoming an act i.e. after amendment in second house bill is
returned to house first for considerations of those amendments.
 Royal Assent: After passing from both the houses, bill is required to be given Royal Assent
and after this it becomes an Act (Azmi, Abd Razak and Ahmad, 2017).
Common law, Statutory law that are applied in UK Justice courts
Statutory law: these laws are already written laws that are directly needed to applied to a specific
case.
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Common law: it is developed every day so that there is no fictionalization of society.
1.2 law potential law on business
Company law
Company law focuses on regulating corporations that are formed under companies Act
2006. Company law 2006: it mainly helps a business or organization to run their business with
effectiveness and efficiency (Wood and Salt, 2018). This helps in applying various kinds of
regulations to the organizations which further helps in limiting their overall power. This act
focuses on explaining all the shareholders including customers, employees, board of directors
with their duties towards the organization and their rights. This act basically focuses on
describing complete process of company formation, legal procedure they need to follow etc.
Company law majorly impact a business or organizations because one the basis of this law
business type is described, legality of business is explained.
Employment law
Employment law is a kind of contract of service or a mutual agreement between
employer and employee where some mutual agreement exist between them. This law helps in
binding some defined legal regulations and rules which further helps in building a relationship
between both employer and the employee (Chaffey, Hemphill and Edmundson-Bird, 2019).
Main aim of this law is that it helps in protecting benefits and rights of both employees and
employer. It itself includes different kinds of laws such as safety act, wages act, security act and
many more. This law impacts a business in many different ways because breeching of any of the
act can affect rights of employers or employees which can further affect the productivity of a
business.
Contract law and its impact upon business
It is a kind of agreement that happens between two or more than two parties and helps in
building a legal relationship between all the parties who are in a contract. It is a kind of promise
between all the parties so that in case of breeching a contract proper and legal actions can be
taken in order to provide justice to other parties involved in a contract. It can affect impact a
business in a drastic manner as it helps in protecting rights and responsibilities of an
organizations such that business can be secured from wrong practises.
1.3 Legal system of UK and its effectiveness
Legal system in terms of The Woolf Reform
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Lord Woolf Reform was initially intended to help in reduction of time and cost a court
spend upon civil proceedings. In this report three main critical issues were identified that were
faced by civil justice system such as: delay, costs and complexity.
Legal system in terms of other reforms
 Technology and construction court: It helps in handling disputes about engineering,
buildings, surveying, cases resulting from fire etc. In this cases less than £249,000 are not
handled until and unless there is an appropriate reason to handle it.
Admiralty: it is a tribunal with jurisdiction over maritime law including cases related to
ocean, shipping and sea laws. Initially these courts were separate from court system but today
but today these cases can be assigned within regular court system.
 ADR: It is generally used to describe all kinds of dispute resolution methods (Devenney and
Kenny, 2017).
Legal system in terms of administrative Law court
Administrative law court is a kind of court that specializes in administrative law especially
disputes related to exercise of public power. Their main role is to ascertain that official acts are
consistent with the laws.
1.4
Legislation
Legislation is a kind of statutory law i.e. law that have been enacted by the legislature or
those laws that legislature enacted or laws that are still in process of being enacted. It is a kind of
legal requirements description and punishment of violating any law. Legislations can impact a
business drastically as if any business violates any kind of law related to business such as
employment law, contract law then both the employee or employer can face legal actions.
Regulations
Regulations are detailed instructions on ways in which laws are carried out or enforced.
Sometimes these are also known as rules or administration laws (De Munck, Brunt and Sinnett,
2019). There are two types of regulations government regulations and self-regulations. Not
following any kind of regulations especially government regulations can impact a business in
many ways such as they can face any kind of penalties.
Standards
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These are a kind of specifications that helps in making things work for system, services or
products. If these standards are used consistently then they help in ensuring safety, quality and
efficiency. These standards can also be known as reference document. These documents helps in
proving details about basic criteria’s that are involved and required to be focused on.
1.5
UK legal system and laws of UK are developed using various sources of laws. These
different sources of laws such as common law, EU law, legislations, international treaties,
authorities and writers helped in building and defining laws of UK in a much-detailed manner
(Riefa and Willett, 2018). But legal system of UK has a fixed set of process that helps in passing
a bill in order to be made a law. These fixed set of stages helps in passing a bill in order to be
made a law.
ACTIVITY 2
2.1 Legal formation of different forms of organisations
An incorporated business is known as separate entity from business owner and
includes corporations and contain natural rights. On the other hand unincorporated
business such as partnership companies or sole proprietor is similar to business owner in
which owner bears the business outcomes (Allen and Blackham, 2018). Difference between
both of these organisations are as follows:
Incorporated (Corporation) Unincorporated (Partnership or sole
proprietor)
Protect owner from liabilities Owner is responsible for all liabilities
File separate business tax return with
flexibility in taxation
Owners can file individual tax return
Greater ability to raise money Needs to draw deeds for property transfer or
raising money.
Different types of business organisations are as follows:
Sole trade: In sole proprietorship only one person own or operate business. In this type of
business owner has responsibility for all business debts and is not subjected to corporate taxes.
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Only taxes on profits are paid. It consist of minimum legal formalities and personal assets can be
freely mixed with business. Sole traders are not permitted to raise capital by selling an interest.
Partnership: In partnership more than one individual voluntarily operates business as co-owners
for profit (Lord, 2016). It has greater legal liabilities about profit sharing, decision making and
resolving disputes.
Corporation: It is known as artificial individual developed by law with optimum legal rights of
real person. This type of business forms are required to pay multiple taxes and have limited
liability.
Characteristics of private and public companies:
Private company Public
These companies have shares to only some
investors which own and trade privately.
Public companies can sell their shares to
general public and are traded or owned
publicly
Share transfer is restricted in public
companies.
Share transfer is fee.
These companies can start the business
immediately after incorporation.
Public companies can start business only after
receiving certificate of commencement of
business as well as incorporation.
2.2 Funding and managing business organisations
The management practices differs from one form of business to other. In partnership all
partners have the responsibility to manage funds as they share profits and risk. Decision making
process also depends upon mutual coordination among partners. In context of limited company
various individuals follow different rules and records are kept for the reference (Nyoni and Hart,
2018). Shareholders in such organisation are liable to pay corporate taxes on time for smooth
business operations. Sole proprietorship owners are not allowed to raise capital by selling
interest. There is undivided risk and unlimited liability. However sole proprietor firms can raise
finance to limit only as economies of scale are not allowed. On the other hand partnerships
provide favourable taxation and it is not required to pay minimum taxes. It is easy for the
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partners to financially fund business. The corporation firms have advantage that they minimise
the liability of owner to losses or debt because profit and losses are related to corporation only.
Managing funds:
The first choice for managing funds is to have personal funds in which owner uses their
own funds. For the large sized companies bank loans can also be used which are more secure and
also provide tax benefits (Rahman, 2018). Some sole proprietors and limited companies can also
use angel investors which make investments in high return rates. In case of failure there is no
need to make returns. For the start ups and high risk businesses venture capital can also be used
as financing option. This type of funding also gives knowledge resources and includes high
amount of funds.
2.3 types of business organisations assessment and review
Review:
There are few main types of business organizations known as: sole trade, partnership and
companies. Sole trader and partnership are mainly unincorporated types of legal forms i.e. they
do not have separate legal personality.
Evaluation of forming an incorporated and unincorporated organization
There are mainly two classes of business organizations incorporated and unincorporated.
Corporations comes under Incorporations and sole traders and partnerships comes under
unincorporated. One of the main advantages of unincorporated business is that the owner does
not have to deal with paperwork and cost which is required to undergo the process of
incorporating where as owners of incorporation organizations need to deal with it.
Evaluation of forming private and public companies
One of the main advantages of forming a private company is that all the members of a
private company are well known to each other but has one disadvantage i.e. main control is in
the hand of owner of capitals whereas main advantage of business organizations is that capital
can be raised through public issues of shares (Riefa and Willett, 2018).
2.4 Recommendations
Case A: Thomas and JVC Plc
From legal perspective a limited company is separated from shareholders and directors.
Thus as board of directors Thomas will have duty of care towards its employees, creditors and
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shareholders. Though in general directors are not liable for paying for services or debts in case
company is struggling to survive. In such situations only company assets are at risk. However
there may be certain circumstances in which directors can be held liable such as in case when
director has signed personal guarantee or when director has disposed of company asset at lower
market prices. Insolvency situation occurs when organisation is unable to pay debts while
liquidation is defined as the legal termination of limited company (Zhang, 2018). Company
voluntary arrangement (CVA) will allow JVC plc to pay off their debts in fixed duration and to
provide opportunities to solve the issue. In formal insolvency professional advisors can help
organisation and CVA can also give some benefits. Directors are responsible to have complete
knowledge and understanding of organisational procedures and thus with professional support it
will be possible for Thomas to deal with the situation without being liable for paying services. A
liquidation can take form of creditor voluntary liquidation and thus it can lead to additional
expenses and there are higher possibility for Thomas for being held responsible or liable for
paying.
Case B: Augustine and Smart equipment Ltd
Wife of Augustine could have file law suit against Smart equipment Ltd because
organisation refused to give her job because she is female and her husband being a male was
assumed to be stronger and more capable. The equality act 2010 states that it is unlawful for the
employer to discriminate on the basis of gender (Parry and Gwaza, 2019). Thus organisation
cannot refuse to give job to any candidate on the basis of their gender. Environmental protection
act 1990 describes the fundamental duties for organisation to manage waste and regulate
environmental emissions. As legal implication of the law organisation is liable to pay
compensation or financial penalties. Smart equipment has also violated the data protection act
1998 as organisation shared the personal information of Augustine with other individuals or
organisation. Against this lawsuit Smart equipment can also claim that the action was made in
response to highlight the crime committed by Augustine.
Defendant used symbols and images of the organisation for registration of another firm
which is violation of UK copyright, design and patent law 1988. For resolving the discrimination
charges organisation can use mediation process (Yeoh, 2019). It can be negotiated and
communicated that though discrimination was made but it can be communicated and negotiated
that job was offered to husband of plaintiff. One of the benefit of this legal process is that is can
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resolve conflict in very low cost and compliance level is also very high. For the data protection
violation lawsuit can be used so that suitable damages can be awarded to plaintiff or defendant
can justify their actions.
Case C: Daniel and smart equipment Ltd
In the give case study Daniel was comfortable with the job condition and terms. However
without any prior information the organisation declares the compulsory overtime. Daniel refused
to follow the same and thus was forced to give resign from the job. Constructive dismissal is
known as the changing of working conditions which forces an employee to leave the job. Daniel
was also forced to give resign due to new imposed overtime condition. Various alternative
dispute resolution types such as facilitated discussion, mediation and negotiation can be used to
resolve conflict (Coulter and Hancké, 2016). A facilitator from the Smart equipments can help
Daniel to understand that overtime decision was not aimed at his dismissal instead it was due to
organisational growth objectives and requirements.
Instead of litigation organisation also negotiate with Daniel so that a beneficial outcome
can be achieved. The negotiation will not only benefit Daniel but will also be helpful for the
organisation. Another way to resolve the conflict is to use mediators or impartial third party
which can resolve conflict through communication. The mediation is beneficial in terms of cost
and controlling and can also help organisation to maintain confidentiality so that other
employees does not show any opposition or challenges. Daniel can seek help from employment
tribunal which is an independent judicial body for resolving employment related issues. On
successful claim of unfair dismissal a suitable compensation and reward can be awarded to
Daniel.
Case D: Jarret & Janet and Italian restaurant
Jarret and Janet ordered red wind in a restaurant and it was found with decomposed snail.
The negligence from the staff members lead to stomach upset and diarrhoea to Janet. In the event
defendant acted negligently which resulted in the severe health issues to plaintiff. It was duty of
defendant to serve safe and healthy food (Payne, 2018). However restaurant breached this duty
and a contaminated wine was served which caused stomach upset. Thus the injury was totally
caused by the actions of defendant and thus they are liable to compensate for the damages caused
to Janet. As per the law of negligence it was required by the restaurant that services must be
provided in a way which confirms the certain quality and safety standards of conduct. The
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personal injury claims of Janet is valid from all these elemental perspectives and thus they are
liable to litigate the restaurant on the basis of negligence law.
CONCLUSION
From the above assignment it has been summarized that there are various kinds of laws that
can impact a business in many ways. It has also been analysed that there are various kinds of
business organizations and each of these organizations are managed and funded in a different
manner.
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