Business Law Report: Analysis of Business Organizations and Disputes

This report delves into the intricacies of UK business law, examining its various sources such as legislation, common law, European Union law, and human rights. It explores the role of the government in law-making and its implications, alongside an analysis of the impact of company, employment, and contract law on businesses. The report also provides a comparative analysis of different business organization types including sole traders, partnerships, companies, and franchising, evaluating their advantages and disadvantages, management, and funding. Furthermore, it investigates legal solutions for resolving business disputes, including the effectiveness of legal advice and support. The report offers a critical evaluation of the UK legal system and its effectiveness in maintaining order and guiding public behavior, providing a comprehensive overview of business law principles and practices.

BUSINESS LAW

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different sources of law..........................................................................................................1
P2 Role of government in law making and its implications........................................................3
M1 Effectiveness of the legal system..........................................................................................3
P3 Impact of company, employment and contract law on businesses.........................................4
M2 Difference between legislation, regulations and standards...................................................5
D1 Critical evaluation of the legal system and law.....................................................................5
P4 Types of business organisations formed legally.....................................................................5
M3 Advantages and disadvantages of formation of different types of business organisations...6
P5 Management and funding of business organisations..............................................................7
D2 Evaluation of different types of business organisation's........................................................8
TASK 2............................................................................................................................................8
P6 Legal solutions for resolving business disputes......................................................................8
M4 Different sources of legal advise........................................................................................10
D3 Effectiveness of legal solutions, legal advise and support for dispute resolution................10
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
Law is termed as the binding rules of the conduct that are meant to enforce justice and
prescribed duty or obligation. It is termed as the system of rules that are created and enforced
through social or governmental institutions to regulate behaviour. Legal system of UK is derived
from different sources and a well defined method is used to implement various laws that help in
governing different sectors in the country to make an profitable and developed economy.
Designing a legal system is not easy as it involves some facts that needs to be modified and set
as per requirement. On this basis a legal system in the country is termed as combination of
science and art. In UK legal system is divided into different segments that work in specific fields
to provide more effective results and develop a system which helps in implementing rules and
regulations in whole country (Miller, 2013).
The whole project scenario revolves around business law from its generations to
implementation and importance in the economy. As business is one of the important factor that
helps in governing economy of a country. In UK business is expanding well and requirement
generated to introduce a separate law that governs all the business activities in the country. All
rules and regulations are defined in this law that helps in governing business and breach of any
law leads to penalty. The project report consist of different sources of law in UK and role of
government in law making and its implications. Impact of contract law, employment law and
company law on businesses is also mentioned in this report. Formation of different business
organisation in legal manner. Together with this management and funding of organisations and
legal solutions to different disputes arises in business is provided to the resolve various issues.
TASK 1
P1 Different sources of law
The four main countries named England, Scotland, Wales, and Northern Ireland that are part of
Great Britain. In UK various laws are prevailing in each of these places which are governing the
people and their working. There are four major sources of laws such as legislation, European
union, human rights and common law (Lloyd, 2017).
Legislation law- This law comprises of acts of parliament and it is created by the
legislature. This is supreme body that possessed the power to pass laws in any part of the UK.
House of commons and House of Lords are the two main part of the parliament each of them
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follows certain procedures to select the MP for particular constituency. Members of parliament
are given titles of lord and lady.
Common law- This is also called as case law, as per this law decisions are taken
according to the judgement of preceding cases. It does not consist of written rules and is used to
determine the solutions for unconventional cases. This is based on the interpretations and
opinions of judges and juries (Sources of Law, 2015).
European union law- Such laws prevail with in the various state of European Union.
There are two main parts of this law Primary which creates grounds rules for the European
continent while secondary legislation consist of decisions, regulation and directives.
European Convention on Human rights- under this law rules were created to protect the rights of
humans and enduring political freedom in the entire Europe. It was created to avoid the atrocities
which occurred during the time of second world war. Effective political democracy is the major
principal of this law.
Illustration 1: Sources of law, 2015
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(Source: Sources of law, 2015)
P2 Role of government in law making and its implications
Formation of legal system in a country is hard work of several years and an effective
legal system in the country is termed as backbone that will help in introducing new laws and
policies to maintain healthy social environment. Parliament is the highest authority for
formulation of laws in the country but requirement of the laws are suggested by the government.
As government of the country is the one who is involved with the general public through
different channels. Various authorities are established to resolve issues and government of the
country deals in each sector in the economy and well aware regarding loop holes and scope of
improvements (Ferrero and Sison, 2014). Parliament gives approval to laws but foundation of
these laws are introduced by government of UK. Ides and importance of the new law is provided
by the government to parliament by evaluating each aspect. As government have all the
information required and conduct many surveys if any information needs to be extracted this
helps parliament to be available with all the information required for decision making. A draft is
represented to both the houses of parliament to get approval. A draft will termed as law when
approval of both the hoses is received and together with this royal consent is taken on the law.
The process of approval of draft takes time an in mean while all the information required in
decision making is provided by UK government.
In Fisher v Bell [1961], the defendant had a flick knife displayed in his shop window
with a price tag on it. Statute made it a criminal offence to “offer” such flick knives for sale. His
conviction was quashed as goods on display in shop are not “offers” in the technical sense but an
invitation to treat. In this case divisional court held their was no offence because their was no
“offer for sale”. Display of the knife is an invitation to public to buy it. This case law set as
benchmark as inviting general public for sale of some offensive elements is not termed illegal
(Fisher v Bell, 1961).
M1 Effectiveness of the legal system
Every country adopt legal system as it helps in providing corrective decisions on various matters.
Laws are created and implemented by two main sources parliament and judicial that plays major
role in maintaining stability in the country. Rules and regulation that governs the public are
established in parliament while hearing of cases according to their nature are done in magistrate
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and crown courts in UK. Legal system is needed to guide the public about what is right and
wrong and maintains code of conduct in the society. Effectiveness of the system can be seen as
as fact that it helps in bringing change in the society.
P3 Impact of company, employment and contract law on businesses
When business organisations deals with different resources available around then it leads
to involvement of different unrelated individuals and organisations in the business. This leads to
implementations of various other laws like contract, company and employment law in the
business (Jondle, Ardichvili and Mitchell, 2014). Business entities needs to follow all the rules
and regulations that are implemented on the organisation while performing business activity. To
avoid any legal compliances in the business different laws are followed as-
Company law: Businesses that are established as company are governed as per company
law. This law possess all the rules and regulations that are imposed on business from the process
of its establishment to its winding up. All the companies are incorporated as per company law
and management, funding, appointment of directors, auditors all are done in the manner specified
in the company law. An object of business needs to be legal to be established as company. For
example- business of the company brings to end by following the process of winding up as per
company law.
Employment law: Human resource in the company are governed as per employee law.
Business perform its activities with the help of human resource who is working towards
achievement of business objective. To manage a healthy relationship between employees and
business employment law plays important role. All the policies regarding minimum wage
payments, maximum working hours and unethical dismissal of employee all are governed as per
this law. For example- a company is not allowed to terminate employees without serving notice
is not acceptable as per company law (Wilson and Thomas, 2012).
Contract law: Business activities that are performed to achieve business objective
requires various contract to be entered to involve in transactions. Contract law helps businesses
to secure transactions entered in the competitive world who is highly fluctuating. Contract make
it binding for both the parties involved in the contract and brings certainty in the transactions.
For example- entering into a contract to buy as specific quantity at pre determined price make it
compulsory to buy that product and cost of production can be pre determined to control cost.
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M2 Difference between legislation, regulations and standards
Legislation is concerned with making laws for the country, industry or community. In
countries laws are passed by the government body called parliament. Initially bill is made which
further enforced as law. Where legislation act as driver that guides the people while regulators
are those that ensures laws are being followed. Various regulatory agencies operating in UK has
the authority that maintain that the rules are being followed. Standards on the other hand is
related to guidelines provided by the government with respect to the various activities which
directs the general public for the purpose of maintaining law and order (Bühlmann, David and
Mach, 2013).
D1 Critical evaluation of the legal system and law
Legal system in UK consist of house of common and house of lords which are involve in
creation and passing of laws in the country. Judiciary ensures regulation of people and is separate
from parliament. Supreme court is the superior body that handles which makes judgements on
criminal and civil cases. There are three main components of United kingdom government
legislative. Executive and judicial authority.
P4 Types of business organisations formed legally
Business organization are the legal structure under which owners operates their business.
Sole trader, partnership,Franchising and companies are types of business entities therefore taking
decisions about selection of most appropriate one from various alternatives is very difficult.
Detailed analysis of different business organisation is discussed below:
Sole traders- This is the most common type of business organisation where single
individual manages the operations of business. These are generally adopted by small companies
due to it's simple structure as there is in no compulsion for the registration. Profits are solely
enjoyed by the owner (Zur Muehlen and Recker, 2013).
Partnerships- Under this business entity two or more than that people come together to
perform business and agreed to share profits and losses on equal terms. An agreement is signed
which states ways to resolve disputes, along with based on which condition addition and removal
of partners will be done.
Companies- This sort of business organisation are run and managed as per the guidance
of directors and senior mangers and ownership lies in the hands of shareholders who puts funds
into the business of company by purchasing shares hence these are known separate legal entity.
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Franchising- when ides are sold to other companies for the purpose of carrying out
business by issuing a license this situation is known as franchising. Franchisor is the owner who
who gives the permission while franchisee is the one that involves in the operation and
management process and expansion of business.
M3 Advantages and disadvantages of formation of different types of business organisations
Advantages of Sole trader:
 Quick Decision making- This is one the advantages of sole proprietorship as authority
of taking decisions is in the hands of one person leads to quick way of decision making.
Where there are more than one person involve in the business asking for opinions on
matters and then taking causes delay in decisions making process.
 Profits are shared- Another benefits of this system is concerned with profit sharing. Due
to the non existence of others, owners does not need to share them and enjoys whole
profits on their own (Ward, 2016).
Disadvantages
 Unlimited liability- Owners suffers from unlimited legal liability which means in case
of debts they are solely liable to them.
 Limited capital- Due to the lack of other sources this system suffers from lack of
capital.
Partnership
Advantages
 More capital- It offers more capital unlike sole proprietorship as two or more than bring
funds individually.
 Losses are shared- partners agree to share profits and losses individually this helps in
decreasing the burden on one person.
Disadvantages
 Chances of conflicts- There can be difference of opinions which can cause conflicts
between partners. This can at as roadblock in the efficiency of management.
 Sharing of profits- under partnership profits has to be shared irrespective of the amount
of capital and brought efforts of person.
Companies
Advantages
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 Limited liability- Shareholders liability is limited and they are not liable for the debts of
the company.
 Large capital- It much easier to raise large amount of capital through shares (Jackson,
2013).
Disadvantages
 Complex- Due to the involvement of large number of people and various divisions
creates complexity
 Expensive- It is very costly to build company as it requires large sum of money
Franchising-
Advantages
 Establish market- As franchising are done by famous and establish brand therefore there
is not much need to test goods and products in the market
 Financial support- Resources and equipment needed to start business is provided by
franchisor.
Disadvantages
 Costly- Initial cost may not be high but later franchisee has to purchase products from
franchisor (Hamilton, 2013).
 Profits are shared- All the profits are shared and approval from franchisor is important.
P5 Management and funding of business organisations
There are many sources from which the business organisation each of them comes with
certain advantages and disadvantages. Sources through which funds can be raised based on the
structure of organisation are discussed below:-
Sole proprietorship- As there is only single individual that owns and manges the day to
day operations of business, decisions are taken more quickly. The availability of funds are
limited in this type of organisation. Funds are being raised through the personal savings of
individual or by taking loans from friends, family and financial institutions.
Partnership- These are owned and managed by the people who agreed to be the partners
and brings capital individually by signing a contract. Operations of business are handled by them
as per their mutual understanding. Though funds raising is difficult in partnership due to limited
availability but sales of equity can be considered as an option to raise capital.
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Companies- Responsibilities of taking decisions managing the working of company lies
in the hands of senior officers and directors. Funds are raised through issuing shares to public
and financial institutions. Therefore it has the benefits of availing large sum of money and unlike
partnership and sole proprietorship members of company can protect their personal as well as
business assets separately (Jackson, 2012).
Franchising- Generally renowned businesses like McDonald's involve in franchising
business because of this aspect they are able to put large amount of money into this. Funds can
further be raised from International franchise association council. Operations of this type of
organisation is handled by the franchisee management and makes profits this helps in increasing
the growth and profitability of existing brand.
D2 Evaluation of different types of business organisation's
Different type of business organisation differs on the basis of their structure. Where sole
proprietorship does not involve too many people is termed as more simple where as partnership
consist of two or more persons in the operations. An agreement is signed who agreed to become
partners that comprises of certain terms and conditions. Companies on the other hand is separate
legal entity that owned by shareholders who face losses as per their amount they have invested.
Franchising is about allowing someone else to do business by issuing licence for the purpose of
business expansion (Hawkins, 2012).
TASK 2
P6 Legal solutions for resolving business disputes
CASE 1: Gordon who works as salesman in the Orange Computers Ltd entered into
employment contract of receiving £10000 as salary and £11000 as commission on sales. In 2015,
due to competition market god adversely affected and manager of the company ask Gordon to
forgo his salary for 2015, 2016 and 2017. Gordon accepted the variation in the contract and in
2016 when companies financial condition is improving Gordon feels that he should be able to
receive his wages for 2017. He also wishes to claim for wages from 2015 and 2016.
In the given case scenario it is seen that Gordon and company got entered into a contract
for employment as contract is merrily acceptance of an offer. As per contract law breach in the
contract leads to penalties and both the parties needs to perform the tasks mentioned in the
contract. A revision in the contract is acceptable when parties to the contract are ready to make
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changes without any manipulation. As after convincing of manager Gordon accepted the revised
proposal. When the proposal of receiving only commission for work performed is accepted then
employee in the contract can not claim for wages when company become profitable.
As per employment law this will not be acceptable on the part of the company for not to
pay any wages to employees who was hired with the promise to provide wages and contract was
entered. As per employment law minimum wages needs to be paid to employees to avoid any
legal compliances (Rutledge, 2014).
To resolve the dispute involved between employees and organisation appeal is filled to
the tribunal who resolves the disputes about matters concerning legal rights and obligations. A
appeal is made to the tribunal to resolve the issue by hearing both the parties involved in the
issue. When issue related to employees is involved the can be resolved through union also as
they are formed to save employees from any misconduct and taking side of them to resolve any
issue by confronting business organisation.
CASE 2: Janet decided to call Virgin Media to arrange the purchase and installation of
the internet package costing £35. The engineer arranged and installed the internet but could no6t
find the telephone point and suggested to call his supervisor and come back. He did not returned
at all and after making few calls and e-mails it was fixed after 3 weeks. Charges of packages that
includes rent is charged in full.
As the contract of providing services involves installation internet is provided with
package of installation and rental charged. In the end when bill is charged in full then it will be
termed as breach of contract on part of the company. As services are not provided on time and
top of it rent is charged in full. It is advisable as per contract law for Virgin media to charge
installation charges in full and rent from the point when services are provided in complete
manner. As Janet is correct at her place for recommending charges after three weeks.
This dispute will be resolved through advise of citizens as right of general public is
getting manipulated. A application can be made in the court of law against huge business
organisations who are not serving fairly to general public. By considering the issue involved
legal authority will give advise to resolve the issue in a particular manner.
CASE 3: Blackhorse Limited is a security company providing security services to
businesses. From the four major clients of the company largest failed leaving Blackhorse limited
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in bed debts of £100000. This caused reduction in the cash flow and leads to stretching the due
dates. Creditors issued a winding up petition for non payment of the amount due.
As per company law when creditors are not paid the amount due on time a notice is
served on the name of the company. When no satisfactory reply is received by creditors then a
petition can be filled in the court of law for compulsory winding of the company. A winding up
petition is an application made by creditors in the court for not receiving the amount due after
period fall due to pay the amount (Svantesson, 2016).
Process of winding up involves requirement of various rules and regulations that needs to
be followed in this regards. To resolve this dispute an appeal can be made to dispute resolution
panel. This process of resolving a dispute is highly recommended as it shorter the process of
proceedings and provides both the parties fair chance to keep their point of view. A panel who is
skilled and experienced is appointed to resolve disputes that are filled in the alternative dispute
resolution.
M4 Different sources of legal advise
There are different sources that provides legal advices on variety of subjects. It is vital to follow
the advices given by these sources as it helps in providing appropriate direction. Legislation is
based on the rules made by the parliament and common law through which helps in providing
advices based on the previous judgements. Rights of public are protected with the help of
suggestions made by European union law.
D3 Effectiveness of legal solutions, legal advise and support for dispute resolution
When business activities are performed in the organisation on continuous basis then it
leads to rise in disputes in various parties involved in performing various activities. To work
effectively disputes needs to be resolved on time and these disputes must be solved in a manner
that no party gets suffered. When a solution which is legally right and bring after considering all
the aspects involved then results of the decision is right. When legal solution is provided to any
dispute then it will be binding on both the parties involved in the dispute (Cohen and Kietzmann,
2014).
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CONCLUSION
From the above project report it has been concluded that a effective legal system is
essential to run economy of a country in effective manner. Laws, rules and regulations are
required to establish effective legal system in the country. Their are various sources of law
available in UK and that needs to be evaluated on the basis of their relevance and then
considered for making any law. Business is considered as core of financial system and needs a
particular law to reduce any breach and generate effectiveness in the businesses. Government of
the country plays in formation and implementation of the legal system in the country. Their are
number of forms in which business organisation can be established and most suitable as per
management and funding will be selected. Various issue involved in the business related to
contract, employment and company law will be resolved on with alternative dispute resolution
methods.
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Online
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<http://www.e-lawresources.co.uk/Fisher-v-Bell.php>
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<http://consumer.newbeginningsresources.co.uk/legal/the-english-legal-system/sources-
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