Business Law Report: UK Law Sources, Business Impact, and Disputes

This report provides a comprehensive overview of UK business law, beginning with an introduction to the fundamental principles and the role of law in governing businesses. It delves into various sources of law, including parliamentary legislation, European law, and common law, outlining their significance and application within the UK legal framework. The report further examines the impact of company, employment, and contract law on business operations, highlighting the importance of compliance and the consequences of non-adherence. It also explores different types of legally formed businesses, such as sole proprietorships, partnerships, and limited liability companies, discussing their characteristics, advantages, and disadvantages, as well as the process of business registration in the UK. Finally, the report addresses legal solutions for resolving business disputes, providing insights into the available options and their implications. The report is designed to provide students with a clear understanding of the key legal concepts and their practical implications for businesses operating in the UK.

Business law
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Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1 Different sources of law.........................................................................................................3
P2 Role of government in law making........................................................................................4
LO 2.................................................................................................................................................5
P3 How company, employment and contract law impact on business........................................5
LO 3.................................................................................................................................................5
P4 Different types of business legally formed.............................................................................5
P5 How organisation is managed and fund.................................................................................8
LO 4.................................................................................................................................................9
P6 Legal solution for resolving dispute.......................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Laws and legislation is main pillar of a country. This is because it consists of rules and
regulations which need to be followed by people. Moreover, laws are formed by government and
it varies from nation to nation (Aldahmash 2021). Besides, it provide a structure by which
government and business runs. The laws need to be adhere by business as well. On basis of law
policies are formed and implied. The law ensure that business work in ethical and fair way. The
policies frame act as basis of structure of what procedure to be followed. Without law it is
difficult to run country and business. Courts, government, company, etc. all are governed
through law.
In report it will be discussed about sources of law and role of government in it. Also, it will
mentioned about how law impact on business and various types of businesses and how they are
funded and managed. At last legal solutions will be given for solving dispute.
LO 1
P1 Different sources of law
Basically, legislation means forming of laws and regulation. The laws govern entire nation
and it shows how government is able to monitor. In every nation there is a proper legal structure
which is formed. It provide a framework of how law is formed and applied. Similarly, in UK as
well there are different sources of law which is mentioned as below
Parliament- In UK there are two houses in parliament that is House of Commons and House of
Lords. In both these bills are passed to make it a law. Also, all government decisions are made
on behalf of Parliament (Begum 2020). The bills are examined and discussed in it. Usually, it is
referred as constitutional law.
European law- this law consists of law formed by European Union. The law is applicable to all
members of EU. The law over rule national law if there is conflict between EU and national law.
It is formed by European Union which is enforced in all nations. But it differ from law of nation
and its constitution. There is no relation of this law with UK legislation.
Common law- UK is divided into 3 that is Wales, Scotland and Ireland. The common law
include judge and court system. There are 2 sources of law that is primary and secondary. In
primary it include legislation and case law and in secondary it include legal expert, court
decision, etc. (Poesen 2017)
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Apart from it, there are some other laws as well which is source such as case, civil and
criminal law. It is having various sections and regulation mentioned in it by which it is applied in
UK. They are applied to different state and for criminal activity as well. Thus, these are some
sources of law in UK which form base or foundation of legislation. This constitute framing of
law and implying it on entire nation.
P2 Role of government in law making
In every country government is responsible for forming of laws and regulations. Also, they
regulate and govern those laws to be implemented in nation. It requires government to take
relevant and effective decision in law making. The government is having power to make law and
implement it. They find out that what changes is required in country and then accordingly they
make laws. The entire legal system is controlled and governed by government in effective way.
Usually, federal, state and local government are responsible for law making and enforcing.
Besides, there are reforms made in laws which is also done by government. Then, it is implied in
proper way. Local government play crucial role in law implementation. In similar way, in UK
government role is discussed as
Legislative- Here, it contain bills that is need to be passed in parliament to make it a law. The
role of government is to pass bill in parliament (Cejnar and Duke 2018). So, it is responsibility
of federal government.
Executive- in this government role is to implement and adopt law which is being passed by
parliament. They frame policy on basis of law. It comprise of PM, government agency,
department, etc.
Judiciary- it contains judge, magistrate, tribunals, etc. in court. Their role is to enforce law which
is formed. They are representative of government.
In UK statutory law is act of parliament known as bill which is passed by both houses.
This then becomes an act and is applied by court. This law is applied to business and people. The
statutes prescribed is by government. The judge takes decision in individual cases by considering
statute law. The statutory law is written and is directly applied in particular case.
Common law is defined as rules that is made by judge as they issue ruiling on case. This
refers to behaviour, customer, etc. of people of UK. The common law is applied in court by
judge and is developed by following principle of binding precedent. In this decisions of court is
also considered in it (Gillies 2020).
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Besides that, parliamentary committee prepare draft to be presented as bill in parliament.
The government role is to pass that bill so that it can become a law. Thus, accordingly changes
are made into legislation system.
LO 2
P3 How company, employment and contract law impact on business
There are several laws which are to be adhered by companies. The law ensure that
organisation work in ethical and legal way. Generally, business laws are formed by government
and implied as well. If there is any change in law then it also highly impact on overall business.
Besides, violating of law result in taking legal action (Aldohni 2017). Thus, impact of law is
defined as :
Company law- It is a law which has to be followed by all companies in UK. They have to
register themselves under this act. It was formed in 2006 that set accountability of business
towards its stakeholders. In addition, act protect right of staff working in company. Furthermore,
director burden is reduced due to this act. It states that specific person is responsible for his or
her duty. It restricts director to lead confidential info of business. Thus, if business do not follow
it then they can not operate in UK. The law determine roles and responsibilities of business. The
law also govern and control company operations in UK. However, any change made into
company law impact business. It is because it changes way of business operations.
Contract law- This law is contract between two parties for exchange of services. It consists of
terms and conditions which is to be adhered by both parties. Any violation of it affect on
business (Khodayarinejad 2020). It impact on business as any change in law results in impacting
on duties and roles of parties. There are new terms and conditions added into it or changed. Thus,
business have to adhere and follow that law in contracting with parties.
Employment Law- this act establish relationship between employer and employee. It consists of
several duties and responsibilities of both of them towards each other. Moreover, act includes
accountability of employer towards employee in context of working hours, salary, etc. thus, it
protect rights of staff. It impact business as they have to ensure employees rights are protected.
Along with it, if there is any change in employment law than business also have to change their
policies. There are changes done in employment contract as well. So, overall terms and
conditions are modified in it.
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LO 3
P4 Different types of business legally formed
Business refers to legal entity that can operate in a country. They provide various types of
products and services n market. The size and type of business differ from each other. They can
be large or small depending on mission and vision. A business is required to get registered as per
law. This state that they are legal entity (van Schadewijk 2017). Hence, various types of
companies are
Sole proprietorship- this business is owned by single owner who is responsible for all profit and
loss. Also, owner takes all decisions regarding business. The legal set up of business is easy as it
requires few documents to be formed in it. Moreover, owner is having unlimited liability and
cost of starting business is low as compared to other.
Pros
 The owner does not share profit with anyone.
 The decision are quickly taken without wasting time.
 Tax imposed on profit is only one time
Cons
 Loss is to bear by owner himself
 Lack of experience may led to failure of business
 The person is not able to manage business in effective way.
Partnership- This business is formed by 2 or more than 2 persons. In this a partnership deed or
agreement is signed between all partners who are involved in it (Machin and Wilkinson 2020).
Thus, here partnership act is also applied in it. The agreement consists of terms and conditions to
be followed along with profit sharing ratio, liability of partner, etc. However, here liability is
limited of partner.
Pros
 There is huge capital brought by all partners
 Loss is bear by all partner as per their investment made
 Terms and conditions are clearly mentioned into agreement
Cons
 There may occur dispute among partners that can impact on overall business operations.
It can also led to delay in decision making.
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 Liability of each partner is unlimited in it.
Limited liability partnership- it is a type of business in which there is both partnership and
company features in it. The owner is not incorporated as the liability is limited in partnership.
This means that all partner are having limited liability. The partner is not responsible or liable for
another partner liability (Mallor and Barnes 2020).
Pros
 The tax regime is chosen as per company structure and partnership
 There is no ownership restrictions in it
 There are few corporate formalities to be filled in it.
Cons
 There are limited investment options in it.
 It require high maintenance cost and fees.
Private limited company- the business where a group of people who have some common
objective start this. There is a different legal existence of it. The company is registered under
companies act. Here, liability is limited and BOD is elected by shareholders. The company do
not dissolve when there is change in ownership.
Pros
 Tax is to be paid from profits so it is not burden on everyone.
 It helps in building a reputed position in market as company is traded.
Cons
 Profit shared is less as tax and dividend has to be paid from it.
 Failure of legal duty may led to creating a negative image of company in market.
Process of registration- There is a specific process which is followed by business to get
registered in UK (Sanseverino 2020). The process is necessary to follow so that business
becomes legal entity. Thus, it is defined as
Check name of business online- the name of business is check into database.
Prepare agreement and fill application form- It is a step in which all business info is filled
such as name, address, area of operation, structure, business type, etc. this is all done by filling
out application form.
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Complete registration document at business registration agency – Here, all documents are
completed and then submitted to officer at registration agency. So, here processing fee is also
taken in it.
Contact revenue and custom and register for tax – in this stage the business get register for
filling of tax in UK. The company needs to register online for taxation with the activation code
Registration of obligation insurance for owner – It requires owner to maintain legal
obligation insurance of business (Barker and Pina-Sánchez 2019).
P5 How organisation is managed and fund
It requires huge capital and cash in order to run and manage business. Without funds
business is not able to run for long term (Spotorno 2018). The capital is used in purchasing of
land, asset, resources, etc. So, it need to find out what is overall requirement of fund. However,
there are various sources by which funds can be acquired. But it depends on business needs and
other factors. The factors are considered as well in acquiring of funds. So, the sources are as
follows
Bank loan – the common source of funds where business can easily get required amount. Banks
provide loan to business for long term and charge interest rate which is low as compared to other
sources. It requires business to deposit security against loan taken. The procedure is time
consuming.
Financial institutions- they are companies and institutes which provide loan to organisation.
Here, interest rate charged is high but procedure is fast and quick as compared to other sources.
In this business is required to deposit security in terms of amount taken. It is also popular way in
order to manage and fund business.
Investors- In this funds acquired is easy as investors want high return on investment from it
(Aldahmash 2021). However, they can also demand to take stake in company as per terms and
conditions signed within agreement. There is no security need to be deposited in it.
Personal asset- At last this option is also feasible to manage business. The personal saving can
be used to fund business. But the amount required is huge and it can not be fulfilled through it. In
this personal asset can be either land, building, machines, furniture, etc. The fund acquired is not
sufficient to manage business.
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Friend and relative- This is also a source of managing business. Here, funds are obtained or
acquired through friends or relatives by which it becomes easy to manage it. But in this as well
amount obtain is less and is not sufficient to manage overall business.
Hence, these all are some sources by which business can be funded. It depends on their
need that what source is suitable and how much fund can be acquired through it (Machin and
Wilkinson 2020). There is need to analyse each source so that business funds requirement is met.
LO 4
P6 Legal solution for resolving dispute
In business there may occur different types of conflicts and disputes which can impact on
overall operations and its growth. So, it is necessary to solve those disputes to ensure smooth
running of business. The dispute may occur between employee and employer, customer and
business, etc. the dispute create a negative impact on company image and reputation if not
solved. There are various legal solutions by which dispute can be easily solved. It is explained as
below
Negotiation- As name shows in this dispute is solved by negotiating between parties. The views
and opinion of both parties are listened and then difference is solved by finding out solution
which is agreed by both (Begum 2020). The dispute is solved by reaching an agreement which
include needs of both parties. It is an outside court method of solving dispute. The focus is on
maintaining relationship between businesses by soling dispute through mutual agreement. For
example- negotiation with third party over terms of sale.
Mediation- With help of court or arbitrator party may decide to solve dispute through mediator.
He or she listen to both party thoughts and do not make judgement as well by doing biasness. In
this dispute is solve by appointing a mediator who listen to both parties needs. The mediator do
not do biasness and take decision which is in favour of both parties and then reach an agreement.
This process is followed when negotiation fails (Gillies 2020). But if this process fails then
parties move to court in case of solving dispute. For instance – dividing up of business asset
between owners.
Arbitration – the dispute is solved out of court in which arbitrator is responsible for controlling
of overall process and solving dispute in effective way. This is last way of solving dispute. The
solution is based on law. Here, arbitrator of both parties comes in court and then agreement is
done. without agreement dispute can not be referred to arbitration. However, in this decisions are
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enforced outside European Union. The agreement consists of how many arbitrator is there,
language, place, etc. For example- payment of remedy in business (Cejnar and Duke 2018).
So, these are some ways of solving dispute between parties. It entirely depend on
business that what type of method they choose to solve dispute and reach an agreement. In each
legal solution the process varies and dispute is solved in different way by reaching agreement.
CONCLUSION
Hereby, it is summarised that legislation means forming of laws and regulation. It provide a
framework of how law is formed and applied. In UK law comprises of Parliament, European law
and Common law. House of Commons and Lords are two house in parliament in UK. The
government play vital role in law making. There is a great negative impact of employment,
contract and company law on business. Any change in these affect business operations.
Furthermore, types of business are sole proprietorship, Limited liability partnership, Private
limited company, etc. Besides, sources of funds are bank loan, investors, personal income, etc.
The legal solutions for solving dispute are Mediation, Arbitration , etc.
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REFERENCES
Books and journals
Aldahmash, A., 2021. Powers, duties and liabilities of company directors: A comparative study
of the law and practice in the UK and Saudi Arabia (Doctoral dissertation, Lancaster
University).
Aldohni, A.K., 2017. The UK new regulatory framework of high-cost short-term credit: Is there
a shift towards a more “law and society” based approach?. Journal of Consumer
Policy, 40(3), pp.321-345.
Barker, A. and Pina-Sánchez, J., 2019. Charitable Giving to Parks and Green Spaces: Public and
business opinion in Leeds, UK.
Begum, A., 2020. Corruption in business: A critical appraisal of the Australian regulatory regime
in the light of the UK Bribery Act 2010.
Cejnar, L. and Duke, A., 2018. Competition and fair trading practices in the higher education
sector: A comparative review of the position in the UK and Australia. ECLR: European
Competition Law Review, pp.31-36.
Gillies, L., 2020. Appropriate adjustments post Brexit: residual jurisdiction and forum non
conveniens in UK courts. Journal of Business Law, 2020(3), pp.161-183.
Khodayarinejad, A., 2020. The Jurisdiction of the UK Courts to Investigate the Crime of
Commercial Bribery. Journal of Legal Research, 19(43), pp.157-179.
Machin, L.L. and Wilkinson, M., 2020, July. Making the (Business) Case for Clinical Ethics
Support in the UK. In Hec Forum (pp. 1-21). Springer Netherlands.
Mallor, J. and Barnes, A.J., 2020. Business Law The Ethical, Global, and E-Commerce
Environment.
Poesen, M., 2017, November. EU-UK Civil Judicial Cooperation after Brexit: Challenges and
Prospects for Private International Law. In The paper was presented on the LERU Brexit
Seminar in Leuven on (Vol. 18).
Sanseverino, A., 2020. The Impact of Anti-Corruption Laws: Evidence from the UK Bribery
Act's Extraterritorial Reach.
Spotorno, A.R., 2018. Piercing the Corporate Veil in the UK: The Never-Ending Mess. Business
Law Review, 39(4).
van Schadewijk, M.A.N., 2017. Pushing the Boundaries between Competition and Insolvency
Law. Pre-packing in the UK.
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