Business Law Report: UK Business Law and Legal Framework

This report provides a comprehensive overview of UK business law, examining the nature of the legal system, including legislation, common law, and the role of government. It delves into the potential impact of law on businesses, specifically focusing on contract and employment law, and the distinctions between legislation, regulations, and standards. The report also explores the formation of different types of business organizations, their legal structures, and funding processes. Furthermore, it offers legal advice and recommendations to assist companies in managing their legal positions and navigating the complexities of the UK legal framework. The report emphasizes the importance of understanding the legal system for business operations and provides valuable insights for businesses operating within the UK.

Business Law

Table of contents.
Table of Contents
INTRODUCTION...........................................................................................................................1
LO1 Explain the nature of legal system...........................................................................................1
LO2 The potential impact of the law on a business.........................................................................4
LO3 The formation of different types of business organizations....................................................5
LO4 The legal solutions..................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business law is related with rules, regulations and provisions which has to be followed
by every existing and upcoming new business firms for carrying on commercial as well as trade
business activities. It regulates all the contracts, agreements and bonds as undertaken by any
business corporate. Also, it deals with practices of hiring, manufacturing and selling of any
consumer goods with the purpose of making profit and growth. This report is related with UK
Law and its applicability uses. It will explain different sources of law along with government
role in making law. Also, it will define the manner in which statutory and common law is
applied in the justice courts. Further, it will emphasize on the impact which is created by all the
company, employment and contract law on business. Explanation related to different business
organizations types and its legally formation, management and funding process will be there. At
last, it will streamline recommendation in the form of legal advice related to case study for
assisting different companies in managing their legal status and position.
LO1 Explain the nature of legal system
A legal system refers to approach which is systemically used to resolve disagreement and
disputes. It is procedure or process which elaborates the right and responsibility by giving norms
of civil law, common law and religious law. Conflicts between communities and social group is
been protected by laws of legal system(Melé and Schlag, 2015). There are variety of law which
is most widespread part of the legal system such as legislation law, common law, parliament act
and many more.
Different sources of laws
 The legislation law - law which is been formulated by legislature is known as
legislation as it plays an important role in formulation of law. It is also own as statutory
law. Unless stated, this law is applicable in all the parts of UK. Parliament is the
supreme legal authority in UK as there is no legal written constitution. This law has
various power which includes infringement of law which is existing or formation of any
new law. This the important source of law formation as there in no forbiddingness while
formulating the law of country.
 Common law- it refers to law which gives higher authority to the representatives of
lower division. In this formulation of law the lower division representatives are given

high level of authority to save there rights and duties. It is the part of English law which
had its derivation from customs and judicial predecessor. Appellate courts used to make
decision as in the major sources of law in UK adopted by Wales and England. It is more
simply to understand that legislation can change case law but case law cannot change
legislation.
 Parliament Act- In this act of parliament the formation of new law or the changes in the
existing law is done. The changes in law will pass through all the house that is houses of
common, houses of lords and royal monarch. The approval from all the authorities the
bill is enacted into law(Melé and Schlag, 2015). It is mandatory source of formulation of
any bill into law by government ministries. This veto give to house of lords have created
the struggle between the two hushes and help up to national finances.
 Conventions and Treaties-as been the member of European state council, the UK is one
of the major signatories of human rights European Convention. The Human Right Act,
1998 is been enacted by UK which allows all the courts of UK to protect rights which are
stated in European convention. United kingdom is part of united nation, this the country
have to enact to all convention and treaties that has been formed or signed by states on
united nation. Thus, the treaties and convention is an important part for the formation of
any law in country.
 European law- European law states that the law which only operates in states of
European Union and it is operated in UK by the members of European Union. While the
formulation of laws in UK, the law of European union is taken into consideration. The
UK law can only be formulated with help of European union law(Samuel, 2016.). So the
European union law is the major and important source for formation of UK law.
Role of government in law making and common and statutory law are applied in court
justice.
 Identification of need-the ministry of authorities will try to identify the need by the
analysation of legal system of country. The need is identified then the evaluation of
country will take place according to need. The evaluation of country will be done by the
ministries of authority ion the basis of criminal rates, false practices or any misconduct
which will help them to have string basis for formulation of law. Various comparison

and analysis will be done my authorities of ministry in the respect of legal system in
country. After the proper comparison the need identification will change into making of
new law or changes in existing one.
 Bill formation- the ministry of authority plays an important role in analysis and
comparison of legal system in country as compare to find out the identification of need.
The process of bill formation will take place after step of need identification as there
should be changed in law or formulation of new law is there. Now in further step the
authority will formulate a draft related to change or new law and move draft out for the
execution process.
 First Reading- it is just a type of formality of starting the procedure of the formulation
of bill in both houses. On the orders of government a draft is being made termed as bill.
The bill is first transferred to house of common in which nothing is done except reading.
 Second Reading- in the second reading, the government minister of houses of common
represent the bill. Various view of opposition and other parties has been heard and then
the procedure of voting will take place. Mainly the opposition party vote against the
motion as bill will move to committee stage.
 Committee Stage- there is standing committee for examination of bill after second
heading in house of common consisting 16-20 MP'S. The member of chairman's panel
will chair standing committee and only have the right to vote at time of tie. There are
new members at every time of new bill. The procedure of second reading is same of
house of lord as there is no limit and amendments the whole bill is transfer to standing
committee.
 Report Stage- After procedure of committee stage, within two weeks the examined bill
should report its decision to whole houses of common and gave them the opportunities to
add any clause or any propose amendments.
 Third Reading- the bill is reviewed for the last time at these stages it cannot have the
third hearing after being passing through the various stages. Now the bill will be move to
other house where all these procedures will be repeated and its necessary of house to
agree on amendment as due to limitation of time, otherwise bill has risk of being
lost(Schulman, Moscow and Lesser, 2017).

 The Royal Assent- This is final stage where the royal assent to the bill will be given by
queen that has completed all the stages of parliament with declaration from both house
and turned to be the new law for the country.
Hence, common law are the law which are performed for the longer period as compare to
statuary law. Common law is formulated for the lower divisional court by the higher level of
authority. The statuary law is applicable in all part of UK except to where it is stated. As statuary
law is settled down by the legislature as to define which is written or uncommon.
Effectiveness of legal system in terms of development and reforms.
There is commission is a body in every country which used to review effectiveness and
fairness of law independently. Since 1965,the law review commission has been examining the
law of Wales and England. In the year 2010, the law commission has been aim to improve the
ratio of recommendation. Some years later in year 2016 a reform program has been launched to
fulfil the aim of previous year. On other hand there are many limitations for legal system too as
it depletes its reliability as it is in non written form.
LO2 The potential impact of the law on a business
Impact of contract law and employment law on business.
Employment law -the law which refers for benefit and right of employee working in
organization. The law is related to company and their employee that is working in organization.
The law also able the employees to update themselves about the right applicability of law. This
law help in maintaining a healthier relationship between employers and employee in
company(Melé and Schlag, 2015).
In employment law there are variety of series of laws such as employment law
2002,discrimination act 1991, Minimum wages act 1998. the law will help in controlling the
activities of employees as well as management and operation of company. The company has to
work and regulate with employee as it is stated in provision of law. With the use of guideline as
stated in provision will turn out to be beneficial to both employer and employee as this lead to
smooth functioning of organization.
Contract law- a contract law refers to the law under the contract act which states that two or
more entered into contact in respect of some consideration with there willingness to perform
contract. The law has to be followed by all the parties that have entered into the contract. The

law into the act regulate the business transaction and keep an eye if the performance of contract.
The sale and purchase has to been done according to the law of contract. The company work
according to contract law as to escape for business financial uncertainness and have the
obligation to perform according as for smooth functioning. Is the company is properly
performing laws of contract at then the legal issue will be reduced. The benefit of entering into
contract act is that at the time of breach of contract there is some written consequences for any
fraud party.
Difference between legislation, regulation and standards.
For the systematic functioning of a country government, state government law has been
formed. The rules are signed by highest government official such as governor after the
successful completion of hearing in both houses. In is important to each and every person in a
country to follow the laws and legal procedure. The legal system which contain all the
employment and contract act, then parties in this act have the need to follow all the legal
procedure for smooth and proper functionality of the agreement.
Regulation are different from legislation as they are proper instruction of law
enforcement and how they have to be carried out(Ma and Marquis, 2016). Administrative laws
or rules are some other recognition of regulation. There is necessary requirement for application
in every functioning of the country as proper guidance will be given by application of
laws(Mann. and Roberts, 2015.). Regulation are the rules that can be external and internally
which address the safety the consumer protection and other factor in public interest.
Whereas standards are different from all. As the form the word it can be defined as
certain criteria or the limit to which up gradation is to be achieved is set be as standards(James,
2017.). With the help of standard there can be consistency in achievement of efficiency, quality
and efficiency. Standards are formulated in such a way that is represents the certain criteria or
the reference document with a detailed guideline. The business which have standard for there
business activity are turned out to be more efficient and effective in the quality management of
their product and business relationship.
LO3 The formation of different types of business organizations
Sole proprietorship - the business which is operated by a single owner or a individual without
having no other person as the business head is called as sole proprietorship. The single

individual is responsible for ever decision that is need to have in the business whether it is
related to investment or another decision-making. The another speciality of this business is that
the management and control of whole business is in single hand(Ma and Marquis, 2016). But on
another partner there is unlimited liability and risk to an individual which may turn to be
dangerous of business operation. So in this type of business the individual is responsible for
investment and risk bareness.
Advantages of sole proprietorship
 The control and management of operation of whole business is in single hand.
 There is no need to disclose the account of sole proprietorship in public so the secrecy
and confidentiality of business remain disclose.
Disadvantages of sole proprietorship
 The owner of sole proprietorship have to face the risk of unlimited liability as the
individual is responsible for operating all the management and operation of business.
 The individual has the limits' ability in decision-making performance as there the higher
rate of risk in this type of business.
 The source of investment is also low as the individual has to invest alone in the business.
The investment can be done in business through friends ,savings, family or peers.
Partnership firm -
The firm which is established with collaboration of two or more individual sharing the ratio of
profit or losses in the respect of there investment as capital into the business(Fici, 2016.). The
members in partnership acmes into the business with pooling of resources and collaborative
decision-making.
There should be minimum 2 members and maximum 20 can enter into partnership. They can
enter partnership so the basis of certain terms and condition with respect of there profit and loss
sharing ratio and the capital investment along with the ability of decision-making process.
Advantages of partnership firm
 Due to having member more than one, there is greater chance of getting more innovative
ideas for successful completion of business activity.
 The sole proprietorship has to faces the higher lever of tax due to its individuality
whereas the partnership faces lower taxes as having more members in sharing.

Disadvantages of partnership firm
 It is not important that all the members who enterers in business always remain same
for longer period, they are changed.
 There are unlimited liability in for the partners for the business.
Limited company- the company which are owned by the government are refers as the public
company or limited company. In this type of company the funds are raised by public by issue of
bonds and equity share. The company used to share its information of the balance sheet to the
public so that the investor take more and more interest in development of company(Cassel,
2016). After becoming the investor in the firm there also became dividend holder for company.
This contribution of investor help in development of company and raising capital.
The company has to be registered under the companies act 2013 and director should
follow the rules and regulation along with duties stated in companies act 2013 for the efficient
and smooth functioning of organisation. The investors of the company became liable for
management of company along with that they became the part of decision-making . A company
has to prepare there memorandum of association and article of association.
Advantages of limited company
 There are many opportunities for the growth and development of company as it operates
at larger scale.
 As company use to operates at the larger scale there are maximum chances to access
better capital and investment as comparative to sole proprietorship and partnership.
Disadvantages of limited company
 according to case of Salomon vs Salomon company, the company is wholly liable to the
team of director activity and decision-making process.
 There is the major issue in controlling and managing the business operation as the
company has the outside investor.
 As the critical evaluation is done of the types of formation of business organization, the
most preferable business is limited company as there are large number of investors along
with the minimal percentage of risk.

Management and control of business id done is a different way in different type of organization.
There is high number of difference between the requirement of the company. There is different
level of a different amount of investment and the different amount of management. In the firm
of sole proprietorship the management has only a single individual who is liable to take all the
decision in the company. He is will be the management in charge and all the risk is beard by
him. The management will be decided by him only to take the decision. The individual will only
be the one who have to bring investment for development of business(Beatty, Samuelson and
Abril, 2018) For the investment purpose the amount will be contributed from family, friends and
peers. The owner has the unlimited liability towards the business. On the other hand in the case
of partnership the firm is managed by the number of partners in business. the partner have to
register the business under the act 1890 partnership act. The profit and loss of the company will
be shared by the member of the business in the term of there investment in capital. The
management of business is also done by members along with the decision-making. There are
labile for the goodwill of the company and have to maintain the account at the time of admission
or retirement of partner.
Whereas in the limited firm public is a investor as well as the partner of the firm that have to
take the decision in the completion of the management decision in the organization. Thee will
help the company have the lot of investment opportunities for the development of the company.
The company has to share dived end to its shareholders the part of the profit.
LO4 The legal solutions
Following are the legal solutions which can help both the cases in making appropriate
conclusion:
CASE 1 – Champion Ltd
Summary of case – After receiving cash payment by a premier league club to move from its site
in North London for the development of a new stadium, Champion Ltd started experiencing
financial problems due to decline in its customers base. Also, it has made default in making loan
repayment to bank and creditors against which creditors threaten company to apply to courts for
‘winding up petition’.
Legal Advice – Winding up is defined as a proceeding under which any company can dissolve
its business activities including assets. On realization of such company asset, the amount

realized is used for making payment of debt amount which the company has owned. In above
mention case, as the company is making default in making loan repayment to both the bank and
its creditors, it has to adopt for winding up as per the order of Court (Sharma, 2015).
Compulsory winding up by the court can be done in case of Champion Ltd. In this type,
company is directed and advised to be wound up by the court order because of default made by
the company in respect of default of non-payment of loan amount taken from bank as well as
from the creditor. The petition for such winding up can be made by creditors, company itself,
Registrar, any person authorized by central government and by any contributory.
Procedure to be followed by Champion Ltd. Are as follows:
 Appointment of Liquidator – It is the duty of court to ensures that person selected as
Official Liquidator is qualified to be appointed to such post as liquidator is having
powers to realize Champion's assets, pay off all the debts and making distribution of any
surplus remaining as per the Court control.
 On appointment of liquidator, directors power cease unless as sanctioned by the
liquidator or the Court. It is required by Champion Ltd to carry on its business operations
only in case it is beneficial winding up of the Company, otherwise must ceases to
operate.
 7 days after getting appointed, a copy of compulsory winding up will be sent to Registrar
who will further serve a notice of being wound up to Champion Ltd (Kumar, 2017).
 On realization of assets by liquidator, he will apply to the court for making appointment
of Commissioner of the Court so as to examine accounts and for distributing funds
realized. Creditors meeting will be arranged for making cross examination and
verification of all the financial statement along with creditor's preferences and claims
thereby fixing date on which distribution of assets of company will be done. In this any
dispute in context of claim is resolved by Court.
CASE 2 – Amber Ltd
Summary of case – Mr. Anderson, CEO of Amber Ltd. Accepted the offer of competitor
company named Beta Ltd without serving a notice of 12 months for terminating the contract. A
notice has been served by Mr. Anderson for a short period which results in breach of contract
and also breach of duties of good faith, fidelity, trust and confidence for 12 months.

Legal Advice – In this case study, Mr Anderson has breached its own duties as well as contract
act for which he can be sued. By revealing confidential information
to competitor company, it will result in breach of trust and confidence on part of Mr. Anderson
as he is having high access to this information part of the business which can become strength
for other companies (Awdry and Newton, 2019). Also, Mr Anderson is not completing the
terminating condition of employment contract which has been decided in between them I.e.
serving for 12 months after giving notice in the benefits of company.
Thus, breach of duty of good faith has been made. It is the duty of all the directors as
well as key personnel to make decisions by acting in conscious and beneficial manner for
making benefit to both the company and its employees. No compliance has been made by Mr.
Anderson related to making sound decision-making in favour of Amber Ltd instead without
completing a period of 12 months, he joined as CEO in Beta Ltd. As per the duty of fidelity, it is
required on part of employee to perform or act in the best interest of business or company in
which it is working. Amber Ltd can make case on Mr. Anderson related to breach of
employment terms and condition as mentioned in the contract act of which he is having full
knowledge (Stone and Devenney, 2017). Also, Amber Ltd can seek help of Tribunal or any
arbitration agreement for resolving its issue related to preventing Mr. Anderson from
commencing employment by providing services to Beta Ltd & from breaching duties of good
faith, fidelity, trust and confidence for period of 12 months after giving notice.
CONCLUSION
From the above report it can be summarized that legal system is the important part for the
development of country. There are variety of law which is most widespread part of the legal
system such as legislation law, common law, parliament act and many more and there
importance in smooth functioning and development of organization. There is systematic
procedure of the development of proposal into a law .There is significant difference between the
legislation, regulation and standards. There are different types of the formation of business such
as sole proprietorship and limited company which have there different level of risk and sources
of investment. There are different ways in which the conflicts can be resolved with taking the
help of legal system. So the legal system is very important for the development of the country
and its business organization.

REFERENCES
Books and Journals
Awdry, R. and Newton, P. M., 2019. Staff views on commercial contract cheating in higher
education: a survey study in Australia and the UK. Higher Education. pp.1-18.
Stone, R. and Devenney, J., 2017. The modern law of contract. Routledge.
Kumar, K. H., 2017. Winding up of Companies under Companies Act, 2013 & Insolvency &
Bankruptcy Code, 2016. The Management Accountant Journal. 52(10). pp.48-52.
Sharma, Y. S., 2015. Judicial Response to Winding up An analysis of Just, and Equitable
ground.
Beatty, J.F., Samuelson, S.S. and Abril, P.S., 2018. Business law and the legal environment.
Cengage Learning.
Cassel, D., 2016. Outlining the case for a common law duty of care of business to exercise
human rights due diligence. Business and Human Rights Journal, 1(2), pp.179-202.
Fici, A., 2016. Recognition and legal forms of social enterprise in Europe: a critical analysis
from a comparative law perspective. European Business Law Review, 27(5), pp.639-667.
James, N., 2017. Business Law. Wiley Blackwell (American Society Bone & Mineral Research).
Ma, J. and Marquis, M., 2016. Business culture in East Asia and implications for competition
law. Tex. Int'l LJ, 51, p.1.
Mann, R.A. and Roberts, B.S., 2015. Business law and the regulation of business. Nelson
Education.
Melé, D. and Schlag, M., 2015. Humanism in economics and business. Dordrecht: Springer.
Picciotto, S., 2017. Rights, responsibilities and regulation of international business.
In Globalization and International Investment (pp. 177-198). Routledge.
Samuel, G., 2016. Epistemology and method in law. Routledge.
Schulman, S.H., Moscow, C. and Lesser, M.R., 2017. Michigan Corporation Law & Practice.
Van Rijmenam, M. and Ryan, P., 2018. Blockchain: Transforming your business and our world.
Routledge.

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