Business Law Report: Law Sources, Business Impact, and Legal Formation

This business law report provides a detailed overview of business law, beginning with an introduction to the field and its relevance to commercial activities. It then delves into the sources of law, including legislation, common law, and European Union law, outlining their importance and application within the UK legal system. The report examines the role of the government in law-making and the practical application of laws. It further explores the impact of employment and contract law on businesses, using the cases of Garry Smith vs. Pimlico and the hypothetical case of Company K to illustrate key concepts such as the distinctions between employees and self-employed individuals. The report also details the legal formation of various types of business organizations, including private and public organizations, covering essential requirements such as company names, share capital, and required documentation. Finally, the report includes recommendations for obtaining legal advice to ensure businesses comply with relevant laws and regulations.

BUSINESS LAW

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Law sources............................................................................................................................1
Government role in making of law and how the law is applied.............................................5
TASK 2............................................................................................................................................5
Impact on business due to employment law and the contract law.........................................5
TASK 3............................................................................................................................................7
Legal formation of various types of organisations.................................................................7
Management of the business organization and also funding of the same..............................8
Recommendation towards obtaining the legal advice............................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business Law are made for the business in which all the laws which are related to the
business are mentioned. Business law is also known as commercial laws. These laws deal with
both private and public law. Commercial law takes in account the legal issues related with the
hiring of the employee, contracts made with the companies as well as employees, manufacturing
of goods and selling of goods, etc. The business laws effect the relationship among the employer
as well as employee in bulk. There are various types business laws such as intellectual property
law, security transaction law, antitrust law, employment law and labour law etc. The study is
done in order to find the conclusion of the case of company K on the basis of the case Smith vs
Pimlico. The various companies are decribed here which includes private, public and
partnership. The impact of contract and labour law is also described here. The management of
the business and funcs is also described here indetail. (Different type of business laws, 2019)
TASK 1
Law sources
In order to form the European law various sources are taken into consideration. The law
was made in order to benefit the business person and also the workers and the customer in order
to stop them from being exploited. There are various terms used in the law but some relevant
terms are worker, employer, employee, Goods and services, etc(Beatty, Samuelson, and Abril,
2018). There are four sources of the law in order to give the above advantages to the workers are
as follows:
1

Illustration 1: Different type of business laws
(Source: Different type of business laws, 2019
Legislation
There is no single governing factor for the source of the law but each factor plays an
important part in making of the law and Legislation is one of them, the legislation is created by
the legislature. UK's parliament is the principal legislature which is in London. This is having the
only power to pass the laws and apply to all four nations. The UK parliament contains the house
fo the lords and also the house of commons. The house of the commons have around 650
members known as the member of the parliament. Each of the MP is having its own geographic
constituency in which the MP is elected by the elector's vote in which each elector is having a
single vote and the person having the highest number of votes is elected as a MP for the
particular constituency. On the other hand the house of Lords is having around 850 members in
which 650 members are appointed by the Royal Queen. The other members are having title such
as senior bishops, lord etc. Each assembly is having the power to pass the laws in which each
legislation is having its own website(Miller, 2016). The sources of the legislation are seen in the
in the government system of enquiry 2006 and also Parliament of the Great Britain.
Common law
2

The legal system of the Wales and the England is based on the common law in which the
decision made by the senior appellate forms a important part of it. The sources of the common
law can be seen in the laws at the king's time in which there were common laws for all. Also the
source can be seen in the British Empire as equity act anti discrimination act.
European union Law
It takes into account the law and the judgement of the court which is relevant for the EU
laws. EU laws are not merely related with economic union but also considers social welfare of
the people and constant improvement in the living styles of them. There are around 28 states in
European Union Law. The citizens are allowed to vote as per the law in order to make changes in
the law. The sources of the laws can be seen in the script of Alexander the great. The treaty of
London 1949 the sources of this law have been found. This law is the basis of the modern laws
on the basis of which various law such as banking and finance, criminal laws as well as trade
laws are made in UK.
European Convention which are based on the Rights of Human
The law came into force on October 2000 which the rights of the courts in UK are
protected as identified in ECHIR. The sources can be seen in the East India Company where the
rights of the Human are mentioned.
3

UK court structure
The UK court structure follows the hierarchy in which first of all the case goes to the
Magistrates court and if the case is not resolved then it goes to the Crown court, then it goes to
criminal court if the case is very much complicated then it goes at end to Supreme Court which is
the hight authority in handling the case and their judgement is the final. The above hierarchy is
for the Offences and crime. The other hierarchy which includes immigration and security of the
society first the case goes to the Tribunal and then it goes to divisional court and so on.
4
Illustration 2: UK Court Structure

Government role in making of law and how the law is applied
The making of law is not a one-day process and it takes time. The proposal for the
making of legislation is known as bill which lays down various reasons and the various issues
that the legislation must be made because of the problems or the issues faced by the relevant
persons. For example if UK is considered then the bill must be agreed by both of the houses of
the parliament or the one house must pass the bill in order to reach the bill the second house.
After both the houses passes the bill then voting plays its role and if the voting is done in
majority in favour of the bill then the queen gives the Royal assent to the bill(Orts, 2017).
Statutary laws are the laws which are passed by the executive agencies. These laws are
generated by the court itself so there is stict obligation to follow these laws. The words of this
law is used by the judge. These law are applied upon the case which is in hand and on the basis
of analogy. The statuary laws are applied not generally rather they are applied on the case which
is specific(Bayern, 2016).
Common laws are the laws which are developed on everyday basis. Common law are
also known as the body of unwritten laws. The laws are applied for process of decision making
in unusual cases where the result can not be derived on the basis of existing laws.
TASK 2
Impact on business due to employment law and the contract law
Garry Smith vs Pimlico
The law is applied in the court on the basis of previous laws made for example taking the case of
Smith and Pimlico there were no clear rights of the employee as well as employer and also the
meaning of the worker was also not defined at that time and also not mentioned who is employed
and who is unemployed which resulted in emergence of Employment Right Act 1996 and also
the clarification of the relationship between the employee as well as self-employed was made
clear so it resulted in forming of contract law(Crane, and et.al., 2019).
Case of K
The difference between the employee and the self-employed is mentioned below:
Issues Self employed Employee
Factors which are personal Can call for the help from
outside and make work that
Whereas the employee can not
hire any outsider in order to
5

person on the behalf of the
worker as a sub contractor.
substitute the employee and
have to provide self-
serviceManagement
(Association ed., 2015).
Obligation which is mutual There is no obligation on the
employer on the self-employed
to offer the work
The obligation is on the
employer to offer work to the
employee and also the
employee is required to do the
work which is mentioned by
the employer.
Control right Self employed have control
over the maximum aspect of
work done.(Kraakman, 2017)
Employer is having the control
what, when and how is the
done by the employee.
Substitution right It depends, if the work is based
on skill which is possessed by
the self-employed then the
work can not be substituted but
if the work is not based on
personal skills then the work
can be substituted.
It is very rare in the employed
that the work is substituted.
Risk related to finance and
ability to make profit share
Can earn more and more profit
on the basis of work if done on
time with efficiency and also
can have losses if the work not
done on time.
The employee will be bearing
a little risk and about the profit
it is based on the performance
of the company and paid for
whatever work which is done
by the employee.
After making clear the difference between the employee and the self-employed the law is
ready to be implemented on the case of K in which there was no clarity whether the employee is
self-employed or just employed. The employer of the K was not exploiting the workers by
6

making them delivery of the courier and bounding them to wear the official clothes for the
delivery of the goods. So in this way the law is used for the relevant case in the court for the
justice. The conclusion of the case was that the delivery persons were considered the employees
of the company and are the employer have the complete control over the operatives of the
employee. Hence K is eligible for the respective losses for the cold food served because the K's
workers are considered as employee of the K(Haidt, and Trevino, 2017).
TASK 3
Legal formation of various types of organisations
There are various types of business organisation such as C and S corporation, Sole
proprietorship, The legal formation of various types of the organization is different as which is
mentioned below:
Private organization
7
Illustration 3: UK Bill presentation

 Private organization is formed using “limited” after the name of the company and the
name of the company must not be a copy name of any firm as per the Company's act
2006.
 Memorandum of association is required in formation of a private company which is a
document which contains the intention of the subscribers to form the firm.
 Articles of association is required in which detail provisions related with administration is
there. It also mentions how the directors take decisions . This document is also mandatory
in formation of a private firm.
 Registered office is must and must be in a physical form for the private company.
 The minimum share capital required to form private company is nill(Hazels, 2015).
 In private company there must be at-least 1 director and must also have the age of 16
years.
Public organization
 In public organization the company must use the name which is unique and also use the
PLC after its name.
 The minimum share capital requirement for the private company is 50000 pounds.
 The public company must have the directors which is at least 2 in numbers. Each director
must not be having the age less than 16 years of age(Hazels, 2015).
 Must be registered in the company house.
 The firm must have a qualified person as company secretary.
Partnership
 Partnership is not separate like a company expect limited partnership. The risk in
partnership is unlimited.
 There are at least 2 persons required in partnership.
 Certification of incorporation is required in order to incorporate a partnership.
8

Roles of directors and shareholders are as follows
Roles of shareholders
 Share holders provides finance to the company by contributing towards the company,
finance and are also known as financial supporters of the company.
 Director of the company is appointed by the shareholders and also removal of the
Directors is done by the shareholders.
Roles of Directors
 Directors are allowed to take any action in the name of the organisation in which they are
allowed to take strategic as well as operational decision for the organisation.
 Directors are also responsible to ensure that the company meets the obligation which are
mandatory.
Management of the business organization and also funding of the same.
The business organization can be managed using various elements. It also depends on
which type of business it is. If it is large then all the things required is also large. The leader
should play a important role in order to run the organization smoothly and efficiently. The
elements are discussed in detail:
Business management in limited firm
Planning and vision of limited company
The limited company must have a clear mission, which is used for short term basis and
vision, which is used for long term basis for its actions because without mission and vision the
company is like walking without any path. The private company must also have a sound plan for
9
Illustration 4: UK Public and Private Partership

the business and its activities which must be communicated to the staff. For example if the goal
of the company is to provide better services than the private company must focus on technology
investment and must keep updated(Beatty, Samuelson, and Abril, 2018).
Training of the employees.
Employees are the assets of the private company and the employer must give the
employees proper training in order to increase the productivity. The advantage of giving training
to the employee will be, the employees will be cleared of the role to be played by them.
Developing a plan for the management of the crises
In order to prevent the private organization the manager must built a plan in order to
compensate for the crises. The plan must be built taking due care of all the relevant factors and
also the plan must be in detail. It will help the private company to manage things effectively. For
examples if the firm faces disaster then the disaster can be manages if the firm has already done
insurance of the organization(Miller, 2016).
Funding
The management the fund by a private company can be done on the basis of following
factors:
The fund manager is responsible for the allocation of the assets which can be shares,
bonds, derivatives etc. and the management of these can done by making a proper portfolio. The
fund manager is responsible for where to get investment from and where to invest the fund raised
in order to gain the maximum return. The funds can also be raised by taking a bank loan at lower
rate of interest. Also, the funding for the business can be raised by Crowdfunding, angel
investing in which the investors take some share of the private company is against of giving
money to the private firm(Bayern, 2016).
Recommendation towards obtaining the legal advice
Alternative dispute resolution techniques are such tool that are used by business to
resolve any kind of diluter from legal manner. Sometimes going into court consumes too much
time of firms and also it requires too much money as well. In order to avoid court issues
companies, take assistance of ADR methods
Arbitration
10