Business Law Report: Business Law in the UK - KANGO Example

This business law report provides a comprehensive overview of the UK legal system and its impact on businesses. It begins by outlining the sources of law, including legislation, case law, and common law, and discusses the role of the government in law-making. The report then examines the effects of various laws, such as contract law, employment law, and company law, on business operations, using the example of KANGO, a delivery service. It also delves into different types of legally formed business organizations, including sole proprietorships and partnerships. The report further addresses the management and funding aspects of these organizations and concludes with a discussion on the resolution of business disputes, highlighting the importance of legal compliance and adapting to evolving legal frameworks. The report uses the Pimlico case to illustrate the importance of employment law and provides employment indicators to determine if a worker is self employed or not.

BUSINESS LAW

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Sources of Law.......................................................................................................................1
P2 Role of government in law making........................................................................................2
P3 Effect of other laws on business.............................................................................................3
TASK 3............................................................................................................................................4
P4 Types of business organization’s legally formed.......................................................................4
P5 Management and funding of organizations............................................................................6
TASK 4............................................................................................................................................7
P6 Resolution of disputes.............................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Legal system is referred to a procedure r process for interpreting and enforcing the law.
Each country is required to have various laws that will help in smooth functioning of its
operations. In the fast changing environment complexities are increasing for every individual. To
conduct business in efficient manner there is need for law which regulates all the businesses to
avoid any legal compliance (Esposito, 2012). Business law is introduced to provide guidance to
businesses in UK. In this project report consist nature of legal system in UK and potential impact
of law on businesses. Together with this different type of business organization’s and appropriate
legal solutions to business is described.
TASK 1
P1 Sources of Law
Legal system of a country like UK has evolved over several years. Any legal system
cannot be incorporated in one day there is requirement of evolution and formulation of laws kept
on taking place. The legal system of UK is developed by various sources that are as follows-
Legislation: Law created by the parliament is termed as legislation. Legislations are the
most important piece of legal system in UK. Parliament is the highest authority to pass law in
UK that approves any law with the consideration of both the houses of parliament. With the
approval of House of Lords and House of Commons royal consent is also required.
Case Laws: Case laws are reported in numerous series of law reports. This become
import source of law as many cases become benchmark for future disputes and termed as law in
UK (Orts, 2013).
Common Law: The legal system of two countries in UK (England and Wales) is based
on common law one and decisions of the senior appellate court becomes part of the law.
European legal system will be considered effective as it provides universal access and
range of processes and procedures to settle different disputes. Judicial system that heard various
disputes is effectively established and these all are based on disputes arises in different sectors to
resolve them frequently.
To bring legislation into being in UK there is requirement of approval of both the houses
of parliament. These houses are House of Lords consist of 800 peers, of whom 600 are appointed
by queen on the recommendation of Prime Minister. Together with this House of Common I
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present with 650 members of parliament. Laws that are passed in parliament of a country will be
applicable on the country and becomes part of it legal system.
As businesses like K is providing delivery services by receiving orders online. The whole
business is based on how efficiently a business delivers food to its consumers. When any
legislation for employment of employees or conducting business online is proposed in parliament
then this may affect business of K (KANGO).
P2 Role of government in law making
Establishing a legal system in the country is primary concern as it helps in maintaining
smooth operations in all the areas. Importance of law is admired but formulation of laws that will
be applicable in the country is equally important. There must be an entity in UK which is well
aware regarding various issues arising in the country and globally and for this government is
considered as most appropriate authority (Wilson and von der Heidt, 2013). Government of UK
is well aware regarding legal system it deals with various personal issues and social issues on
continuous basis. Government evaluates need of laws on the basis of past information and
predicting changes that will be initiated in future. When need of formulation of any new law is
identified then a draft for the law will be prepared by presenters of government. This draft
consists of all the information regarding which law needs to be formulated and requirement of
the law. Together with this impact of implementation of law in the country will be mentioned in
draft. This draft will move through several stages and after receiving approval of all the stages
finally will present to houses of parliament. When both the houses give approval to the draft and
royal consent is received then it is become Act of Parliament.
The requirement of formulating any law that helps to govern businesses in more
productive manner can be proposed by government of UK. As business conducted by K is of
delivery services and when several issues keeps in pooping up on regular basis on regulations
that will be implemented on businesses then it will become necessary to set some guidelines for
these businesses. Government by drafting a proposal to parliament will help businesses in
formulating various laws required for operating efficiently. When businesses that are providing
services online then government of the country will help parliament in formulating laws that will
help in resolving dispute that arises in online businesses. As legislation can be imposed on
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businesses for resolving issues arises in K of disturbance in providing services (O'Kelley and
Thompson, 2017).
The process of passing a bill in Parliament includes confirmation from both House of
Commons and Lords. It is to be noted that the bill can be drawn from any of the houses,
however, it should be approved by both in the same form. For a bill starting from House of
Commons, firstly, bill title is read out loud in front of all the members as a formal introduction.
After this, debates are held whether to pass the bill or not. Once approved, it is sent in the same
form to House of Lords where a second reading takes place. This done through prior approval of
the enlisted speaker for the stated bill. Again, a debate ensues. Once approved, the bill is passed
and converted into Act or Law. The same procedure is followed for a bill starting from House of
Lords.
TASK 2
P3 Effect of other laws on business
Business organizations while operating its functions needs to follow laws that are framed
in the legal system to govern business in the country. As competition is increasing day by day on
continuous basis that leads to application of legal framework more effectively to avoid any legal
compliances (Baker and Logue, 2017). When business of delivery services are provided in the
UK by KANGO then application of various other laws such as contract law, employment law
and company law is also applicable on K. As human resource is required in large quantity to
perform delivery services. This is a organization that is based on extensive human resource
requirement. Employees that are appointed in the organization are considered to be self-
employed as they are free to work with other company with prior notice. This situation leads to
implementation of employment law to govern relationship between employees and company (K).
The employment law defines minimum wages that must be paid to self-employed employees and
responsibilities of employees towards organization. Employment law also defines authority of
the business entity and scope of businesses available to them to take any action for breach of any
legal requirement.
As employees in the company is employed on the contract basis and together with this
various business transactions are conducted on contract basis. As K provides deliver services for
food orders the contract is entered for different restaurants for delivering their orders and
charging a fixed amount of commission per order (Baird and Casey, 2013). This contract will
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being certainty in operations and business will be conducted in most efficient manner. Contract
law will help KANGO organization to estimate its operations that will also provide basis to plan
for expansion in future. Together with this applicability of company law is also their when
business is established as registered or unregistered company to operate its business activities. In
this case when expansion is done by KANGO the company will be established this will require
that all the provisions o company law in UK is followed. This law is not only implemented once
but also keeps on going when business of K is kept on operating.
From the above implications it is seen that businesses who are performing various
activities to work effectively needs to follow various laws so that any legal compliance's can be
avoided. K will comply will all the applicable laws to survive in long run and bring effectiveness
in its operations. Also, other cases such as Pimlico Case where supreme court ruled its verdict in
favor of workers employed at Pimlico Plumbers. It said that the contract of employment included
a strong premise depicting appointment of plumbers as designated workers of the company.
However, it also wanted them to be self-employed. This resulted in proving irrelevancy of
contract binding on its workforce.
KANGO engages in providing meals at home delivery basis, therefore it uses number of
couriers for this practice. As K's employees are self employed hence company has to follow
certain regulations to save itself from the government's actions. Like in the case of Pimlico, it
exercised complete control over employee's clothing, working for other firms once they leave the
company along with their salary. These were the reasons being considered as them being
employees not self employed, that made court take decision in favour of smith. Let's discuss
employment indicator which will help KANGO in identifying the weather the worker is self
employed or not:
Personal services- The couriers of K provide services of delivering meals to customers, they are
being asked to sign contract and wear company's uniform this can impact their business like
Pimlico as we have discussed above. If it's employee's are taking outside assistance and sub
contracting work to others then they will be considered self employed.
Mutuality of obligation- Employees of K should have the power to accept and reject work as
per his wishes to be considered as self employed. Hence obligation on the part of employees
according employer's demands will give them status of an employee.
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Right of Control- Employer will take full control of every single activities of employee on the
other hand self employed is likely to be controlled on certain aspects only.
Right of substitution- In case of self-employed, substitutes of individual is not acceptable as the
a skills and qualities of person can't be possessed by someone else. Therefore to be called as self-
employed courier of K's can not use substitute.
TASK 3
P4 Types of business organization’s legally formed
Business organizations can be formed legally in many ways and most appropriate form
for business based on its requirement will be selected. Application of rules and regulations in
formulation of different form of business entity is different and regulated as per law specified.
There are several forms of businesses that can be formed legally that are as follows-
Sole Proprietorship: When business activity is conducted by one individual who is
single owner of business then it will be termed as sole proprietorship business. This is simplest
form of establishing a business with no legal compliance's and payment of tax system is simple
to individual. There is requirement of taking a license for business when it is specified in the
legal system of the country (Li, 2015).
Partnership: Businesses that are established by more than one individual is termed as
partnership. This form of business involves more human resource that gives wide variety of
skills required to operate business in competitive market. Availability of finances is also more in
partnership business in comparison of sole proprietorship business. These form of business
enterprises are managed by more the one individual who are considered as active partners of
business. Sharing in profits and risk is defined is mentioned in partnership deed that make this
business a legal association by registering under partnership act.
Company: This is highly recommended form of business that required a proper legal
procedure to be followed for registering a business as company. A company is an artificial
person that possesses separate legal entity distinguished from its owners. This form of business is
highly recommended to KANGO organization as any dispute that arises will not leads business
to wind up by making owners personally liable for debts to unlimited amount.
Formation of company involves following steps:
 Choose the name of the company on which it is being established.
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 Address of the registered office will be selected and will be mentioned in the application
form of registering a business as company.
 Directors in the company will be appointed and a company secretary will be appointed
who will help in establishing business as company.
 After acquire name conformation letter and certificate of incorporation business is
established.
 Shares are issued and memorandum and articles of association is prepared.
 All the business activity will be performed in the name of the company.
Role of director:
 Director of the company helps in establishing vision, mission and values in the business
organization. This helps to set the pace for its current operations and future development.
 They helps in determining company goals and policies that will help in performing
business operations in most appropriate manner.
 Directors play role in designing structure and setting strategy of the business this will
help in reviewing present and future opportunities.
 Director will help in delegating duties and responsibilitie4s to the management so that all
the operations can be performed on time.
In “Salomon v Salomon” case has set benchmark that was held in the year 1879. In this
case Salomon is operating a sole proprietor business and transferred this business in form of
company in which his family members and he was member (Salomon v Salomon Ltd., 1897).
After converting business in company losses started to be incurred and he claimed that he is
liable to receive preferential payment before creditors. In this regard the House of Lords held that
when business is established with the motive of some illegal activity the corporate veil will be
lifted up. This leads to put obligation of liability on Salomon.
In the another case “Lee v Lee’s Air Farming ltd”[1960], this case was related with the
separate legal entity of company. As Lee held 2999 shares in business from all the available
shares 3000. When Lee died in an accident then a claim of 2430 pound is filled by his wife on
the basis of works contract under employment act. In this case it was held that there was no
existence of employee and servant relationship between Lee and organization. This makes owner
and business as one entity (Lee v Lee Air Farming, 1961).
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P5 Management and funding of organizations
Selection of a business organization while establishing a business is based on requirement
of management system and funds in the business to maintain it effectively. Each form of
business organization differs in management system and arrangement of funds. Process of
management and funding of various business organizations are as follows-
Sole Proprietorship: Business and owner do not possess separate entity and that reflects
business will be managed by owner only. There will be no complexity in the management of
entity and quick decision will be taken in relation to business activity arrangement of funds in
sole trader business is done by owner only this leads to shrinkage the base for availability of
funds for doing business in different areas as expansion plan (Henderson, 2014).
Partnership: As involvement of individuals in partnership business is more than one
then it will leads to better management by using skills of different partners. Managing
partnership business is simple but sometimes when dispute arises between partners than it leads
to mismanagement and loss is suffered by business availability of financial resource is more with
partnership business as assets of more than one individual is involved in conducting business
operations of partnership business. Availability of loans in the partnership business is more and
easy in compression to sole trader business.
Company: It is an artificial person with separate legal entity that leads to defer
management and ownership of the business. Companies have professionals and high skills
management team who keeps track of every transaction and establishes a effective management
in the company. As business of K will perform in more batter way and no requirement of
reducing transactions will be their when management will be proper for business organization.
Arrangement of funds in business can be done through issue of securities to general public and
by rising funds through loans. This form of business entity is recommended for K (Wojcik,
2013).
TASK 4
P6 Resolution of disputes
Business organization is highly competitive and while dealing with various service
providers and service receivers there are some situations that leads to disputes. In the present
case scenario KANGO is an organization which is providing services by receiving online orders.
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All the business activity is performed through online order system. When business operations are
performed with usage of online system then it involves requirement of an IT department who
works for the business to manage its operations effectively. When business operations of
KANGO are hindered due to some technology issues this creates dispute between owners of the
business and IT department. This issue needs to be resolved so that business operations can be
performed in better manner and all the negative image of business that is created can be
minimized. This will be done through ADR which resolves disputes that arises because of
technical services. Disputes related to some online technological issues then a separate
department who specially deals in online disputed can be done. This will help K to resolve the
issue on time and hindrance in business can be minimized (Laukkanen and Patala, 2014).
Arbitration is the process of bringing a business dispute before a disinterested third party
for resolving various disputes arises. The third party, an arbitrator hears the evidence brought by
both the parties and after considering all the relevant information a decision is made. This
decision is not biased and all the parties are provided a fair chance to prove their point. Decision
is provided by an arbitrator and this is binding on both the parties involved.
For resolving other disputes business organization can take help of arbitration that is
designed to resolve the disputes by providing a legal solution which is best suitable for both the
organizations. As resolving the issue by arbitration gives chances to both the parties to prove
their point so that a fair decision can be made. After making decision verdict is passed that is
binding on both the parties involved in the case. Now it becomes a legal obligation for both the
parties to follow the instruction provided in this dispute resolution panel.
CONCLUSION
From the above project report it has been concluded that establishing effective legal
system is required in each country. There are various sources of law that make a business more
effective in its operations. A business can be formed in any form which will be based on the
advantages that form provides to owner. Together with this objects o business must be achieved
with this form. There are multiple disputes arises in conduction business operations and theu are
resolved with the help of ADR, Arbitration and Mediation.
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REFERENCES
Books and journals
Esposito, R. T., 2012. The social enterprise revolution in corporate law: A primer on emerging
corporate entities in Europe and the United States and the case for the benefit
corporation. Wm. & Mary Bus. L. Rev. 4. p.639.
Orts, E. W., 2013. Business persons: A legal theory of the firm. Oxford University Press.
Wilson, E. and von der Heidt, T., 2013. Business as usual? Barriers to education for
sustainability in the tourism curriculum. Journal of Teaching in Travel &
Tourism. 13(2). pp.130-147.
Baker, T. and Logue, K. D., 2017. Insurance law and policy: cases and materials. Wolters
Kluwer Law & Business.
Baird, D. G. and Casey, A. J., 2013. No Exit: Withdrawal Rights and the Law of Corporate
Reorganizations. Colum. L. Rev. 113. p.1.
Li, T. M., 2015. Transnational farmland investment: A risky business. Journal of Agrarian
Change. 15(4). pp.560-568.
Henderson, W. D., 2014. From big law to lean law. International Review of Law and
Economics. 38. pp.5-16.
Wojcik, D., 2013. Where governance fails: Advanced business services and the offshore
world. Progress in Human Geography. 37(3). pp.330-347.
Laukkanen, M. and Patala, S., 2014. Analysing barriers to sustainable business model
innovations: Innovation systems approach. International Journal of Innovation
Management. 18(06). p.1440010.
O'Kelley, C. R. and Thompson, R. B., 2017. Corporations and other business associations:
cases and materials. Wolters Kluwer Law & Business.
Online
Salomon v Salomon Ltd. 1897. [Online]. Available through:
https://www.trans-lex.org/310810/_/salomon-v-salomon-co-ltd-%5B1897%5D-ac-22/
Lee v Lee Air Farming. 1961. [Online]. Available through:
<https://swarb.co.uk/lee-v-lees-air-farming-limited-pc-11-oct-1960/>
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