Business Law Report: Analysis of KANGO's Legal Structure and System

This report provides a comprehensive overview of business law, focusing on the fictional company KANGO, a home delivery meal service. It begins by explaining the English legal system, including civil and criminal law, sources of law such as customs, common law, and Acts of Parliament. The report then examines the gig economy, contrasting the differences between self-employed individuals and employees using the 'Pimlico Plumber vs Smith' case as an example. It analyzes the employment status of KANGO's couriers. The report continues by discussing different types of business organizations, such as sole traders, partnerships, and limited companies, highlighting the advantages of setting up a limited company for KANGO, including legal personality, director's duties, and the implications of the Insolvency Act 1986. The report uses the Salomon vs Salomon case to illustrate legal personality. The report concludes by summarizing the benefits of a limited company structure for KANGO.

BUSINESS LAW

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................5
TASK 3............................................................................................................................................6
TASK 4............................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business law is the body of law which governs business and commerce and is often
considered to be a branch of civil law and deals both with issues of private law and public law.
The business laws are implemented by government to make business know about the rules and
regulations they need to follow for carrying out the business. Business laws needs to be adhered
by business while setting it up. The regulation related with contract, hire prices, manufacturing,
selling is also defined under business law. Present study will lay emphasis on KANGO which
was established by Jay and Alex in 2016 and provides home delivery meal. Report will explain
the nature of legal structure. It will also provide explanation about the English legal system.
Assignment will provide focus on the registered company providing the legal solution to the
problem.
TASK 1
English legal system
English legal system is one of the oldest law which has been incorporated in England
and Wales. It is also known as English law. This law comprises of both civil and criminal law.
English legal system provides the law, rules and regulations which business needs to follow in
order to carry out their business. English law is being considered as the origin of the common
law. This law also possesses its own legal doctrine. It makes the working of the organization
systematic.
Division of law-
Civil law- Civil law can be defined as the system which is legal and it has been originated in
Europe. The English law has been taken from the Roman law, it is fully based on the framework
of the Roman law. The civil wring includes breach of contract, negligence, breach of care of
duty, tort (Lee, Yiu vand Cheung, 2016). In this type of law, the remedies are available to the
damaged party in the form of monetary charges even it is physical damage which has been done.
Fine and imprisonment can also be given for the period of 6-12 months.
Criminal law- This type of law is totally related with the crime. In this type of law, the
punishment is given to those individuals who prohibits the law. Rehabilitation can also be given
to them. Any individual who is engaged in life threatening, harmful acts like murder, theft,
sexual assault are punished within the court. These offences are considered as the most serious
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one in the eye of law. The remedies which are available for these crimes are life time of
imprisonment.
Sources of law-
Customs- Custom are one of the most important source of law. This is very important in the
legal system. It can be usage or habit. These are based on the trust, belief, values, thoughts and
traditions of people. Government makes sure that no laws hamper the values and belief aspects
of any culture. These are very important for the harmony of nation.
Common law- Common law is also known as the judge made law or case law. In this type of
law if the court has resolved the similar dispute before, then they are bounded to follow the same
judgement afterwards. Doctrine of judicial precedent is used for ruling which is given through
the binding effect. All lower court also needs to follow the higher court decisions on the same
judgement matter.
Act of parliament- It is one of the most important source of law. An act of parliament, also
called primary legislation, an act of parliament can be enforced in all of the UK constituent
countries. The act of parliament act between 1861 to 1947.
Legislative proposals are brought before either house of parliament in form the bill passes by
both the houses of parliament.
Act of parliament become into meaning
Parliament has authority to make new laws or make changes in existing legislation. It is
essential that such act are approved by House of lords and commons. It came into existence in
1849, it is printed on Vellum.
Tracking bill formation
A proposed new law is called a bill. Bills must be agreed by both Houses of Parliament and
receive Royal Assent from the Queen before they can become Acts of Parliament which make
our law (Lee, Yiu vand Cheung, 2016). The bill is first brought up in the parliament through the
first reading. This first reading is taken as the official notice that bill is going to be proposed. It
contains the information related to what bill is going to be about. After this the second reading
is been conducted. In this the principles are taken on the house of the floor. The bill after this is
consented by small groups of MP’s. They take time to prepare it and then discuss the bill. After
the second reading comes the third reading. At this stage there exists a debate over the bill. If
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the majority is there with government then it is passed to the house of lords. When the bill is sent
from both the houses then it is given to queen for the royal assent.
TASK 2
The Gig economy- The Gig economy can be termed as an economy that undermines the
traditional economy. In this type of economy, the employees rarely change the position on which
he or she is working. They select a life time of career rather than altering the position on which
they are. It is a free market setting where the individual comes up with temporary contract with
the contractors who are independent for short period of time.
Difference between self employed and employee
Factor Self employed Employee
Personal service In this the self service is been
provided. Can also hire some
other person to do work
Services given are personal
Obligation Work is done on self-created
conditions
Works on organizations condition
Right to control They take care of their own
work
Controlled by firm
Equipment Bring their own set of tools Tools are given by firm
Employment benefits Created by self Given by enterprise
Financial benefits Revenue received on basis of
job.
Company provided holiday,
vacations
Pimlico Plumber vs Smith case- Mr. Smith was working as a plumber in the Pimlico plumber
organization from August 2005 to 2011 (Lee, Yiu vand Cheung, 2016). The case study provides
that in January 2011, Mr. Smith suffers from heart attack because of which he was unable to
perform his job. So after this the plumber asks his boss to reduce his working hours, which
Pimlico Plumber refused to give. For this discriminated treatment plumber files a case against
them. Mr Smith also filed the case against the health and safety, equality and holiday pay against
employment right act and equality act. The decision of the court in the year 2018 comes into the
limelight. The worker in Pimlico plumber was working on the contract basis. The decision of the
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court was given on the overarching contract. The organization has the tight control over the
working of Mr Smith the plumber.
Employment status of Couriers of KANGO:
The meals of the KANGO were being delivered on bicycle to the consumers. The delivery boys
were asking to wear the uniform while delivering the goods and services. The courier took 48
hours to reach its destination. The company possess the tight control over couriers. Firm was
engaged in making delivery fast of courier service given by them. Employees in company was
not allowed to take work off without permission
TASK 3
Types of business organisations and advantage if it is registered as limited company
Legal personality: Each registered firm has its separate legal identity. Director is responsible
person in organisation, individual is liable to run the business (Pillay, 2017). They take decision
on behalf of entity. Royal Charter was responsible for creating a company before 1855. But later
on country has created legislation for forming a legal enterprise. Now it is essential to pay
dividend to all stakeholders if organisation is generating reasonable amount of profit. On other
hand if firm fails to generate revenue then stakeholders of members will lose their invested
amount. Salomon vs Salomon co1897 is the great example of legal personality
Director duties
It is essential for each organisation that to have one director, individual will be main
stakeholder and will take decision on behalf of firm. Managing director and board of directors
are responsible for activities of business unit and its sustainability. In the year company act was
formed and this legal regulation has cleared the purpose and duties of director under the section
170-178 of this company act.
Key duties of director are explained as below:
S170: director have high interest in business unit, all the decisions are taken by director.
S172: Director has to look upon the factors that impact on success of organisation and have to
work for promoting success of company.
S174: Director has to exercise skills that may help in taking right decision and judgement.
S175: Director has to work for the benefit for company rather than personal benefit
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Insolvency act 1986 states that if there are wrongful trading in company then director is
responsible for the same.
Salomon & Co Ltd
Salomon was working as sole trader, his wife and kids have encouraged him to register
the firm as limited organisation. Salomon took the title of registered company but later on he
faced issues in generating revenues. He was unable to repay liabilities on time. Liquidators have
said that he is responsible for all the debt of enterprise, as he is director of the business. High
court has taken decision that it has separate legal identity and director will have to pay all the
obligations to creditors (Valenti, Kirkman and Wooten, 2016).
Types of organisation
K company is planning to setup itself as limited company. There are various types of
business organisations options that are available to K. These are explained as below:
Sole trader: It is the business which is run by individual. Person has independent control over
the business activities and all the decisions are taken by single sole trader. Owner is liable for all
the debts and if business gets failed to earn profit then owner will have to pay all the liabilities
from personal savings (Adams and Nehme, 2015).
Partnership firm: This type of organisations is run by two partners. Both these individuals share
profit and liability of firm. It is governed by partnership act 1890. It is essential to run
partnership organisation successfully that both partners disclose all necessary information with
each other.
Private/Public limited: These firms are limited by shares. It is essential for public company to
sell their shares in stock exchange. Director or board of members are not responsible for any debt
(Gabler, C. B. and et.al., 2018). If enterprise is generating profit, then it becomes essential to pay
dividend to all its shareholders. No one can use the name of limited companies, if it happens then
entity can sue against the individual who has used it (Nobre, 2018).
Advantage of setting up a limited company for KANGO
Limited companies get several advantage as compare to sole trader and partnership firms.
If K company register itself as limited firm, then many benefits are available to the organisation.
These are explained as below:
 One of the major advantage for K would be that owner will have to pay less personal tax,
as limited companies have to pay tax for company. Each limited enterprise gets relaxation
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from tax amount to the certain limit if it has some loan or borrowings (Bone and et.al.,
2017).
 Another benefit of being a limited firm is that K would not be liable for any kind of
liability of debt. If it fails to generate profit, then director will not have to pay to all
shareholders. Limited organisations can offer secure investment to investor.
 These enterprises have separate legal identity.
 Ownership and controlling is in the hand of director or owner. Ownership needs not to be
shared with any third person (Lee, Yiu and Cheung, 2016).
 Employees have rights to purchase shares and they can also behave like a shareholder of
organisation. Limited firms get easy finance availability, as banks and other investors like
to invest in such kind of enterprises.
Steps to form a company
 Section 8 explains that owner has to prepare memorandum of association at the time
of registering a firm and it needs to be signed by stakeholders.
 Section 9 explains that at the time of registration company has to declare all
information such as name of business, address etc.
 It is essential to form article of association asper Section 9 (5). That shows that
company will follow all necessary regulations to run firm successfully.
 Section 9 (4) states that initial shareholding and capital statements need to be clear.
Firm needs to have minimum share capital.
 Section 13 states that alternation in memorandum of association needs to be done if
all stakeholders are agreed.
TASK 4
Alternative methods of dispute resolution
Alternative dispute resolution (ADR) is the process or approach of resolving commercial
disputes. It is not possible for everyone to get involved into legal matters and wait for the longer
period for court’s decision. ADR technique aids in minimising court proceedings cost and
resolving any issue in smooth manner informally. K is facing disputable issues with IT suppliers.
If company deal with such clashes from legal manner, then it would be expensive and time
taking for it. There are several alternative resolution techniques that may help organisation in
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resolving such disagreements effectively (Bachar and Hensler, 2017). These are explained as
below:
Arbitration
It is private judicial method which is used to resolve conflicts situations. Civil Procedure
Code Articles 1442 regulate this technique. If any kind of dispute occur between two parties,
then third person or arbitrator is appointed by them. Individual looks upon the facts and
applicability of rules. On the bases of rules arbitrator renders decision. Judgement of arbitrator
needs to be accepted by both involved people (Ojiako and et.al., 2018). K can take support
arbitration method, as it will help in resolving problem with IT suppliers in smooth manner. One
of the main benefit of using this technique is that it would help in keeping information
confidential. Arbitrator is selected by both parties hence flexibility is another great advantage of
this tool for K company. There is no need to pay heavy litigation fees.
If there are some international disputes, then it becomes very hectic to go into high court
to resolve that matter. In such condition both parties prefer to use arbitration method for finding
best solution of their dispute. This is quite simple and cheaper method of resolution as compare
to litigation. There are many issues which take longer time to get resolved and it becomes very
complicated to find suitable solution for technical issues. In such condition Arbitration technique
help in resolving problems quickly. Arbitrator is having same immunity as judge is having. But
parties can find easy and immediate solution by involving arbitrator in the clash.
Mediation
It is another ADR technique in which mediator call both involved parties to find a best
solution to resolve that dispute. Decisions are made after mutual discussion with both parties.
Mediator cannot force involved people to accept the judgment, as they can refuse to accept the
agreement or judgement of person. It is non-binding process; hence parties have full control over
entre dispute resolution process (Menkel-Meadow and et.al., 2018). It is the process in which
both parties find their own solution. This method is generally used in pre-litigation process. As
parties have interest in their relationship, mediation technique takes care of their relationship. It
is impartial process, mediator listen views of both persons and accordingly take the valid
judgement. Self-determination is another great advantage of mediation process.
Negotiation
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It is the type of ADR method in which both parties negotiate on particular matter with
each other. Sometimes it is done in the presence of attorneys. Both involved person come to the
decision that may create win-win situation for both these people (Alternative Dispute Resolution
Methods, 2013).
Conciliation
It is another alternative dispute resolution technique which helps in finding best solution
of any commercial disputes. Conciliator listen views of both parties and give suitable suggestion
to both in order to resolve any issue (Starr and Goodale, 2016). But person don’t have power to
enforce decision. If both party’s refuses to accept decision of conciliator, then only solution is to
file a case in court.
K company can go with negotiation and Arbitration techniques; both these methods will
help the firm in resolving disputes with IT suppliers. As it would be cost effective tool of
finding best solution of commercial disputes and maintaining confidentially as well.
CONCLUSION
Above report can be summarised as English legal system has two main branches: criminal
and civil law. Government plays significant role in law making, as any bill gets passed in
parliament and after discussion it is finalised by European government. There is difference
between self-employed and employee. Self-employed people needs not to carry employee’s ID
and they have choice to transfer their job to any third person. But employees are required to carry
official id. Limited companies have tax benefit and these companies can get easy funds from
investors. Arbitration is the best alternative dispute resolution technique that supports in
maintaining trust and relationship of both involved parties.
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REFERENCES
Books and Journals
Nobre, G.F., 2018. Automata Economicus: assets that create value and the artificial Creative
Economy. ECONOMÍA CREATIVA. (09).pp.10-26.
Nobre, G.F., Automata Economicus: Machines that Create Value and the Artificial Creative
Economy. Índice, p.10.
Adams, M. A. and Nehme, M., 2015. Business Organisations Law Guidebook. Oxford
University Press.
Bachar, G. J. and Hensler, D. R., 2017. Does Alternative Dispute Resolution Facilitate Prejudice
and Bias: We Still Don't Know. SMUL Rev. 70. pp.817.
Bone, S. A. and et.al., 2017. Detecting Discrimination in Small Business Lending.
Gabler, C. B., Rapp, A., Richey Jr, R. G. and Adams, F. G., 2018. Can Service Climate Detract
from Employee Performance? The Role of Experience in Optimizing Satisfaction and
Performance Outcomes. Decision Sciences. 49(1). pp.7-24.
Lee, C. K., Yiu, T. W. and Cheung, S. O., 2016. Selection and use of alternative dispute
resolution (ADR) in construction projects—Past and future research. International
Journal of Project Management. 34(3). pp.494-507.
Menkel-Meadow, C. J. and et.al., 2018. Dispute resolution: beyond the adversarial model. Aspen
Publishers.
Ojiako, U. and et.al., 2018. An examination of the ‘rule of law’and ‘justice’implications in
Online Dispute Resolution in construction projects. International Journal of Project
Management. 36(2). pp.301-316.
Pillay, R. G., 2017. Adaeze Okoye, Legal approaches and corporate social responsibility:
towards a Llewellyn’s law-jobs approach. The Law Teacher. 51(4). pp.525-527.
Starr, J. and Goodale, M., 2016. Practicing ethnography in law: New dialogues, enduring
methods. Springer.
Valenti, A., Kirkman, D. M. and Wooten, K. C., 2016. Translational Science and Its Effects on
Organizational Structure and Program Management. Project Management Institute.
Online
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Alternative Dispute Resolution Methods. 2013.[Online]. Available through <
http://www.mondaq.com/turkey/x/261366/Arbitration+Dispute+Resolution/
Alternative+Dispute+Resolution+Methods>
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