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

This report analyzes the business law issues faced by KANGO, a home delivery meal service. It begins by outlining the English legal system, its sources, and legal principles. The report then examines the classification of KANGO's delivery couriers, comparing them to the Pimlico Plumbers case to determine if they are employees or self-employed, and discusses the financial implications of this classification. Furthermore, it explores different business structures, such as sole proprietorship, partnership, and limited liability company, recommending the LLC structure for KANGO's expansion plans. Finally, the report addresses a dispute between KANGO and its IT suppliers, advocating for alternative dispute resolution methods like negotiation, mediation, collaborative law, and arbitration to resolve the issue efficiently and cost-effectively. The report provides a comprehensive overview of the legal and business considerations relevant to KANGO's operations and growth.

Unit 7:Business Law

INTRODUCTION
Legal system of United Kingdom is the common law that is comprising mainly of
criminal law and civil law. The whole system is designed and arranged with branches that helps
in formation of laws together with maintaining legal activities all over the nation. The formation
of legal system took years and in today's scenario English legal system is termed as one of the
strongest among all the legal system present all over the world. Functions that are played by
legal system in the country are establishing regulation, maintaining order, resolving disputes and
protecting rights. When dealing with business organisation a separate law named as “Business
law” is considered. All the rules and regulations that are required to establish different form of
businesses and to carry operations legally are mentioned in business law (Allen, 2017).
In this project report nature of legal system will be defined with impact of laws on
KANGO. Businesses can be formed in various forms in legal manner and various legal solutions
to resolve dispute is mentioned in this project report.
TASK 1
KANGO was an business organisation established by Jay and Alex in the year 2016 for
home delivery meals. Business was situated in London and intended to expand to some big
cities. Before expansion it is seen that various complaints are registered under name of business
and all these issues will be resolved with English legal system. Legal principles have importance
as they served as one of the source for law formation. Legal principle are almost same in all the
legal system all over the world. Different types of legal principles are as follows-
Basic legal principal: These principles shows unspecific or communal widely
recognized understanding of general public for law. Proportionality is the basic legal principal
which is one of the key judgement standard (Cameron and Pagnattaro, 2017).
Composite legal principles: Comparativism is a complex legal principal as it requires
grouping of higher level information collected across judicial and legal professions.
Complex legal principles: Arbitrage is a complex legal principal because degree of
understanding and knowledge to group the required information is quite complex and more
expert and legal thinker is required at this level.
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The English legal system is designed with collecting the required information through
various sources that are required for designing rules and regulations for country (Sources of law,
2015). Certain important sources of law are as follows-
Source: Sources of law, 2015
Legislation: It is the process of making or enacting laws of the nation and in United
Kingdom the principal legislation is parliament that is founded in London. The laws that are
passed through parliament becomes act and considered as one of the important source for law
formation in United Kingdom (Cameron, 2017).
International treaties: To manage good relation or to operated at different nations
government of one country signs treaties with other country. These treaties specifies some
principal rules that needs to be followed while operating any activity in the country for which
treaty is signed. These regulations become source for formation of law.
European Union Law: European union is consists of various countries as member state
and United Kingdom is one of them. This union specifies laws that needs to be followed by all
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Illustration 1: Sources of Law, 2015

the member states. These rules and regulations helps in maintaining peace at international level
and becomes important source of law for United Kingdom.
Case laws: Judgement of a court on a case for which no already established law can be
applied serves as an tool that will help in developing new laws for the country.
Legal system of UK is quite effective as it comprises different laws that are designed to
deal with issues related to particular segment. As it has grown and developed over the period of
time and loop holes are minimised to great extant. Despite of this up-gradation of legal system is
done time to time whenever it is required for effective decision making through legal system.
Formation of new laws or up-gradation of old one in United Kingdom needs to be approved
through principal parliament. This parliament is consist of cardinal houses one if House of
Commons and other is House of Lords. To pass any new law in the country both the houses must
pass the proposed bill with majority. collectively with this majority royal consent is also required
to make a new law applicable (Cleaveland, Dutcher and Epps, 2015).
TASK 2
As per the present case scenario KANGO has employed a number of couriers to deliver
meals to their consumers. These employees are designated as self-employed. KANGO
organisation provides bicycle to them for making delivery of orders and these bicycles are
coloured in K's brand name. Employees need to wear an uniform and sign a contract that
specifies code of conduct. A delivery rota is issues to them and in case of unavailability a prior
notice of 48 hours must be given to them. The issue arises here is that whether to consider
couriers as employees or self-employed.
Employee is an individual who is appointed under a contract to work for a company at an
agreed compensation. Self- employed are the individuals who works for themselves as business
owner or as an independent contractor for another company (Plumbers LTD and Mullins v Smith,
2018). Earnings for an self-employed individual is directly from the business instead of salary or
commission based reimbursement. The issue in KANGO organisation will be decided on the
basis of a famous case law Pimlico Plumbers LTD and Mullins v Smith [2018]. This case law
will be served as the basis on which the whole situation will be dealt with. The given case is
based on a dispute related to employed or self-employed of Mr. Smith who was a plumber in
Pimlico organisation between 2005 to 2011. After suffering from heart attack in the year 2011 he
claimed his unfairly dismissal despite of presenting himself as self-employed from last 6 years.
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When the case was filled to court then judgement of supreme court is received. This judgement
specifies Mr. Smith as an employee in the business on certain criteria. The criteria specifies that
a tight control over performance of Smith is made by company and he was required to wear the
branded Pimlico uniform, drive van that is branded under companies name, carry an identity
card and follow all the instructions as per control room.
Individuals who deliver food for KANGO organisation is also controlled with code of
conduct of the organisation. These couriers as per judgement of Pimlico case will be treated as
employees of the organisation rather then self employed. When workers will be termed as
employees then this will impact business in economical manner. As employer needs to contribute
towards national insurance for employees. Together with this all the rights as per employment
act lies with them and business needs to make minimum wage payments, paid holidays and
protection against discrimination. Business organisation needs to make payments in relation to
all the retirement benefits. Taxation on income of employees will be paid by business
organisation and this will enhance expenses for KANGO organisation (James, 2017).
TASK 3
Establishment of business and expansion plans provides multi-pal choice to business
organisation for selecting the most suitable form in which business can be expanded. In the
present time Jay and Alex is running KANGO as a partnership business and they are intended to
expand in future to some more big cities. This expansion will provide choice for forming the
most suitable form of business organisation as per requirement of funds and management for
operating business in most profitable manner. Formation of different types of business
organisation available to Jay and Alex are as follows-
Sole proprietorship: Establishing business as an sole trader is one of the most
commonly used form in which new businesses are established. There is no legal requirement to
register business and business is not provided separate entity. Amount of capital contributed is
limited as only owner contribute funds for this and all the managerial decision lies with owner
only (Morley, 2016). Establishing business as sole trader is recommended when operations are
limited and owner do not wants to share decision making power.
Partnership: In this form of business two or more individuals join their hands to perform
a business operation with the motive to earn profits then it will be termed as partnership.
Establishment of partnership is governed by partnership act and a deed is prepared specifying the
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terms and condition on the basis of which partnership will be governed. Capital in the business
will be contributed by all the partners and management is taken care by partners together as per
their skills. Jay and Alex is currently using this form of business as operations are limited to one
city.
Limited liability company: This form of business is a new and hybrid form of a
company and partnership. As a company it possess separate legal entity with limited liability for
actions done on behalf of LLC. Feature of partnership is possess in LLC for managing its
operations as flexibility is enjoyed with benefit of pass-through taxation. Owners of LLC are
called as members and this form of business possess more access to funds which is required for
expanding KANGO's operations.
Jay and Alex are recommended for expanding their business as Limited Liability
Company. Through this form liability of owners in the business will be limited and when
expansion will be done requirements for funds will be high. A company have more access to
funds because of its legal existence and more public belief (Norris, 2016). Non banking financial
institutions provides loans to businesses when they are established in form of legal entity.
Expansion will require higher level of management and professional skills and appointing
managers in company and qualified directors this issue of effective management can be resolved.
TASK 4
In recent time it is seen that KANGO organisation is facing some technical difficulties
and their system ceases to operate for few hours. This leads to a legal dispute among operations
department of business with their IT suppliers. A dispute resulted in number of litigations and
consumes time to resolve with high amount of legal expense. When disputes are resolved
through legal system i.e. filling the issue to the court then it will become a complex and
expensive procedure to receive fair judgement. Business environment is getting complex day by
day and high amount of legal issues are generating. Going through all the court procedure for
each and every issue will hinder performance in long run. To resolve the issue with IT suppliers
alternative dispute resolution will be approached (Shaffer, 2016).
Alternative Dispute Resolution provides is a technique that helps in resolving disputes
through different different techniques. Parties involved in the dispute are provided with common
solution beneficial for both of them. As per ADR disputes are resolved through involvement of
third party and it is increasingly adoptive as a tool that will be termed beneficial for settling
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dispute out of court. ADR is generally classified into four types and any of the form can be used
by KANGO to resolve dispute.
Negotiation- In negotiation parties in the dispute voluntary participate to resolve the
issue without involving any third party. Both the parties negotiate for their terms and in the last
agree on certain common results which are accepted by both the parties.
Mediation- In this process a mediator is appointed to assist the resolution procedure
directed with proposal. Mediator does not impose a resolution on the parties and helps in
bringing both the parties in favour of a common proposal.
Collaborative law- In this form of resolution each party in the dispute will resolve the
issue on the basis of terms and conditions that are mentioned in the contract. The parties reach to
an agreement with the support of the attorney and dispute gets resolved.
Arbitration- This is the most common form for resolving dispute by voluntary
participation of parties. A private judge is appointed termed as arbitrator to resolve the issue.
Arbitrator is an unrelated individual who considers both the parties claims and decides the case
in the most suitable terms for both the parties involved (Wachter and Mittelstadt, 2019).
Jay and Alex are advised to use Arbitration in the process of resolving issue with their IT
suppliers. As a private judge will provide solution in short duration of time and business
operations will not suffer. Legal expenses can be reduced and decision of arbitrator is true and
fair since they are highly qualified and experienced. Implementing usage of various Alternative
Dispute Resolution methods will help KANGO to be more efficient in dealing with various legal
issues and operate profitably.
CONCLUSION
From the above project it has been concluded that each enterprise organisation needs to
understand legal system of the country in which business operations are conducted.
Understanding the legal system will make the business legally sound as all the legal requirements
as per business law and other laws will be met on time. Designating an individual as employee or
self-employed needs to be made by considering all the facts as this will impact economic
conditions in business. Each business organisation is available with number of options to get
established. Most appropriate on the basis of funds requirement, management and legal existence
needs to be selected. Disputes in business are resolved thorough ADR to bring decision quick
and make them cost effective.
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