Unit 7 Business Law: Impact on Company Operations and Decision Making

This report delves into the intricacies of business law within the UK context, focusing on its impact on various business operations and decision-making processes. It explores different sources of law, including constitutional, statutory, and case law, highlighting the government's role in law-making and the effectiveness of the legal system. The report further examines the impact of company, employment, and contract law on businesses, differentiating between legislation, regulation, and standards. Different types of business organizations, their management, funding, and legal solutions for disputes are also discussed. The analysis includes a comparison of various sources of legal advice, providing a comprehensive overview of the legal landscape affecting businesses.

Business Law
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Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1 Different sources of law.........................................................................................................3
P2 Role of government in law making and how statutory and common law are applied...........4
M1 Effectiveness of legal system in reforms..............................................................................4
LO 2.................................................................................................................................................5
P3 How company, employment and contract law impact business.............................................5
M2 Difference between legislation, regulation and standards.....................................................6
LO 3.................................................................................................................................................6
P4 Different types of business organisation legally formed........................................................6
P5 How organisations are managed and funded..........................................................................7
M3 Pros and cons of different types of business.........................................................................7
LO 4.................................................................................................................................................8
P6 Recommend legal solution for solving dispute......................................................................8
M4 Compare and contrast sources of legal advice......................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
A country requires a proper and systematic rules and regulations which needs to be
followed. It consists of different laws and acts which are implied by government on companies.
the legislation system of a country differs from each other as it is formed by government.
However, it is necessary to follow and adhere law. A legal system is structure of procedure,
policy etc that is followed by public (Bayern, Burri, and Williams, 2017)
The report will discuss about sources of law and role of UK government in law making.
Besides that, it will describe about how various laws impact on business along with different
types of business legally formed. Besides that, it will be explained on ways of funding of
business and legal solution for dispute.
LO 1
P1 Different sources of law
A legal system includes laws and legislation in which government form law. Also, they are
applied by them on businesses and public. the legal system reflect how law are governed and
monitored by government. Usually, in many nations legal structure is divided into 3 that is
federal, state and local. In that entire legislation is regulated by federal. Likewise, in UK as well
similar legislation is implied. Along with it, there are different sources of law which is defined as
below
Constitutional law- this law is at foremost one which is applied to entire nation. it is applicable to
every individual. the law protects rights of individual and is written in several languages. the
purpose is to secure and concern of public place, and other places. for instance- in public schools
there is a specific dress which is wear. It does not violate right direction of self expression. also,
the government is responsible for applying of law within country (Choudhury,, 2018
Cowan, ., 2018).
Statuary law – it is law that is applied to business and people and enact in different way. here,
many statutes are described as specific law by government branch. the state must codify criminal
activity into penal bar.
Case law- As name depicts the law is enforced into criminal activity. the judge has to be
followed it while taking decision on any case. In UK case law is formed on English common
system. this is reverse of Roman law. in that code of conduct was enacted by legislation. it
consists of certain principles which is to be followed by court.
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However, it is evaluated that there is difference between civil and criminal law. it is
stated as below
Criminal law Civil law
It defines criminal activities at state and federal
level
It deals with right of individual it is applied
when rights are violated.
Here, defendant is found guilty or acquitted. In this burden of proof falls on plaintiff.
The legal penalty is incarceration, fines or
probation (Deva .and Bilchitz, 2017).
Here legal penalty is in terms of finance.
P2 Role of government in law making and how statutory and common law are applied
The government plays a vital role in law making. Also, they are responsible for regulating
as well as governing of law in entire nation. However, the government is sole body who is
responsible for making of law. Alongside it, government represents the law of country.
They are having power to accept or decline legislation. Moreover, government takes decision of
forming of law depending on situation. They can decide that for which state or federal law is to
be formed, what type of law is suitable and many other things. Besides that, there are many local
authorities and government executive who is engaged in law making. They coordinate with state
and support in law making. Apart from it, role of government in law making depends on type of
legal system.
Furthermore, it is analysed that by discussing with parliamentary committee government make
law. The Legal draft is prepared and then it is presented into parliament for discussion. Then
representative of government pass that law. Apart from it, government has to monitor and
regulate those laws as well. It highly depends on authorities that how laws are implied and what
measures are taken to implement it (Gaitán, Herrera-Echeverri, and Pablo, 2018). The local
authorities is responsible for implying of law.
M1 Effectiveness of legal system in reforms
There have occurred many certain reforms occurred in law. It has resulted in development of
new laws. However, it is analysed due to those reforms legal system has improved. there is
change in way of imply of law on nation. besides that, there is transfer of responsibility for
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offender service from home office to ministry of justice. Other than this, now laws are enforced
in more effective way and local bodies govern and regulate it through proper monitoring.
LO 2
P3 How company, employment and contract law impact business
Businesses are required to follow various laws to operate within a nation. they have to
work in ethical way and behave ethically. this enables in reflecting its behaviour towards people.
Along with it , there are certain standards and policies which needs to be adhered by them. the
regulation is formed by government and is different in nation. so, there is a high impact of laws
on business. it is because any violation results in taking legal action and disrupting image of
organisation. Thus, different laws are
Company act- it is a law which has to be followed by all companies in UK. they have to register
themselves under this act. It was formed in 2006 that set accountability of business towards its
stakeholders. in addition, act protect right of staff working in company (Giubboni,, 2018).
furthermore, director burden is reduced de to this act. It states that specific person is responsible
for his or her duty. It restricts director to lead confidential info of business. thus, if business do
not follow it then they can not operate in UK. the act ensures that legal registration of companies.
Health and safety – As name depict it is related to health and safety of staff and enforces
business to follow several safety standards and measures. the act was formed in 1974. It sets out
responsibility of employer towards staff health. there is need to install appropriate safety tools
and equipment’s at workplace. it highly impact on business. However, if measures are not
according to set standards then legal action is taken against business.
Employment act- this act establish relationship between employer and employee. It consists of
several duties and responsibilities of both of them towards each other. Moreover, act includes
accountability of employer towards employee in context of working hours, salary, etc. thus, it
protect rights of staff. It impact business as they have to ensure employees rights are protected.
Contract law- this law is contract between two parties for exchange of services. it consists of
terms and conditions which is to be adhered by both parties. Any violation of it affect on
business (Hui, and Chan, 2016).
Copyright law – here, it relate with protecting of copyright. there are some guideline and a
particular procedure which needs to be followed by business to copyright. this ensure that
business has legally protected their product.
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M2 Difference between legislation, regulation and standards
In legal system there are various elements in it which differ from one another. they are as
follows
Standards are the guidelines for specific product or service. it is a document which consist of
details and certain criteria.
Regulations are instruction on how laws are to be enforced. They are to be mandatory followed
in order to enforce law.
Legislation are laws and rules which is formed by government and applied in a country. there are
government bodies who regulate and govern laws.
LO 3
P4 Different types of business organisation legally formed
A business is a legal entity that operate within a country and provide products to fulfil
needs of people. They offer variety of goods depending on needs of people. However, there are
different forms and types of business (Kadish, Schulhofer, and Barkow, 2016). They all are
legally formed and registered. It is necessary to form it in legal way so that laws are enforced on
them. Thus, there are various organisation which is stated as:
Sole proprietorship- It is a type of business in which business is owned by single owner. the
person is responsible for managing of entire business and taking decision. the profit earned is
received by owner. It is easy to set up legally this business. there is unlimited liability in it. Also,
it is easy and less costly to set up business.
Partnership – In this there are two or more than two persons involved in business. there is
agreement done between them on basis of partnership act. Alongside, in agreement it is written
how decision are made, profit is shared, etc. in addition, profit is shared on basis of agreement or
investment made into business. The liability of partner is limited in it.
Private company – It is a business started by group of people for common objective. it is having
legal existence from others. The company is registered by share of stocks. in this liability of
stakeholder is limited. Moreover, stakeholder elect BOD who form goals and objectives. Private
company does not dissolve when ownership changes.
Limited liability company – this type of business is having feature of both partnership and
company. they are not incorporated as owner is having limited liability. It can be either a sole
proprietorship, partnership etc.
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NGO- here, purpose of business is to contribute towards society without earning profit. they ae
formed either by government or individual and is having a separate legal entity. The laws and
regulation applied are completely different. these businesses run through funding (Middlebrook,
Kierner and Hughes, 2016).
P5 How organisations are managed and funded
A business requires funds in order to perform operations and run. The funds are used in
buying land, labour, resources etc. Along with it, requirement of funds depends on nature and
type of business. therefore, it is necessary to identify requirement so that accordingly funds are
arranged. A sufficient amount of capital ensures smooth running of business. But if those funds
are not proper then it highly impact on growth. there are many ways through which organisation
is funded. they are defined as below
Bank loan- this is most common source of funding. business can get loan from bank as per their
requirement. Bank charge interest rate on basis of loan amount until loan is repaid. However,
amount of loan depends on security deposited by business. Usually, interest rate is low as
compared to other source. But entire procedure is time consuming.
Financial institutions- It is also a way through which organisation is managed and funded. there
are many financial institutions that provide funds to business. for this they charge high interest
rate as compared to bank. But amount offered is more than security deposited. also, process of
acquiring funds is easy and less time consuming (Sharfman, 2017).
Personal income- Business can be easily managed through personal income. It consists of cash,
land or asset which is used within business.
Investors- A source from where fund is obtained from investors. they are those people who
invest in business and also take equity share capital in it. Usually, they expect high return on
investment.
Friends and relatives – it is a source where funds is obtained from relatives and friends. but here,
funding is less as compared to other source. this is useful and easier way to acquire and obtain
funds for business.
M3 Pros and cons of different types of business
There are many advantage and disadvantage of different business which is as below
Sole proprietorship
pros
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In this profit is not shared with anyone and decision are taken quickly.
profit are taxed once.
cons
Sole proprietor is not able to manage and organise entire business operations.
the loss has to be entirely bearded by owner.
Partnership
pros
there is large capital in it as there are many partners.
loss is divided and bear by partner as per partnership agreement (Young, 2019)
cons
any dispute within partner may impact on entire partnership business.
Private company
Pros –
tax is not liability of one person buy entire company
Cons
Profit shared is less as it is obtained after paying tax.
NGO
Pros
there is no risk of loss in it as NGO runs on funding
Cons
The funds may not be adequate to run NGO.
LO 4
P6 Recommend legal solution for solving dispute
Case 1
In this case it is analysed that Gordon is liable to claim for his wages for 2017, 2015 and
2016. this is because as per employment law Orange computer ltd is accountable to pay all salary
to his staff. besides that, the law abide company to pay all wages to employee. In addition to it,
there is a contract which is made between employer and employee. thus, as per contract law
Gordon is liable to claim for his salary (Choudhury, 2018). this is because company has violated
the terms and conditions mentioned in contract law. So, it is clearly violation of contract and
employment law.
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Case 2
here, it is found that Janet purchased internet services of Virgin media. the price of it was
£35 per month and rent of £11 monthly. But it was observed that engineer did not fixed
telephone point. Then Janet did a complaint for it. After 3 weeks she received bill. thus, she is
liable to claim for not paying of bill. it is because as per contract law virgin media have not
followed terms and condition mentioned in law. also, as per law Janet is liable to pay for use of
services after 3 weeks. this is because she used services only after cable was fixed. Alongside,
she complained several times to virgin media of fixing of cable, even after that it was not done.
Case 3
the case is of Blackhorse limited who provide security services. One of its customer, left
a debt of £100000 due to which company turnover has increased to 10 customers. one creditor
has filed a petition in court to wind up of business. thus, there are some option available for
Blackhorse limited. they can request for more time from court to pay debt to creditor to avoid
wind up. another option is that company can sell some of its asset to pay a certain amount of
debt. But there will be a risk in this. one more option is to request for an adjournment to pay
amount via asset sale (Cowan, 2018).
M4 Compare and contrast sources of legal advice
there are various sources of dispute resolution. it is as follows
Negotiation Mediation Arbitration
In this dispute is solved by
setting of difference between
parties. then, decision is taken in
it.
Here, a mediator is appointed
who solve dispute by
communicating with both
parties. it is followed when
negotiation fails.
It is out of court method in
which arbitrator control
entire process of solving
dispute.
However, it is stated that in all legal advice there is involvement of one person in solving
dispute. It enables in listening needs of both parties and on basis of it solving dispute. thus, they
are effective way and process of getting legal advice.
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CONCLUSION
Hereby, it is summarised that UK legal system operate on basis of common law. there are
two houses in it that are House of commons and House of Lords. there are various sources of law
such as constitutional, statutory and case. UK government makes bills and pass into parliament
to make it law. Moreover, business has to follow different regulation like health and safety,
employment act, contract law, etc that highly impact on them. in addition, private company,
NGO, partnership, etc are various legally formed business. also, businesses are funded through
bank loan, personal income, and other sources. the legal solution for disputes are negotiation,
arbitration and many more.
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REFERENCES
Books and journals
Bayern, S., Burri, T. and Williams, R., 2017. Company law and autonomous systems: a blueprint
for lawyers, entrepreneurs, and regulators. Hastings Sci. & Tech. LJ, 9, p.135.
Choudhury, B., 2018. Balancing soft and hard law for business and human rights. International
& Comparative Law Quarterly, 67(4), pp.961-986.
Cowan, S., 2018. All change or business as usual? Reforming the law of rape in
Scotland. Reforming the Law of Rape in Scotland (May 28, 2018). Rethinking Rape
Law: International and Comparative Perspectives Edited by Clare McGlynn and
Vanessa Munro (Routledge 2010).
Deva, S. and Bilchitz, D. eds., 2017. Building a treaty on business and human rights: context
and contours. Cambridge University Press.
Gaitán, S., Herrera-Echeverri, H. and Pablo, E., 2018. How corporate governance affects
productivity in civil-law business environments: Evidence from Latin America. Global
Finance Journal, 37, pp.173-185.
Giubboni, S., 2018. Freedom to conduct a business and EU labour law. European Constitutional
Law Review, 14(1), pp.172-190.
Hui, E.S.I. and Chan, C.K.C., 2016. The influence of overseas business associations on law-
making in China: A case study. The China Quarterly, 225, pp.145-168.
Kadish, S.H., Schulhofer, S.J. and Barkow, R.E., 2016. Criminal law and its processes: Cases
and materials. Wolters Kluwer Law & Business.
Middlebrook, S.T., Kierner, T. and Hughes, S.J., 2016. Developments in the Law Affecting
Electronic Payments and Financial Services. The Business Lawyer, 72(1), pp.255-264.
Sharfman, B.S., 2017. The importance of the business judgment rule. NYUJL & Bus., 14, p.27.
Young, C., 2019. Putting the Law in Its Place: Business Ethics and the Assumption that Illegal
Implies Unethical. Journal of Business Ethics, 160(1), pp.35-51.
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