Business Law Report: UK Legal System, Business Types, and Law Impact

This report provides a comprehensive overview of UK business law, commencing with an introduction to the legal system of the UK, including its sources and the role of the government in law-making. It then analyzes how statutory and common law are applied in business contexts, highlighting the strengths and weaknesses of the UK legal system. The report delves into key legislation, regulations, and standards crucial for new businesses, examining their impact on different business entities. It explores various organizational structures like sole proprietorships, partnerships, and limited companies, detailing their legal structures, pros and cons, and methods of management and funding. The second part of the report offers a brief overview of contract law, employment law, and company law, followed by the identification of salient legal points from case studies and the suggestion of appropriate legal solutions. The report justifies the proposed solutions, compares their effectiveness, and evaluates them against alternative legal advice, concluding with a synthesis of the key findings and recommendations.

BUSINESS LAW

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Legal System of UK...................................................................................................................1
Different Sources of Law.............................................................................................................1
The Role of Government in Law Making....................................................................................2
How Statutory and Common Law is Applied to Business..........................................................2
Demonstrate the Strengths and Weaknesses of the Legal System of UK...................................3
Key Legislation, Regulations and Standards that a New Business Needs to be Aware of..........3
Impact of different laws upon entity............................................................................................3
Discussion on different types of organisation with their legal structure along with pros and
cons..............................................................................................................................................4
How different organisation are managed and funded..................................................................5
PART 2............................................................................................................................................5
Brief Overview of Contract Law, Employment Law and Company Law...................................5
Salient Legal Points of Each Case...............................................................................................6
Suggest an Appropriate Legal Solutions to Each of the Problems..............................................6
Provide Justification for the Advice and Solution Given............................................................7
Compare and Contrast the Effectiveness of these Recommendations Given in Presentation.....7
Evaluation of the Appropriate Legal Solutions in Comparison with Alternative Legal Advice.7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Now a days people are quitting their jobs and starting their new start ups in the form of
some company or as a sole proprietorship. All these business organisations must be governed so
that there should be a uniform set of laws to form and run a business. All the laws which governs
the day to day activities of a business organisation from its formation to its winding up, are
known as business laws. In UK the most important law which has been passed by the legislature
is Companies Act 2006 which enumerates the manner in which all the business activities will be
managed and supervised. Various other laws also impact the business in a significant manner
such as Employment Laws , Contract Law, IPR Laws etc. Various forms of organisation are
there in UK which are governed by various business laws such as “Sole Proprietorship”,
Partnership Firm” and “Limited Company”. While deciding a business organisation it must
be taken into consideration that all the three above mentioned organisations requires several
separate legal formalities given under various laws related to business out of which some are
simple whereas few of them are very complex in nature.
PART 1
Legal System of UK
The Constitutional Monarchy is present there in the system of UK. The Monarch is
considered as the head of the state and the powers and functions of the monarch are enumerated
under convention. As UK is a common law country the doctrine of Stare Decisis which means
precedents are binding upon the lower courts is being followed. The Parliament also passes
various legislations on different legal issues. The Parliament here consists of “House of
Commons” ,“House of Lords” and Monarch. Members of House of People are elected
generally. In majority of the cases the system regarding the courts are supervised by the judicial
system of UK (Aagaard and Harrison, 2019).
Different Sources of Law
The law has different sources through which it has been evolved in a long time. The
various sources through which UK law has been evolved are following:
Legislations: The most common source of UK law is the laws passed by its Parliament
through the process described. The Parliament of UK is the legislature of the country which
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passes various laws on different issues. It also amend the existing laws which are required to be
changed as per the need(Allen, 2020).
Common Law or Precedents: As UK is a country which follows the common law
system which means it follows the doctrine of precedents. The earlier judgements passed by the
court is binding upon all the lower courts which is known as Doctrine of Stare Decisis. So the
precedents are also a source of law in UK(Mazaroff and Horn, 2019).
European Union: The laws Passed by the European Union were also the major source of
law in UK. All the laws or conventions which were passed by EU was binding upon UK ad it
acted as an important source of law. But now as UK is not the part of EU in present for future
purposes EU will not be considered as source of law(Mcgregor, 2017).
The Role of Government in Law Making
Generally a bill will be introduced in the either house of the Parliament. The formal
announcement of introducing a bill is known as “First Reading”. After that in “Second
Reading” the bill will be presented in either of the house stating the reasons for the introduction
of bill and voting will be done where half of the votes should be there in the favour of the bill to
proceed it for the “Committee Stage”. A Committee will examine the contents of the bill and
suggests certain amendments by submitting its report. After that again the voting will be done on
those amendments suggested and this will known as “Third Reading”. After that the bill will be
passed into the another house and after that it will go to Monarch for the “Royal Assent”. After
getting the royal assent the bill will become the Act(Barnett and Blackman, 2017)
How Statutory and Common Law is Applied to Business
A common law is the law which is based upon the judgement given by the judge. It
follows the doctrine of binding precedent. Whereas the statutory laws are the legislations passed
by the Parliament. It is not possible for the the legislature to pass a law on each and every topic
related to business so sometimes it becomes necessary for a judge to give judgement by using its
personal conscience. For instance when there was not any specific law on online transactions
was present, the judges has to give judgements according to their understanding. But afterwards
when the legislature passed the law concerning the online business transactions,the law made by
the Parliament will be followed(Marzen, Prum and Aalberts, 2016).
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Demonstrate the Strengths and Weaknesses of the Legal System of UK
The major advantage of the Legal System of UK is that it is having a rigid and flexible
form of system. Also the other advantage is following the common law system where
judgements given by judges will be considered as law. As process by which Parliament makes
new laws is of complex and lengthy nature,these judgement based laws are much easier to
implement(Bird and Park, 2016)
The disadvantages of this legal system is that if the judges are disagree with the earlier
cases then also they have to follow the binding precedent. Also the other disadvantage is that
there are many laws which needs amendment but it has not done so far(Parella, 2020).
Key Legislation, Regulations and Standards that a New Business Needs to be Aware of
The most important law which have to be followed by new businesses is Companies Act
2006. It is a basic requirement that each business should register itself with HMRC. While
employing staff in carrying out the business activities all the employment laws such as “Safety
and Health Measures of Employees” ,“Laws Related to Wages” and “Fire Safety” must be
followed. If the business is keeping any personal data then the guidelines related to GDPR must
also be followed. It is also necessary for the regulations to also follow the laws related to
consumers such as “The Consumer Contracts (Information, Cancellation and Additional
Charges) Regulations 2018”(Davitti, D., 2016).
Impact of different laws upon entity
Contract law: It is the law which has its own importance and which generally discusses that
how entity needs to perform their part of work. It is among the law which has its own importance
and discusses that how an organisation needs to perform their part of work after entering into the
contract. The impact of contract law is positive upon organisation as enforces the workforce to
complete their part of work because single mistake can create huge problem so there is high
chances that company can perform effectively.
Employment law: This law discusses that how an organisation needs to develop their
relation with employees because that is the only way to accomplish their target. In context of
entity, employment law has positive influence because it allows to maintain healthy relation
among employer and employee which is necessary for attaining the goals.
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Law of Tort: This law discusses that how any of the organisation needs to perform their
part of work. It is among the law which will certainly have negative impact because any of the
negligence in work will impact heave penalty upon organisation.
Copyright Law: It is the basic law which can be crucial for the organisation because it will
guide about the work which is allowed for entity and which are not permissible for them. It will
have positive impact upon organisation as company will be allowed to take competitive lead if
they have registered copyright for any of the specific thing.
Discussion on different types of organisation with their legal structure along with pros and cons.
Sole Proprietorship: A sole proprietorship is a form of business where the trader has
complete control over the business. He does not have a legal entity as differentiated to its owner.
This form of business is quite simple, versatile and has numerous advantages. A sole
proprietorship is personally liable for the debts of the business and hence their personal assets are
at risk if creditors can't be paid off. To form sole trader, there is a necessity of national insurance
and HMRC. The owner sustain the full control over the business affairs which is the positive of
this business. But legal rights are not given which is negative side too.
Partnership: A partnership form of business is one of the most common form of
businesses. Partnership can be of two types general partnership and limited partnership. A
general partnership is where the partners manage the partnership firm and assume the liability for
sharing profits and losses and also other obligations. A limited partnership is a combination of
both general partnership and limited partnership. The required document to form partnership
firm is HMRC and partnership deed. The benefit of partnership firm is that it allows to share the
burden offers companionship and mutual trust. The negative is that exit of single partners
requires to form new deed.
Public Company limited by Share: The business entity which is able to perform business
activity with the help of interest of public is known as public company. Here, shareholders get
great opportunity in which they can easily take entry as well as exit which is the most important
part of this form of business. There is lengthy procedure which is to be considered for
constituting any of the public company. At beginning, name is required which must not match
with other firm, then there is requirement of address of head office. First director and shareholder
has also hug role in preparing Memorandum of Association and Article of Association because
both of this documents will decide how company will perform their business activity. This
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documents needs to be submitted to Companies House. Discussing about the benefit of public
company limited by share, it gets legal rights of existence in the eye of law. The disadvantage is
that lengthy procedure are there which needs to be followed.
How different organisation are managed and funded
Organisation Managed Funded
Social Enterprises This types of entity gets the
benefit of manager for
managing each of the activity.
Basically, funded from
government agencies are
backbone of this particular
organisation.
Limited Companies Members, directors has to role
to organise the entity.
Fund from members, bank
loan is crucial in this types of
organisation.
Corporation. Company Secretary, Board of
Directors play the necessary
role in it.
Shares, debenture, bonds,
Financial institution and many
more.
Cooperative Management has the authority
to take any of the decision.
Funding from investor, loan
from bank and many more
option are there to raise fund.
PART 2
Brief Overview of Contract Law, Employment Law and Company Law
Contract Law: Contract Laws are the laws which are responsible for determining
various rights and duties of both the contracting parties. This law governs the various contracts
made in our day to day life and make sure that all the terms and conditions of the contract should
be followed in a proper manner. This Contract law also determines the compensation if there is
any breach regarding the contract. Certain essentials which are given under the UK contractual
law to consider an agreement as a valid contract are “Offer”,”Acceptance” and “Consideration”.
The agreement made should also not be for an unlawful purpose (Eyre, 2016).
Employment Law: These are the laws which affects each and every business
organisation whether it is small or big. Employment of a single staff is the only requirement for
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the application of these laws. These laws basically protects the rights of the staff and workers
working in the organisation such as “Ensuring the safety and health measures of the employees”,
“Laws related to minimum wages” (Marzen, Prum and Aalberts, 2016).
Company Law: These laws are necessary for starting a company and also for carrying
out the day to day transactions of it. While forming a new company it must fulfil certain legal
formalities such as registering it with Company House with the submission of “MOA” and
“AOA”. These company laws are also followed while winding up process too (Haapio and
Barton, 2017).
Salient Legal Points of Each Case
Case 1: The laws which will be applied in the given problem are Contract Law and
Employment Law. Here the legal issue which is in question is that whether the employee who
has done a contract with the employer regarding the deduction of the salary because the company
was in loss can now claim his salary for the previous years because now the company is making
profit (Lifshitz and Finkelstein, 2017).
Case 2: The contract law of UK will be applied in this case. The legal issue which has
arisen in this case is whether the company from whom the internet connection has been
purchased can impose charges on the customer for the period when the proper installation of the
internet was not done by the company.
Case 3: Here the issue which has been arisen is that the the company who is not in the
position to discharge its existing debts has what all the options available to avoid the winding up
process which has been applied by one of the creditors.
Suggest an Appropriate Legal Solutions to Each of the Problems
Case 1: In this case the Gordon is entitled to get the salary of the year 2017 but will be
unable to claim the salary of the previous two years because by doing the agreement regarding
the deduction of salary with his free consent, he has waived his right. Here Fred and Gordon can
go for ADR and some compensatory amount can be given to Gordon for the previous two years.
Case 2: Here, Janet is not liable to make the payment of internet charges of the period
when the proper installation was not done by Virgin Media.
Case 3: The various options are available with the Blackhorse Limited by which it can
avoid the process of compulsory winding up. Some of the options which are available are settling
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the debts, demanding period of time for repayment. The best way to avoid this winding up will
be adopting the ADR process (Hiller and Shackelford, 2018).
Provide Justification for the Advice and Solution Given
Case 1: As Gordon has done agreement of deduction of his salary by his free will and
there was no pressure upon him. So, now Gordon will not be able to claim the amount of his
salary for the year 2015 and 2016. But because now Fred's company is making profit in the year
2017, so the salary of this year can be claimed.
Case 2: Here in this case Janet is not liable to pay the amount which was demanded by
Virgin Media for the period when the installation was not properly done because there was a
valid contract between both the parties and Virgin Media has not done their part of the contract
in the manner which they are supposed to do.
Case 3: As winding up a company is process which is of complex in nature so it is highly
advisable to both the parties that the parties should adopt to solve their dispute by the way of
Alternative dispute resolution so that the Blackhorse Limited can avoid the winding up, also the
creditor can recover its debts.
Compare and Contrast the Effectiveness of these Recommendations Given in Presentation
Alternative Dispute Resolution in UK is being considered as one of the best methods to
solve the disputes between the parties (Wessels and Madaus, 2018). In traditional legal
proceedings, the main drawback was that it was more time consuming and was also expensive in
nature. The ADR process generally is economical and consumes less time while deciding the
dispute. Arbitration, Negotiation and Mediation are major ADR methods which are generally
used. Arbitration will be binding upon the parties and there will not be appeal regarding the
award whereas Negotiation and Conciliation are just the suggestions which are not binding upon
the parties(Levine, 2016).
Evaluation of the Appropriate Legal Solutions in Comparison with Alternative Legal Advice
Case 1: Here Mediation can work and mediator can try to give such suggestions so that
both the parties resolve their issues in an efficient manner.
Case 2: Here Arbitration will work so that the award will be issued against Virgin Media
for violating the terms of the contract.
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Case 3: Here Negotiation will be an effective manner by doing negotiation among
themselves to reach a win win situation for both.
CONCLUSION
By doing the above study it can be concluded that there are various business laws which
are affecting the day to day activities of different organisations. These business laws are also
necessary to keep certain “Check and Balances” upon the business organisation. These laws are
also beneficial for the customers of these organisation because it will restrict the companies from
playing mischief. It was found by this research that level of complexity in legal obligations will
depend upon the nature of the organisation.
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REFERENCES
Books and Journals
Aagaard, A. and Harrison, 2019. Digital Business Models. Springer International Publishing.
Allen, N. L., 2020. North Carolina Unfair Business Practice. LexisNexis.
Barnett, R. E. and Blackman, J., 2017. Constitutional Law: Cases in Context. Wolters Kluwer
Law & Business.
Bird, R. C. and Park, S. K., 2016. Turning Corporate Compliance into Competitive Advantage.
U. Pa. J. Bus. L.. 19. p.285.
Davitti, D., 2016. Refining the protect, respect and remedy framework for business and human
rights and its guiding principles. Human Rights Law Review. 16(1). pp.55-75.
Eyre, E. C., 2016. Business communication: Made simple. Elsevier.
Haapio, H. and Barton, T. D., 2017. Business-friendly contracting: how simplification and
visualization can help bring it to practice. In Liquid Legal (pp. 371-396). Springer.
Cham.
Hiller, J. S. and Shackelford, S. J., 2018. The firm and common pool resource theory:
Understanding the rise of benefit corporations. American Business Law Journal. 55(1).
pp.5-51.
Levine, S. J., 2016. The Law: Business or Profession?: The Continuing Relevance of Julius
Henry Cohen for the Practice of Law in the Twenty-First Century.. Fordham Urban
Law Journal. 40(1). p.1.
Lifshitz, S. and Finkelstein, E., 2017. A Hermeneutic Perspective on the Interpretation of
Contracts. American Business Law Journal. 54(3). pp.519-579.
Marzen, C., Prum, D. A. and Aalberts, R. J., 2016. The New Sharing Economy: The Role of
Property, Tort, and Contract Law for Managing the Airbnb Model. NYUJL & Bus. 13.
p.295.
Mazaroff, S. and Horn, T., 2019. Maryland Employment Law. LexisNexis.
Mcgregor, M., 2017. Labour Law Rules!. Siber Ink.
Parella, K., 2020. Hard and Soft Law Preferences in Business and Human Rights. AJIL
Unbound, 114, pp.168-173.
Wessels, B. and Madaus, S., 2018. Business rescue in insolvency law in Europe: Introducing the
ELI business rescue report. International Insolvency Review. 27(2). pp.255-280.
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