Business Law Report: Legal System and Business Operations

This report provides a detailed analysis of business law within the United Kingdom. It begins with an introduction to the core concepts of parliamentary sovereignty and the various sources of law, including Acts of Parliament, delegated legislation, case law, and European Union law. The report then explores the role of the government in law-making, outlining the process from bill submission to Royal Assent, and explains the application of common law within the justice system. Furthermore, the report delves into company law, employment laws, and contract law, illustrating their impact on business operations with specific examples. It also differentiates between incorporated and unincorporated business organizations, discussing their management and funding models. The report concludes with case studies and provides legal solutions to business-related issues, utilizing statute laws and case laws to effectively resolve problems, along with a discussion of alternative dispute resolution methods. Overall, the report offers a comprehensive overview of the legal landscape affecting businesses in the UK.

BUSINESS LAW

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
A) Parliament is Sovereign and the Sources of Law..............................................................1
B) Role of Government in law-making and application of the Statutory and Common Laws in
Justice Courts..........................................................................................................................3
C) Defining impact that company law, employment laws and contract law have on the
business of a company using specific examples.....................................................................5
TASK 2............................................................................................................................................7
Various types of business organisations.................................................................................7
Difference between incorporated and unincorporated business organization on basis of their
management and funding:......................................................................................................9
TASK 3..........................................................................................................................................10
CASE 1.................................................................................................................................10
CASE 2.................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Each firm has to follow some legal guidelines that are set by government in order to manage
their business successfully. Some laws are such as: employment, equality, contract law, company
law, health and safety law and so on. The report has brief discussion on the sources of law and
application of statutory and common law on justice in courts of The United Kingdom and
parliament sovereignty in UK.. There is presentation of variation in between the legislation,
standard and regulation over the organisation. Different types of organisation and its advantages
and disadvantages are explained in this study. And explanation of difference between
incorporated and unincorporated organisation. Report summarises the business concern issues
legal solutions is given with the use of statute laws and case laws wherever application to resolve
the problem effectively(Beatty, Samuelson and Abril, 2018). Study will give legal solution of
give cases. Furthermore, it will explain alternative dispute resolution method.
TASK 1
A) Parliament is Sovereign and the Sources of Law
Sovereignty can be defined as rights of governing body, these authorities make all the
decisions and no one can interfere in their judgements. Sovereignty of a parliament is a
fundamental principle which is applied across the world. The parliament of UK has limitless law
making powers. The monarch does not have the authority to make unilateral laws and also the
courts do not have the power of overriding laws. Only parliament possess the power to create,
alter and to eliminate any law. In UK all the power of making the laws is vested with the
parliament. Sovereignty of parliament could be explained using four tenets.
 Parliament vests with full authority to make laws and statutes.
 Courts does not have the authority of invalidating any statute made by the parliament.
 Parliament do not pass any law that the upcoming parliaments cannot cancel or alter.
 Laws made by the prior parliaments dot have any bounding on the current parliament.
Parliament balance itself by stating that the laws cannot be absolute.
Sources of UK laws
Act of Parliament
Act of parliament in UK is the supreme legislation that United Kingdom's Parliament has
passed. Because of the assertion of the sovereignty of UK's parliamentary and the Glorious
Revolution, any law made by the act of parliament cannot be changed overruled by any statutory

body except the parliament itself as it is the primary law. It is further clarified that any law or or
the part of the law made by the act of parliament that are in conflict with the European Union can
be revoked. Enforceability of the Act of Parliament is in four constituent countries of UK which
are England, Wales, Scotland and North Ireland. It is the main source where the laws and statutes
are framed in parliament. Bill has to get approval from both the parliamentary houses and after
that final approval from the queen of England(Cameron, 2017). Compliance of law is
compulsory in the whole country with the equal level of understanding.
Delegated Legislation
In a system of parliamentary government there are two types of laws first is the primary
legislation and the second one is the Secondary legislation known as Delegated Legislation as it
is delegated with the extra powers to make laws. It is also known as the subordinate as it possess
other laws and acts that are not made by the parliament. Delegation of power to ministers by
legislative government branch to frame secondary legislation. Secondary legislation covers
regulations, directives and the decisions which are taken by the councils and commissions UK
parliamentary generally has the provision of allowing secondary legislation. In delegated
legislation other government bodies are allowed to make changes if it becomes essential. In brief
over here the power is delegated to the public bodes and the local authorities to make laws for
particular issue in a defined region. Applicability of the law is restricted to the region or the
community for which it is framed.
Case Laws
The other legal source of law is the case laws also recognised as doctrine of judicial
precedents which is framed on a Latin principle of standing upon decisions. Judges of the courts
have to abide by the prior decisions of the superior courts. House of lords is not bounded by the
prior decisions taken by itself or the other court where as the Court of Appeal has to follow all
the prior decisions of the Supreme Court. In brief all the previous decisions taken by the judges
are considered back for making any current judgement. Previous judgements are binding on the
courts except the supreme court(Yu, 2018).
European Union Law
Since 40 years of membership, UK is complying with the laws made by European Union.
As per treaty any law made by the EU has to be followed by its member nations as it
automatically becomes applicable to them. The laws are to be implemented at the national level

in each member nation. Example of EU regulation is General Data Protection Regulation, 2016.
therefore it is also considered as a source of law and it has to follow all the directives issued by
the EU. In the event of conflicts between UK an EU Law, laws made by EU will always overrule
UK law. Business law is the legal and systematic process to justify the business organisation
legal and legal status to operates the firm. Under this act there are various laws including
employment,equality, contract law, company law, health and safety law and so on. In this report
there is detailed information about the legal system of UK. The report has brief discussion on the
sources of law and implantation of statutory and common law on justice in courts of The United
Kingdom and parliament sovereignty in UK. The principles of parliament sovereignty concerns
that the parliament has an ultimate power to making a laws. Apart from these the process o
making such laws may also outlined. There is presentation of variation in between the
legislation, standard and regulation over the organisation. Moreover there is a brief explanation
of different types of organisation and its advantages and disadvantages. And explanation of
difference between incorporated and unincorporated organisation. After that it is also
summarised the business concern issues legal solutions is given with the use of statute laws and
case laws wherever application to resolve the problem effectively(Baskerville and Baskerville,
2018).
Statutory law:
it is the type of law in which court makes all the decisions by considering historical
customs. On the bases of previous cases judgements are taken by judge.
Common Law:
It is another source of law in which results of other cases are taken into consideration, it
follows the concept of state decisis and precedent.
Equity:
This source of law is developed by court of Chancery, it is based on getting relief against
penalties.
B) Role of Government in law-making and application of the Statutory and Common Laws in
Justice Courts
Draft first get submitted to the parliament and after having discussion of both parties bill is
made. Minister check all the pros and cons of bill and accordingly take decision of approve it,.
Public authority submits a draft legislation to the cabinet minister on which the proposed law is

required to be framed. Relevancy of the proposed legislation is checked by the minister and also
its approval is required before it is passed to the parliament for considering. Both the
parliamentary houses will decide whether to approve or reject the proposed bill.
Submission of bill is made to any one of the the parliamentary houses which are house of
the common and house of the lord. In the first introduction of the bill it is read out which is
known as the first reading in this reading generally the matters of the proposed bill are disclosed .
Then the bill is passed for second reading within fifteen days where the discussion about the
principles of the bills is made and voting is a continuous procedure till the bill is discussed. At
this level the opposition parties oppose the bill and put their views against it. Suggestions for
amendments are also given at this level. After the Business law is the legal and systematic
process to justify the business organisation legal and legal status to operates the firm. Under this
act there are various laws including employment,equality, contract law, company law, health and
safety law and so on. The report has brief discussion on the sources of law and implantation of
statutory and common law on justice in courts of The United Kingdom and parliament
sovereignty in UK. The principles of parliament sovereignty concerns that the parliament has an
ultimate power to make a laws. Apart from these the process of making such laws may also
outlined. There is presentation of variation in between the legislation, standard and regulation
over the organisation. Moreover there is a brief explanation of different types of organisation and
its advantages and disadvantages. And explanation of difference between incorporated and
unincorporated organisation. After that business concern are resolved by taking legal solutions
given with the use of statute laws and case laws wherever application to resolve the problem
effectively. Second reading it is passed over to the committee stage where each clause
mentioned in the bill has to be considered by the house committee. The committee also scrutinize
them to find out any possible changes that could be made in the bill. Standing committees is
chaired by the member of a chairmen panel. Chairman can vote only when there is a tie. After
the committee stage bills are referred to the report stage(Finnegan and et.al., 2016). The bill
examined by the committee and the decisions made by it are to reported to the house of
commons within 14 days. Proposed amendments or the addition of clauses is made by the
members at this stage. Report stage is a lengthy procedure. Bills examined by committee of
houses are not discussed at this stage. The last stage is the third reading where final draft bill is
examined. Amendments cannot be made at the third reading in the house of commons but can be

amended in house of lords. Hereafter he bill is send to house of parliament for reading, the whole
procedure once again. Every amendment made is transferred to the first house for considering it
back. Bills still have the possibility of amendments and each house is bound to agree on the
changes. Procedure becomes lengthy when the houses do not come at a meeting point over the
final drafts. Royal Assent is the final stage for legislative procedure in United Kingdom. After
the completion of all the(Cameron, 2017) parliamentary procedures Queen gives the Royal
Assent to bill and then it becomes a Law. Listing of the bill is made in the Parliamentary record
of official proceedings.
Application of Common Law
Making of the common laws is based on the previous judgements made by the courts and
those judgements have a binding effects over the new judgements because of the doctrine of
judicial precedent. Courts have to refer back the earlier judgements made on the previous lawsuit
for coming at a decision on a new case. It is applicable for both the civil as well as criminal cases
. The judges can refuse the previous ruling only if the laws were misinterpreted or evidences
were omitted while decision-making. Winterbottom vs Wright is example of common law.
Application of Statutory Law
The laws which are made by the Act of Parliament and the interpretation of the
judgement is made with the help of the external and internal things such as inclusive of
dictionary, Hansards and others. Before passing any decision judges of both the criminal and the
civil courts are required to check the relevant laws and the provisions before coming at a
decision(Burley, 2017). Brown v. Board of Education is example of statutory law.
C) Defining impact that company law, employment laws and contract law have on the business
of a company using specific examples.
Difference between legislations, regulations and Standard
Terms such as legislations, standards and regulations do not have similarity between each
other as per the legal system of UK. There are a variety of differences between these terms.
Legislations are the laws that provides legal guidelines to business about running their firm
properly. Whereas regulations are different from legislation which shows the rationale of
making any law. Such regulations are made by higher authorities for ensuring that particular law
is followed carefully. Whereas standards are different from both these laws and regulation,
standards ensure quality that are required to be met by business entity or any industry. All these

things impact on business unit ,as if companies don’t follow legal guidelines then it may have to
face difficulty of may have to bear penalties. If standards are not followed then licence of
company may get cancelled by authorities (Forganni and Reed, 2019)..
Impact of Company Law
Every business of UK is guided by the Companies Act, 2006. There are several rules and
regulations governing the controlling and monitoring operations of the business. There are more
than 1300 sections providing the framework for the company beginning from its incorporation to
the regulations regarding its liquidation. The Company Law of United Kingdom lays a
significant impact over the businesses in the company ,Company law also laid the requirement of
audit of financial reports to be made by the professional auditors. Compliance with new laws has
raised operational costs for the businesses. Each and every change and amendment made in the
Company Law will have an effect over the businesses of the country. Therefore it is said that the
company law has a significant impact over the businesses of the company. If firm fails to
conduct audit in every financial year then it may create problem for business unit.
Company law explains that it is essential to follow international standards while
preparing financial statements. If companies are not following such regulations then it may have
to bear penalties. Apart from this, if firms fail to follow company law then its licence can be
cancelled. Colin Gwyer Associates Ltd v London Wharf (Limehouse) Ltd is example of it.
Impact of Employment Law
The government of UK has made number of laws for safeguarding the rights of
employees of the country. Employment laws include National Minimum wage act, 1996,
Equality Act 2010, Employment and labour laws 2016, Anti-Discrimination Code of Conducts,
Employment right act 2006, Equality act 2010, Ethical Code of Conduct, pension act 2006 etc.
Survival of business is not possible without the employees and they play an important part in the
success of the company therefore it is necessary to protect their rights and safeguarding them.
Companies are required to enter into a contractual agreement with the candidate they are
proposing to employ in the business (Luetge, Armbrüster and Müller, 2016). There are various
legal requirements which are to be complied by the company for benefiting the employees with
retirement benefits such as Pension act, gratuity act which is increasing the cost of operations of
business. Business has to ensure following all employment laws carefully, they can not terminate

any employee without giving notice to them. If it happens then employee can file case against
the employer. Anderson vs Amber Ltd is example of this law where business got affected.
Impact of Contract Law
Contract Law means an act which is enforceable under law. It has a important impact
over the business of any company as every transaction is entered on a contractual basis between
the organisations and parties. Contract are generally entered for consideration, which means
something in return. Regulations regarding the goods and service transaction of the business are
given under the Consumer Contracts Regulation 2013. Contractual agreement safeguards the
company against the outsiders as well as the outsider against the company. It also the company
in increasing the certainty of the performance of a transaction. Before selling its goods of
purchasing raw material, it has to make contract with consumer of supplier. Where it ensures that
its goods are of high quality and if any mistake is in good then consumers can return the material
or firm will pay back the money to customer. On other hand if supplier is unable to provide
quality raw material then organisation can claim againt the supplier for not giving maintain
quality material.
TASK 2
Various types of business organisations
Partnership firm:
A partnership firm is one of the type of business organisation in which individuals come
together to start a business activity to earn profit. Such partnership firm is not considerer to be a
separate legal entity. Partners comes with the share of capital to invest in the business and they
shares all the profits and losses of the partnership organisation. For becoming the partner of any
partnership firm individual must be sound mind and the minor can not participate in the working.
Minor can not be sue and not liable for any act. Any individual can enter as a partner it might a
firm which is separate legal entity in the law, a trustee and an person (Heminway, 2017). Jane,
Penny and Marie can be trade in the partnership firm.
Formation: and nature: According to the Partnership Act 1890, the partnership firm can
be create by the oral or written agreement with the consent of all the members. The minimum
number of members should be 2 and maximum is unlimited. All the partners are equally liable to
pays the debts and there is unlimited liabilities on all the partners. All of them are entitled to

participate in the management activity and getting the equal shares of profit and losses. The
partnership is end when there is situation of death of the participant or mutual end of the
partners.
Advantage of partnership firm:
Partnership firm has no compulsion for any registration. It can be form without any legal
formality, thus it is very easy to form such firm. It facilitates the better management by all the
partners are taking interests on daily business activity(Pantin and Lynnise, 2017). And all the
partners are share the risk individually so it is easier in comparison to sole proprietorship.
Disadvantages of partnership firm:
A firm dose not exist for an long period of time. The insolvency, death or any other
reason leads to dissolution of such firm. There is no legal status of the business unit.
Sole proprietorship
Sole trade or proprietorship can be define as the business which is run by the single
person in which there is no legal distinction among the business and its owner. Sole trade is dose
not mean to work alone, trader can appoint the individual as a working staff on basis on salary.
But the business holder is liable on all the liabilities and all the assets is owned by the owner.
And all the debts are the responsibility of the proprietor(Giubboni, 2018).
Formation and nature: In UK Law sole trade is the simplest form of business
organisation. In law the firm must be registered with HM revenues and customs. Owner is the
only responsible for maintaining the records and payment of tax of all the income. They must be
lodge as self assessment tax return in each financial year and also must pay-off all the tax and
national insurances. According to UK law if the business has a profit of more than $83,000 in a
year that it must be registered for the Value Added Tax.
Advantages of sole proprietorship:
There is complete control owner over the business and it is flexible to run the
organisation. Only owner can entitle for all the profit after paying the tax. There is an unlimited
liability on the proprietor so creditors are more likely to extend the credit if there is a need of
it(Sole proprietorship, 2019).

Disadvantages of sole proprietorship:
Business person is only liable to all the debts. Banks are hesitate to granting the loans
because of the higher turnover rates and smaller number of assets. Proprietor has to pay debts
even if sold their personal property. In such business raising the fund for long duration is very
hard.
In the case of Jane, Penny and Marie. They should establish the a sole proprietor business
individually by which they can control over all the activity of their business. By such way they
have unlimited liabilities so creditors are more likely to extend the credit if there is any need.
Difference between incorporated and unincorporated business organization on basis of their
management and funding:
Nowadays, choosing the way of organising the business is one of the most significant and
critical business decision. It affects the legal standing of the firm. There are two classes of the
business one is incorporated and second one is unincorporated. Incorporated firms are undertakes
corporations, while unincorporated firms are the sole proprietorship, partnership etc. and there
are so many small differences in both regarding the rights and obligations(Burton and Karlinsky,
2016).
Incorporated business:
It is the type of business that
are registered and they have to
follow legal guidelines of UK
government in order to run
business successfully.
Unincorporated business:
Such companies need not to
register itself and they have to
follow lessor no legal
guidelines
Management director, parents or any
manager manage the entire
business working. Apart from
this, companies have board of
director, employees, secretory
those who take decisions on
Owner manage the entire
business, owner is responsible
body for debts and assets of
the company.

behalf of company. These all
persons give necessary advice
for financial policies so that
company can grow well. Such
business have separate legal
identify and owner or
managers are not responsible
for the debt of firm.
Funding Investors invest in such
businesses in order to get
more return over investments.
Company has to pay company
tax and after that net profit is
calculated.
Owner need not to pay
company tax as it is paid by
individual income of person.
Personal income is used to get
fund in business hence starting
cost of this business is law.
Some of points that are majorly differentiates them are following below:
Taxation status: Unincorporated firms are not independent, their proprietor have to report their
percentage of financial gain and financial loss of firm on their personal returns. While an
incorporated firms must have to paying off all the tax on incomes. If it is distribute among its
owners then they also have to pay tax on their receivables. In short, incorporated business
owners are pay tax twice in a year and unincorporated are once in the year.
Liability of business: The owners of unincorporated business are personally liable for all the
liabilities of business, while incorporated organisations are not liable. It means if the
unincorporated business run out of the fund and there is a remaini8ng debt, the owner has to pay
such debts. On the other side incorporated business owner generally not required to pay such
outstanding debts they are independent legal entity (Giubboni, 2018).
Life of the business: Unincorporated organisations can continues as long as the owner of the
business is live. If the proprietor will die or insolvent the business were at the end point. On the

other side, incorporated organisations are not depends upon the life of any individual it is
autonomous. In comparison to any business incorporated are could last forever.
Ownership: The structure of ownership in both companies are different. Incorporated enterprise
are generally owned by the shareholders while, unincorporated are owned by the manager of it.
If someone wants to sell its incorporated firm they can sell the share and the management can
intact but if the sole proportion or partnership firm will sell the firm the management has to
change.
Control: In corporations, the all over control over the business organization is in the hands of
shareholders. If there is a huge number of shareholders than all the large decisions are put on
voting before it can be made. While, in terms of unincorporated firm all the decisions were easily
made by the owner without having any tension about anyone.
For the incorporated firm there are many sources of funding such are selling out the equity and
preferred share stock, valuing flexibility, investment and project valuations and so on. Through
this they can manage the fund for an incorporated organisation. While, unincorporated can
manage their funding through the venture capital crowdfunding, loans and so on. partners are
taking interests on daily business activity. And all the partners are share the risk individually so it
is easier in comparison to sole proprietorship(Giubboni, 2018).
TASK 3
CASE 1
Presenting legal advise to Champion Ltd for resolving the issue with its creditors
According to the case, Champion Ltd is suffering from the problem of making payments
to its creditors due to decreases in the business clients and the creditors were threatening the firm
to filling the compulsory winding up in order to realizing of payments. For defending the firm
for this issues there is an act “Insolvency Act, 1986” as per these act, when an organisation is
not able to repays the fund to its creditors and it is more than 750 pounds than the creditor of
such firms has a valid right to sue the firm and filling the winding up petition in court. After that
court may appoint an administrator and give the order of compulsion wind up of the organisation
and sell there all the assets and pay off the creditors of the firm.

Champion Ltd can go for the administration and filling the form in the court to appoint an
administrator after that court will appoint the administrator who will be take responsibilities of
business operations. The appointed administrator tries to make firm profitable in the period of
settlement which will be given by creditors to company. After that completion of such period the
creditors were pay off if the firms makes profit again if not than company has to wind up and
sold all the assets to pay them. It is suggested to the Champion Ltd to go under the
administration and continues to operates the business under it(Alzola, 2017).
CASE 2
Case – Mr. Anderson has left the Amber Ltd breaching the contract of employment and joined
Beta Ltd . Anderson is seeking legal solutions for dispute resolution.
Laws
Employment Law – The dispute can be covered under Employment Law and Labour Law 2006,
Employment Right act 2006, Ethical Code of Conduct as it deals with employment disputes.
Contract of Employment – As per employment provisions every business has to enter into a
contract at the time of employment. The contractual agreement contains various rules and
regulations to be followed by the employee and the employer.
Both the employer and the employee have to abide by the contractual agreement as per
the constitution of the UK.
Any action by the either party which which contravenes the terms of the contract will be
considered as breach of contract and the party who made the breach will have to compensate the
other party.
There are remedies available to the innocent parties for breach of employment contract.
The party can claim loss by compensation or ask for injunction against the defaulting party.
CASE LAW
Lambeth vs Agoreyo : in this case teacher made breach of trust by performing activity beyond
the contractual term. She sued the institution for her termination before his term. But the court
sentenced the teacher for breaking trust and confidence beyond the agreed terms(Swire, 2015).
Applicability
In the present case Anderson has breached the contract of employment as he was not
allowed to leave the job before giving a prior notice of 12 months to the company, even though

Anderson left the job without intimating the company. By applying the above lawsuit it is
concluded that both the employer and the employer are bound by the terms and conditions of the
contract. In the present case Anderson has breached the contract by joining Beta Ltd.
Here it is essential to inform the employee before one month, as same employee is also
responsible to give notice to firm before leaving their job but in this case Anderson left job
without giving prior information hence asper case law or employment contract company can file
case against the wrong person.
Conclusion – by analysing the various laws regarding the employment it is concluded that the
Anderson and the Company were under a contractual agreement and breach was made by the
Anderson by joining new company leaving Amber without prior intimation. In this case Amber
vests with the right to claim Compensation and damages from the company.
CONCLUSION
In the report which are described above, it is concluded that the parliament is the main
authenticity to formation of laws in UK and it is only responsible to formulates or remove the
laws. The sources of UK laws has been justify as an act of government, legislation, EU laws and
case laws. In the formation of law there is an huge participation of government i.e. drafting and
approves of carinate minister and presentation in the parliament, after getting the final approve it
is implemented over the country. The company law, contract, employment etc. defines the
operation and running system of the business and provide the guidance to the business to
operation in legal manner if such laws are not be in followed than legal consequence impose the
penalties. It is also concluded the forms of business organisation and like partnership firm and
sole proprietorship firm and there is also a brief difference between the incorporated and
unincorporated organisation and there fund management. Moreover there is two business issues
of organisation and provides the recommendation to resolves all of them.

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