Business Law Report: Impact of Legal Systems on Businesses

This report provides a comprehensive overview of UK business law, exploring the nature of legal systems and legislation impacting businesses. It delves into the concept of parliamentary sovereignty and examines the various sources of UK law, including legislation, common law, European Union law, and the European Convention on Human Rights. The report explains the role of the government in the law-making process, detailing the stages of law creation and the application of statutory and common law in justice courts. Furthermore, it analyzes the impact of company, employment, and contract law on businesses, offering insights into the formation and management of different business types, such as sole proprietorships, partnerships, and companies. The report includes discussions on the advantages and disadvantages of various business structures and provides examples to illustrate the practical application of legal principles in business contexts. Finally, the report addresses legal solutions to business problems, covering key aspects of business law and providing a foundation for understanding the legal environment in which businesses operate.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
SECTION 1: Nature of legal systems and legislations impacting businesses.................................1
TASK 1............................................................................................................................................1
Meaning of the statement 'Parliament is Sovereign' and discuss the various sources of UK
Laws............................................................................................................................................1
Explain the role of government in the law-making process and how statutory and common
law are applied in the justice courts............................................................................................3
Elaborate how company, employment and contract law has a potential impact upon business. 4
TASK 2............................................................................................................................................5
Exploring the nature and formation of different types of business.............................................5
Difference between unincorporated and incorporated business referring to how they are
managed and funded...................................................................................................................6
Advantages and disadvantages of a partnership and that of a company.....................................7
SECTION 2: Legal solutions to business problems........................................................................8
Case 1..........................................................................................................................................8
Case 2..........................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The law that has the duty to deal in the background of business or commercial sector is
known as business law. The main concept of legislation behind commencing business law is just
to make sure that whenever there is the requirement of legal advices they can take the help from
it. It is one of the law that tells how organisational works can be managed and who should take
the responsibility to handle day to day affairs. This individual report has the aim to collect
different information which is needed at the time of conducting any of business activities. This
individual report will have a direct relation with Parliament, formation of new laws and polices.
Here, number of laws that can impact the business organisation, procedure of formation of
company will also be explained in this file. Alternative Dispute Resolution will be explained in it
with addition to its proper use.
SECTION 1: Nature of legal systems and legislations impacting businesses
TASK 1
Meaning of the statement 'Parliament is Sovereign' and discuss the various sources of UK Laws.
There are number of laws and policies which can be formed, but still it is necessary that
power should be delegated to rights hands to bring effective results. In UK, this power is in the
hands of Parliament who does most of the work to commence those laws and polices which can
help to arrange every single work in systematic manner. The Parliament of UK is sovereign
because they have the rights to commence any of the law in UK where no one can challenge it.
Even, they are the one who have most of the rights to control the aspects of legislative
proceedings. As per the principles of UK law, it has been clearly mentioned that none of the
judicial court has the power to question any of the legal validity of Parliament's law and Policies
(Bishara and Westermann‐Behaylo, 2017). The role of Queen is the most important because
she is the lady who has the most number of power within the premisses of UK. Queen has the
final authority to approve any of the bill to make it as a legal law. Each year during the month of
October and November, Queen delivers the speech which represent the House of Parliament.
This is the speech which sets the agenda for political parties that how they are required to work
throughout the year. This speech is said as the opening session of parliament house.
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Sources of UK law
It is amalgamation of four major elements legislation , common law , European union law and
European convention on human rights .
Legislation: Whenever an issue related to society arises and causes sociological issues, it
is resolved by making laws and that power is with legislature of the country . It defines the laws
made by the country's government . It consists of an certain procedure that is followed for the
formation of laws,
There are two divisions of legislation :
1. Primary : The legislatives bodies functions to set the border outline or formation of the
'Acts'. It provides the general guidelines and the elements that shall be viewed before the
formation of law . These are numbered chronologically with the year of passing (Burley,
2017).
2. Secondary : After the primary guidelines are provided by the legislative bodies , they
function to create the legally possible or enforceable laws , and create the laws in the
'Acts'.
Common law: The formation of laws after the bench of the court makes an jurisdiction
that is remarkable. Whenever bench of judges don't get the appropriate laws and regulation to
find the conclusion of a case, then they need commence new laws and polices for declaring the
fair and true result. This form of law is also needed to be considered by every individuals.
European union law : As mentioned on the official European union website, the whole
and sole purpose of the formation of the union is to actively encourage peace. Economically,
having the union gives a very strong hike in global market to its all members countries and a
strong competition to other countries globally. The main work of European Union Council is to
act for the national government that makes the policies or approach for a new one. They
commence all of those laws and polices which is helpful in the corporate sector. European Union
law is the source which have commenced the maximum number of law within UK (Grace and
Cohen, 2013).
European convention on human rights (ECHR): It was created for the protection of
the human rights of the people that come under the ECHR . The need of this convention was
realised after the second world war for the protection of rights of humans, maintaining peace and
to promote democracy. They need to make sure that anyone's rights are not affected and equal
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opportunity are being provided. The major support has been given by ECHR in forming the laws
like Equality Act, 2010, Health and Safety law and many more.
Explain the role of government in the law-making process and how statutory and common law
are applied in the justice courts
Government of any nation have the huge responsibility to mange the work which has
been assigned them. In same manner, government of UK has also got the huge role and
responsibility which they are required to complete. Any of the mistake can cost them a huge
problem (Hanrahan, Ramsay and Stapledon, 2013). So, government has to follow a proper
procedure while enforcing the law and policies.
The government or parliament is divided into two parts and they are said as House of
Common and House of Lords. The duty in House of common is assigned to Member of
Parliament where as same work is delegated to the peer member who represent House of Lords.
While commencing the law, both house of lords and house of commons have the equal work
load as they both are required to conduct the same procedure. The different stages which is
needed to consider is explained below:
 First Reading: This is the primary stage where it is necessary that bill must be given the
title. For the first time in parliament house bill is presented in front of the member of
first reading.
 Second Reading: This is the processing stage in which it is necessary that debate should
be done on the main areas of the bill and what is the main purpose of commencing this
bill into law or Act.
 Committee Stage: Line scrutiny has to be done by member where they can even do the
voting to decided whether bill should be changed or not. If they wants to change, then
they need to mention the points which they are willing.
 Report Stage: The role of report stage is very important because they are the one who
needs to take the responsibility to change the points which are prescribed by committee
stage. The motive behind the changes is simple as they want to improve the level of bill
so that proper use can be taken from it (Hawkins, 2012).
 Third Reading: This is the tidying up stage where members of house of common get the
final opportunity do any of the amendments, if it is necessary. Even voting is also
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required in it where resolution is needed to be obtained. This process is even conducted in
House of Lords too. Royal Ascent: If both, House of Lords and House of Common agrees on the points that
which are mentioned in bill then it is necessary that bill must be submitted for Royal
Assent. Queen has the only authority to give the final approval for bill which has been
presented (Hazard, Hodes and Jarvis, 2014).
How statutory and common law are applied within justice court
The most important for justice court is that how they can declare their decision. For
declaring the decision, statutory laws and common laws are formed which gives the support to
the judges of justice court. If in any of the case, decisions can be declared with the help of
statutory law then it is applied as laws and remedies are written in it if any one does the default.
While in case of common law, judges need to have a proper research of past cases to declarer the
decision in best suitable manner.
Elaborate how company, employment and contract law has a potential impact upon business.
It is necessary for any of the business to understand that what are those areas which
create problem or provide benefits so, that company can achieve any of the certain position.
Some of the laws are explained below which do have the impact on any of the business
organisation.
Company law: It is the law that has the important role for any of the organisation where
they gives the guidelines that how organisation can manage day to day activities. The most
important task for associations is to take any of the legal actions by considering the terms and
condition of Companies Act 2006. The major things which is important to understand is that it
impact on business either positively or negatively. For example: CTS Ltd is one of the public
limited company where number of work is required to be done and that consumes the time of a
company which might create problem sometimes but still chances of errors reduces in it. So, in
short it can be said that do have the positive impact on company (Kaplan, Weisberg and Binder,
2014).
Contract law: The law which has the responsibility to make clear that all of the work
should be done with the help of entering into the contract. The main things which is important to
understand is that without entering in the legal contract it is not allow to conduct any of the
business activities because true and fair guidelines are mentioned in it. For example: If there is a
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Company JDR Ltd and a individual named as Jacob and they both entered into the legal contract.
After certain period of time, Jacob denies to complete it and because of that company has the
option to sue Jacob as he didn't have the valid reason for breaching the contract. Which means
company has the favour to take a claim from Jacob which has a positive impact for them.
Employment law: There is the concept in any of the nation that company should be well
known about the legal terms which is are mention in employment law. There are positives as
well as negative outcome of this law because certain boundaries are their which doesn't allow
company to perform their task which they are willing to perform. For example: The positive of
employment law is that, it try to make sure that proper safety equipments are being given to
every employee's who operates in the field of hazardous industry due to which unnecessary
accidents doesn't occur and that is the positive impact on company as well as client (Mann and
Roberts, 2012).
TASK 2
Exploring the nature and formation of different types of business
Sole Proprietorship: A sole proprietorship is the most common and the simplest form of
business, as the term defines itself it is whole and sole managed by a single person. Being the
owner of the organisation and not having any partner or co-worker but it can employ a person to
work for it but this person will not share the profits or debts or make any decisions for the
business. This type of business does not need much investment or any much paper work for the
start-up. Legal protocol that shall be followed for its formation:
 Get a minimum capital investment (generally savings of the person or a loan from bank
or person)
 Register name and business name and attain a local licence .
 Setup the structure
 fill a schedule C form with the standard form 1040 , the schedule form calculates the
personal tax return of the proprietor.
Business Partnership Organisation: This type of partnership is formed when two or
more then two individual/organisation work together for the purpose of achieving the targets by
having similar goal is known as partnership firm. There are many advantages and disadvantages
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to forming a partnership setup together as partners share Profits and Losses as per the ratio
mentioned in the contract. They pay tax separate for their part of profit annually. Legal protocol
to be followed by the business partnership organisation are explained below:
 Choose the name to be called after commencement of partnership.
 Nominate a partner with the business shall be done (McMillan, 2012)
 Then, there is the requirement of preparation of the deed which will be required to
deposit in the Companies House.
Joint Ventures: A Joint ventures is basically two or more business organisations or
companies come together to share the benefits of working together. They can work separately for
their part or can mix the decision for both the sides. These two companies come together for a
specific project and work together for the period of time. While forming the joint venture it is
necessary that registration should be done in Companies House.
Private Limited Companies: These type of business organisations are not available for
the public in general nor it can be invested in the stock exchange. Its operated distinctively by its
directors and company secretary. Here the shareholders cannot transfer shares or let anyone
purchase it they are generally limited in their shares, which is on an average 40-50. Legal
protocol to be followed by the organisation :
 choose the name of the company.
 register with the company house.
 certification of incorporation for the verification of the companies existence.
 Personal information about the owner , shareholders and investors.
 one can also register by a post an agent or a third party company (Murray, 2014).
Difference between unincorporated and incorporated business referring to how they are managed
and funded.
Business can be of two types which tells that how any of the company is required to work
and what are those liabilities and responsibilities which they are needed to complete to
accomplish the target of an organisation. Difference between both business are listed below:
Unincorporated Organisation Incorporated Organisation
This form of business doesn't have to follow
lengthy proceeding to meets their targets and
This form of organisation are the one where
each and every work must be done in
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goals. systematic manner.
They don't have the rights to sue or be sued. They do get the rights to sue and be sued.
There is no requirement of more number of
people to manage day to day activity.
There is the requirement of proper time where
every decisions must be taken after proper
discussion.
Unincorporated Organisation: This types of organisation is dependent upon the
investor themselves to manage every single work because team is mainly not required in it.
While managing the fund this types of company can easily take the help of number of sources to
manage every single work in a systematic manner. Some of the ways to funding in it are listed
below:
 Introducing the capital by investor themselves.
 The organisation has the option to take a loan from bank (Nichols, 2012).
 Credit is one of the finest option available.
Incorporated Organisation: This types of organisation is one of the most important
business organisation where KMP is the one who takes the responsibility to manage every single
work in systematic manner. KMP means in are Board of Directors, Company Secretary, Chief
Executive Officer of the company. The sources of managing the fund in this form of business is
in different numbers and they are listed and explained below.
 Shares can be issued.
 Debenture, bond is also one of the option (Zimmermann, 2012).
 Loan can be taken from bank.
 Peer to Peer lending is also one of the option available.
Advantages and disadvantages of a partnership and that of a company
Some of the advantage as well as disadvantage of a organisation over partnership
association is explained below:
Advantages
 Perpetual succession can be enjoyed by company but in case of partnership firm minor
changes is also not allowed with existing deed.
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 Government have given the number of sources to raise fund for company but it is not
available with company. Investor's liability is limited but same is not available for partnership firm (Norris, 2016).
Disadvantages
 There is a lengthy process to incorporate company but process is easy at the time of
partnership firm.
 Winding process is expensive whereas if partnership have clearly all of the liabilities then
they can wind up the firm at anytime (Yosifon, 2013).
SECTION 2: Legal solutions to business problems
Case 1
Case Scenario: This is the case which is completely related with default in payment.
Here, Champion Ltd was unable to pay the debt amount to its creditors as they were suffers from
several losses and problems. Now, creditors are threatening them that they will file sue them
with in the court for winding up.
Winding up: It is the procedure where the company is declared insolvent or bankrupt.
Here, debts are need to be paid off and all the tangible and intangible assets of the company are
dissolved into liquid cash and paid to the creditors. It is the final assessment year of the company
and the company shuts down officially. There are different types of winding up process which is
explained below:
 Creditors voluntary liquidation: It is the process where the company is unable to run and
due to increase in debts it has to officially shut down. Once this decision is taken all the
tangible and intangible assets are dissolved in order to pay the creditors of the company.
Procedure for it is very simple:
◦ Meeting is to be held where discussion is need to be done for the none payment of
creditors (Raz, 2017).
◦ At-least 75% of the shareholders shall agree with the liquidation process.
◦ Appoint a liquidator.
◦ Send the paper work to companies house in 10-15 days .
◦ Put an article in newspapers for official records.
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 Compulsory liquidation: it is the process where the company is declared insolvent and
seeks the help of court to liquidate it . Procedure for its winding up is:
◦ fill a winding up petition in court.
◦ It is necessary that amount of debt should not be less then £750.(Winding up by the
order of court, 2018.)
◦ According to the amount in debt the which court shall administer it is decided.
◦ If order is passed, then it is necessary to appoint the liquidator who will have the
responsibility to sale all of the assets for paying the amount of debt.
Recommendation: Firstly, it is necessary for the company that they should try to have a
conversation with creditor's to pay of the debt amount. Here, if creditor's are not willing to grant
the additional period of time then it is necessary that company should try to take the help of
creditors voluntary winding up process just because court proceeding can be lengthy which can
consumes the time of investors (Schmidt, 2018).
Case 2
Case Scenario: This was one of the case which took place between Mr Anderson and
Amber Ltd. They both had the contract between them they prior notice must be given before 12
months if Anderson wants to leave the company. But, in this case it was found that Anderson is
willing to join Beta Ltd as they are offering him more amount of money. By looking at this
Anderson breached the contract and now Amber Ltd wants to file the case against them.
ALTERNATE DISPUTE RESOLUTIONS (ADR)
It is a simpler easy and fast mode of resolving civil cases here two parties involved
having a civil issue shall not be going to the court and a consumer and a trader having disputes
can be solved by ADR. The government is in full promotion for the development of ADR system
because it does not involve courts and time consumption plus provides better services and
solutions. It is proven to be more flexible in nature, less demanding and helps to get
compensated. There are number of methods in ADR process which helps to clear the problem in
different manners (Sharfman, 2014).
Conciliation: It is the term of ADR where an conciliator is appointed who talks to both
the parties either discrete or cooperatively in order to solve the issue between them. It provides a
certain amount of advantage to the parties because they are more likely to get a result in their
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favour and have a better control over the result. These are legally bind and once the settlement is
accepted one cannot claim the tribunals claim later on.
Mediation: This is also a simple process in the first the mediator takes the general notes
on both the parties then the issue between them is discussed. Later, both parties side information
is gathered and the problems are pinpointed out by the mediator. Here, both the parties provide
their side of bargain and the best option that shall benefit both at a certain point or declares the
correct solution to the dispute and finally both the parties agree to the final conclusion (Stout and
Blair, 2017) .
Arbitration: This is an consensual process, both the parties have to agree for it. Here,
parties choose the arbitrator together and either can have separate or same arbitrator. This
process is fair and discrete in nature, the cost spent on it a lot less as compared to court. It is a
simple procedure and not much of a difficult to understand. Once selection of arbitrator is
complete they select all the further decision from the date and time of meeting and the location
for meeting. Under a fast track arbitration they set the legal date within the 30 days period of
time for the legal claim to be attained by the parties (Twomey, 2012).
Recommendation: It is understandable that there were some of the circumstances due to
which Anderson wants to change the company. But, the important thing which is need to be
consider is that it is not that easy to file the case in court to solve out any of the issues. So, it is
necessary for them to understand that they can take the help of Arbitration method which can
easily help sort out the matter in best possible manner.
CONCLUSION
Form the above file, it can be concluded easily that law and regulation have its own
importance which tells that how any of the work is required to be done. The sources of UK law is
said as the backbone of Great Britain because they are the who guides to take better decision for
business decisions. Law does impact positive as well as negatively but it depends upon the
investor that how they take the decision. The investors are required to take most of the business
decision with the help of different laws which applies on any of the business organisation. ADR
process is one of the way that can help to solve out any of the issues and problem which are of
civil nature.
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