Business Law: Legal System, Implications and Organisations

This report provides a comprehensive overview of business law, starting with an introduction to the UK legal system, including its sources, the role of government, and the application of common and statutory law. It critically reflects on the strengths and weaknesses of the legal system. The report then outlines key legislation, regulations, and standards that new businesses must be aware of, including tax codes, employment law, and environmental norms. It delves into various laws affecting businesses, such as contract law, law of torts, copyright law, and employment laws, analyzing their implications. Furthermore, the report explains the legal formation of different business organizations, including sole proprietorships, partnerships, limited liability companies, and corporations. It also discusses the management and funding aspects of these organizations, including issuing shares, bonds, and debentures, and the roles of sole proprietors and partners in funding and management.

BUSINESS LAW

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INTRODUCTION
Law basically means all rules and regulations established and enforced by a governing
body. All the business functions will be affected by the certain laws in some or other manner.
Business law also affects every business from its incorporation to its dissolution. Business ethics
is also a term which is concurrently used in this aspect however they both differ in their
meanings and nature. Business ethics refer to the moral concern that occur in a commercial field.
Business ethics could be normative or descriptive control both. The unit begins with the
discussion upon the existing legal system of UK, various sources through which law was
evolved, how the government plays a significant role in law making and how doctrine of
precedent and laws passed by legislature will be applied to the business organisation. The
research will further explain about the implications of various other laws passed by the UK
Parliament which has to complied by the business organisation.
PART 1
1. Explanation of the legal system, different sources of law, the role of government in law-
making and how statutory and common law is applied to businesses.
In United Kingdom the system of Constitutional Monarchy exists. The United Kingdom
is divided into four countries namely England, Wales, Scotland and Northern Ireland. So it is
quite evident that some law applies to one country and some in others. It has been observed that
England and Wales follow a system of common law which involves the following of doctrine of
precedents as well the laws are passed through its legislature. So, a law is established only when
a legislation is passed by the Parliament (Balch and Balabanova, 2017).
The two houses of the UK Parliament are “House of Commons” in which the members
are elected through general election whereas in “House of Lords” the members are appointed.
The sources of law may be characterised into two main categories Primary and Secondary:
Primary Sources: These are the sources that has helped in basic formation of law which
consist of various kinds of sources under it and they are explained as follows:
Legislation: In this the laws that are being created is being formed through following
process and getting Royal assistance over it.
Common Law: This source is very important as it gives judiciary power to make laws by
using the judgements that has been passed in landmark cases.(Begikhani and Gill, 2016).
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Secondary Sources: These sources are generally the legal writings. Various authors try
to interpret the laws through textbooks or commentaries by referring various judgements and
their own understanding of law. This sources includes following things
Journals: Under which articles related to laws are being presented. This helps in making
analysis of law to be done in proper manner.
Books: This is helpful in making understanding of laws that are formed in better way.
Such legal books helps students in studying law as a subject in appropriate manner.
Parliament of UK has been given powers to form laws for which they are required to
follow proper procedure for enacting it. This is based on three reading that is explained as:
First reading: Draft in the form of bill is presented. No discussion takes place over draft
presented.
Second reading: Presented draft is being discussed in proper manner. All points are
being marked out. Also voting is done in order to gain majority.
Committee stage: In committee stage the committee will go through the bill and after that
submit its report suggesting various amendments in the bill.
Third reading: Again the voting will take place and if the bill gets the required number of votes
it will be sent for the approval to the other house where also voting will be done.
Royal Assent: In this sign of monarch is required in order to make bill a permanent law. This
power is been given to him under the Royal Assent Act.
Common law is basically that law which applied on the basis of precedents which means
that judgement in a landmark case can be used as a law in the similar case that occurs in future.
Statutory laws they are considered to be permanent laws that are being used by courts to
give appropriate judgement in a case. These laws can be used as per there applicability in a
particular only(Blackham, 2016).
2. A critical reflection of the legal system using examples to demonstrate strengths and
weaknesses.
UK follows the system which is based upon common law. Due to the dynamic society
there is need of various laws so that the society can be governed in a smooth and efficient
manner. The major strength of the system is the separation of the parliament from judiciary. This
separation has lead to the Independence of Judiciary. As the British Constitution is unwritten &
unmodified it is easy to amend it when needed which makes it a flexible Constitution. The one of
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the fundamental principle of UK Constitution is to follow the Rule of Law which means “No one
is above Law”. Nowadays people are also getting more aware of their rights which is also
helping in the development of legal system.(Blackham, 2016).
3. An explanation of the key legislation, regulations and standards that a new business needs to
be aware of
While running a business there are several laws and business legislations involved. They
vary as per the size and structure of the business. Legislations refer to the basic laws which the
business need to follow. They affect the employer-emplopyee relationship. Regulation means a
rule or any directive made and maintained by authority. Some of the regulations on businesses
include Tax code meaning company registered under the UK Companies Act have to pay taxes.
Then there are Employment and Labour Law. These requirements are in respect with working
hours and wages, workplace safety and health, Equal opportunities, Employee Benefit Security.
Along with that a business is also required to be in compliance of various Environmental norms
and make sure to meet the requirements. All three of them the legislations, regulations and
standards are interlinked and at times used interchangeable (Bell, 2016). They define the scope
of the business and the legal implications concerned with them. The aims and objectives of all
these legislations, regulations and standards is to make sure that all the organisations must
follow the business ethics. It is also the responsibility of the business organisation to take proper
measures for the health of their employees and ensuring the safety of its consumers.
4. Different law which businesses have to follow and analyse their potential implications on
businesses.
Contract Law
The contract can be defined as a valid legal agreement which determines the rights &
obligations of both the parties. Hence, a contract acts like a private statute which in turn explain
the parties the agreement that they owe each other. A contract does not have to be necessarily in
writing. The laws and regulations which govern the business and contract laws are ever changing
and complex. There are both somehow related to each other and are constantly affecting the
manner in which the contracts are formed. In business, contracts play a vital role as they outline
the expectations for both the parties (Guentner and et. al., 2016).
Law of Torts
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Tort is considered as a civil wrong which is also known as a Judge Made Law. To get
damages under this law it is necessary to show that the person because of whom the damage has
been done was owing a duty of care towards the sufferer. In business organisation generally the
most used tort in which damages are provided is the Negligence. To prove negligence it must be
proved that there was a duty, there was a breach of that duty, the loss suffered was due to that
breach of duty and the the the loss suffered was reasonable foreseeable. Here it is the possibility
that one business suffers because of the negligent act of the other business or the any of its
customers suffers. In that case the compensation will be provided to the sufferer.
Copyright Law
Copyright law covers the original content which is created by media firms, writers or
journalists and resolves the issues who generate that content. It mainly covers the rights of the
creators of literary, dramatic, musical and artistic works and control the ways in which their
material may be used. Under the UK law the provisions relating to Copyrights are governed by
the Copyrights, Designs and Patents Act, 1988. With this the creator of the original work is
empowered to control the manner in which his original work may be circulated. Copyright
belongs to the person who creates the original work and in case of employee the employer is the
true owner (Hooghe, 2017). In UK, copyright is applied automatically and need not to be
registered. Being a copyright owner he is given moral or economic rights to their work. A
copyright may also be transferred by way of assignment or transmission and only the authorises
writer or the licensee have the right to use the original work.
Laws Related to Employment
It is necessary for the business organisation to adhere to the various employment laws
which determines the relationship between the employer & employee. While employing
employees in the business it is must for every employer to follow the minimum wages rules &
regulations. Also it is the responsibility of the employer to make sure that employees are working
in a safe workplace. At the time of employment also all the duties,allowances and information
about other perks should be intimated to the employees. It should be the duty of the employees to
do all their assigned duties in a sincere manner and as per the directions given by the employer.
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5 Explain how different types of business organizations are legally formed
Business organizations are being there and are related to trade activities that has been to
be done by them. Such structure is dependent upon the ideas related to business. Further it has
been explained as follows:
 Sole proprietorship: These are the organizations that is being run by an individual or a
single person is considered to be the owner of it. Such persons are known as sole
proprietor. For formation of these organization no legal document is required only
HMRC number (Weeks, 2018).
 Partnership: These organization is being run by partners together for achieving of
common goals and objective of earning profit. To form these organizations no legal
document is required until agreement is formed.
 Limited liability Company: Such organizations is being given a rebate in terms of tax
and agreement formation id required. In this all documents are required to be submitted
in the Companies House and the after registration with verification only such companies
can be opened.
 Corporation: The main purpose of these organizations has to be provided over
benefiting and providing substitution of services to its customers. These organizations
sell their shares to public and all the stakeholder are the owner of it. So, decision taken by
them is followed.
6 How various organizations are managed and funded
Various ways are there for the companies to increase the fund and they are:
1. Issuing of shares this means shares are being sold to public in an corporation which
makes its funding possible.
2. Issuing of bonds and debentures, taking loan from, bank is considered to be concrete
source for generation of funds.
3. Sole proprietor funds are difficult to be arranged. Still they can take loan from friends.
4. In a partnership firm it is the responsibility of partners to generate funds that can be done
by taking loans or doing investment within business
Management of various organizations has been explained as follows:
1. Sole proprietor is being managed by the person who is the owner and all things has to be
managed by him. All problems related to business is being handled by him only.
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2. Partnership is being managed by the partners that is running the organization and all
profit and loss has to be managed by them. In this partners has to manage all activities
related to business.
3. Limited liability company in this the management is being done by the directors that has
been selected to perform activities under such organization. Directors takes all important
decision regarding business.
4. Corporation in these the stakeholders are the owners and they are having all the
responsibility of taking decision regarding the working of an organization.
PART 2
1. Brief Overview of Contract Law, Employment Law and Company Law
Contract Law: Contract law is the law which will be responsible while making any
agreement between two or more parties. This law will identify the rights and liabilities of the
parties as per the terms and conditions of the contract. This law also plays a major role while
finding out whether all the elements of a valid contract are present there in the agreement or not.
If any dispute will arise between the parties in future this law will be used to solve that dispute.
The major essentials of forming a valid contract is that, “There must be an offer from one side”,
“The offer must be accepted by the other party” and “The presence of consideration is must”.
While entering into the contract it is must that both the parties must be having the “Free Will”.
Employment Law: It is the duty of the employer to ensure that his staff which is
employed in the business organisation is working in a safe environment and all the precautions
which are necessary for the good health of the employees (Lourenço and Turner, 2019). There
are various employment laws which an employer must comply of related to the wages of
employees, work conditions at the workplace, laws concerning maternity leaves etc.
Company Law: While incorporating or running day to day activities every company in
UK has to follow the certain laws legislated by the UK parliament. One of the major law which
regulates the companies is Companies Act 2006. This act will regulate the company from its
institution to its dissolution in various aspects.
2. Salient Legal Points of Each Case
Case 1: The laws which are involved in this given problem are law related to contracts
and the laws related to the employment. There was an agreement between employer and
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employee which talks about the deduction in the amount of the salary because of the loss facing
by the company for the 3 years (Miller, 2016). Now when the company came in the profit the
employee seeks to claim the amount of salary for the period mentioned in the agreement.
Case 2: The given problem talks about the contract law in which broadband connection
has been bought by the purchaser but due to no proper installation done and the charges of that
period has been imposed upon the consumer. This given problem id given to determine the rights
and obligations of both the parties.
Case 3: The question here arises regarding whether the owner of a company can avoid
the compulsory winding up which has been filed by one of the creditors due to non-payment of
the existing debt.
3. Suggest an Appropriate Legal Solutions to Each of the Problems
Case 1: The employee (Gordon) here can demand the salary of the current year i.e. 2017
but cannot demand the salary of previous year that are 2015 & 2016. There is only one legal
remedy through which the employee can get his salary and that is trying to solve their dispute by
the way of Alternative Dispute Resolution.
Case 2: Here the consumer (Janet) is not under any legal obligation to pay the due
charges to Virgin Media as proper installation was not done ( Omar, 2016).
Case 3: The only legal remedy lies with the Blackhorse Ltd is that either they can pay the
existing debts or settle their dispute with the creditor through the way of ADR.
4. Provide Justification for the Advice and Solution Given
Case 1: As the contract which was made between employer and employee was made
with free consent, thus each party has to follow the terms and conditions of the agreement. As it
is written in the contract that the employee cant demand the salary because of the loss in the
company, now even after the company is in profit, the employee can only demand the salary of
the current year but not previous year.
Case 2: The seller of the internet connection here is at fault because it has not obliged the
terms and conditions of an agreement (Riefa and Willett, 2018).
Case 3: Due to more complexity in the legal formalities of winding up that's why it is
advisable to adopt for the ADR methods to solve the existing dispute.
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5. Compare and Contrast the Effectiveness of these Recommendations Given in Presentation
As traditional legal proceedings in a court of law is a process which takes too much of
time people are more aligned to choose various Alternative Dispute Resolution methods for
resolving their disputes. Also it is economical as compared to the legal proceedings. The major
ADR methods are Arbitration, Negotiation and Mediation (Seiler, 2016). Award given by an
arbitrator will be binding upon parties whereas in negotiation and mediation it will be just a
suggestion for the parties and f the parties does not come to a convincing solution, they can
approach the court. As Arbitration is a formal process while negotiation and mediation are
informal in nature.
6. Evaluation of the Appropriate Legal Solutions in Comparison with Alternative Legal Advice
Case 1: The issue between employer and employee can be resolved through negotiation
in this case to reach an efficient solution.
Case 2: With the help of mediation the consumer and the seller can solve their disputes
and the mediator will help both the parties to reach a common solution (Peterson and et. al.,
2016).
Case 3: Here in this case the best option will be to adopt the arbitration proceedings so
that the creditor can get his money. Also it will be helpful to avoid the compulsory winding up.
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CONCLUSION
Each business has to comply with various business laws as per their organisational
structure. These laws are framed for the purpose so that business can carry their activities in a
smooth manner. These business laws are also beneficial for the employees of the organisation as
well as the customers so that the owners of these business don't infringe the rights. The various
legal formalities which starts at the time of institution of a business till the time of its diddolution
will take place as per the various legislations passed by the legislature.
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REFERENCES
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