Business Law Report: Business Law and Organisation Analysis

This report provides a comprehensive overview of business law, covering key aspects such as the divisions and sources of law, including English law, legislation, common law, and the European Convention on Human Rights. It analyzes the law-making process and its impact on businesses, using case studies like Pimlico Plumber v Smith to illustrate the application of employment and contract law. Furthermore, the report examines various types of business organizations, including sole proprietorships, partnerships, and corporations, and discusses their formation and legal implications, offering recommendations for business structures. The analysis includes the advantages and disadvantages of each type of organization, emphasizing the importance of registered companies and compliance with legal requirements for smooth business operations. The report concludes with an overview of appropriate legal solutions and references.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Divisions and Sources of Law...........................................................................................1
P2 Law making process by government which will affect the business................................3
TASK 2............................................................................................................................................4
P3 Impact of various laws on business...................................................................................4
TASK 3............................................................................................................................................5
P4 & P5 Analysis of various types of business organisation and their formation.................5
TASK 4............................................................................................................................................6
P6 Appropriate Legal Solutions.............................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business Law encompasses all the laws pertaining to administration and running of a
business. These laws govern all the rules as to how to start, run, manage, buy, sell, or close any
type of business. Business laws should have adhered by the businessmen as the lack of
understanding these laws often lead to various penal and pecuniary actions. This project report
deals with a brief understanding of nature of various legal systems, the impact of various
legislations on business along with formation of different types of business organisations.
Contractual and corporate laws are discussed in the report to address the given problem (Alix
Adams, 2016).
TASK 1
P1 Divisions and Sources of Law
English law: It is known as common law system that is comprising mainly with criminal
and civil law cases. The best part of this English law is the they all are have their individual
courts and procedure (Alix Adams, 2016).
 Advantage: A web of custom related common law is being developed over the recent
part years. Infirmity and ability to adopt to make change in community.
 Disadvantage: Compensate is only remedy for any kind of damages. Rigid are adherence
to proper form.
The English law can be categorised as:
Public Law: This is the area of law which governs the relations between individuals and
government. It covers the areas such as constitutional & administration law and criminal law
(Alix Adams, 2016).
Private Law: This areas of law governs relations between individuals rather than relation
between individual and state, for instance, tort, family law, contract law, business law and many
more (Alix Adams, 2016).
Sources of law
The law could be understood through examining its sources as the sources are the origins
of a law in a region. The UK law could be understood through four kinds of sources which are
Legislations, Common law, European Union law and The European Convention on Human
Rights (Alix Adams, 2016).
1

Legislations: These are basically the acts formulated and passed by the parliament which
are laws. The principle legislature in the UK is in London which formulate laws for the
remaining three countries (Alix Adams, 2016).
Common Law: The common law is the decisions and judgements passed by the courts of
UK. These decisions are known as precedents which are the decisions of senior appellate courts
which become part of law (Alix Adams, 2016).
The European Convention: UK is part of the European Union and being a member state
the EU's laws are having precedence over the country's laws., therefore, forming an important
source of law (Alix Adams, 2016).
The European Convention on Human Rights: Being a member of EU, the UK is a
signatory to the Convention. This convention is pertaining to human rights and the courts of law
in the UK are bound to protect the rights ensured under this convention (Alix Adams, 2016).
Divisions of Law
The court hierarchy is as follows:
 Supreme court: The supreme court was earlier known as the House of Lords till October
2009. This court is the final court of appeal in all the three legal systems pertaining in the
UK. Its judgements are binding on all the other courts subordinate to it (Alix Adams,
2016).
 The court of appeal: The court of appeal is bifurcated into civil court of appeal and
criminal court of appeal. Both the civil and criminal court of appeal are bound by the
decisions of the Supreme Court and their decisions are binding on all the other civil and
criminal courts (Alix Adams, 2016).
 Divisional court: There are various divisional courts such as family, chancery etc. but
the most commonly known divisional court is that of Administrative Court dealing in
criminal and judicial review cases (Alix Adams, 2016).
 High court: It is responsible for resolving tough and critical cases. It has three divisions,
namely – Queen's Bench, Family and Chancery which deal with categorical issues. Its
decisions are binding on the subordinate courts but not on the fellow high courts (Alix
Adams, 2016).
Advantage of Division of laws: Raise for the public awareness. Some of them are
having huge memberships.
2

Disadvantages: Outsides groups have no any contract with parliament therefore have
limited say in new laws.
P2 Law making process by government which will affect the business
The UK parliament is a law making body which consist of more than 700 members
which where elected by people by right to vote in each state. UK legislative assembly currently
holds more than 75 members. Parliament function to formulates and adopt legislation proposed
by the commission. Primary legislation comprises act of parliament. The legislation of
parliament mostly proposed by government ministers while opposition party MP's have less
chances to put their opinion for the bill (Alix Adams, 2016). The act of parliament is created in
few stages described below:-
Firstly the bill was introduced by house of commons. Such bill is like money bill,
controversial bills etc. after which parliament decide whether their should be existence of bill
and then it pass to second stage (Alix Adams, 2016).
Second stage is the stage of debate in which stage minister start the speech in parliament
then he answers the questions raised by other minister at the time of committee. There should be
more than 35 members in committee at that time after the debate over, they would have all
voting rights and after getting the majority of the votes from the other member, bill transfer to
their other stages (Alix Adams, 2016).
Third stages are basically related with understanding of the facts and matter that are
going to be covered under the bills are discussed. The bill next passes to consideration stage each
house consider that about its length significance, and facts that can be approve this the legislative
bodies cannot get satisfied (Alix Adams, 2016). The date of implementation of an act is specified
by the parliament so this is the way by which the law can affect business policy, business
strategy etc.
Advantage: Elected representative democratically as well as entire areas of law can be
reformed in one act. These bodies would have the option to delegate the law in specific areas or
authority.
Disadvantage: Lack of parliamentary time to deal with every reformed legislation such
as law on assaults.
3

TASK 2
P3 Impact of various laws on business
Case study: Pimlico plumber v Smith, 2008
The employment status of Mr. Smith was in question in this case who was a plumber
working for Pimlico Plumber during 2005 to 2011. The major contentions were whether he was
an employee or a freelancer. He has contended that the company had unfairly and wrongfully
dismissed his claims for holiday pay while unlawfully deducting his wages when he suffered a
heart attack. PP's contention was that Smith was not an employee but a self-employed. The
decision of Employment Tribunal was that Mr. Smith was not an employee for unlawful
dismissal but he was a worker for deductions in wages (Pimlico Plumber v smith, 2008).
Further, it can be considered that Smith was a plumber in PP who worked independently
as described in the contract between the parties entered in 2005 replaced in 2009 as a more
detailed one. Similarly, in case of Pegasus, new delivery vans are to be introduced in the
company so there is a need of drivers to run the delivery vans, therefore, the agreement has to be
clear and specified on the status of the drivers (Alix Adams, 2016).
Employer-employee relations are governed by employment law so that they have to
proper balance. Similarly, Pegasus purchased new vans for delivery along with hiring a number
of drivers for the same. So, the concepts of employment law are applied to the company to
develop a bond amongst the drivers and the company so in case dispute it could be resolved
amicably without initiating legal proceedings (Alix Adams, 2016).
Considering the Contract law, Pegasus has ensured in the terms of the agreement that the
drivers have to wear the company's uniform, hold Identity cards which authenticate and make
them a part of the company (Alix Adams, 2016).
It can be inferred from this case that every company should follow contract and
employment laws in order to tackle employer – employee disputes better. In Pegasus, strict
compliance of laws can be seen by the partners as they have complied with the provisions of
both the laws to fulfil the criteria of employment along with clearly stating the terms of contract
to work more efficiently (Alix Adams, 2016).
4

TASK 3
P4 & P5 Analysis of various types of business organisation and their formation
In the given task, Alex and Jay they have been guided by their accountant to set up a
registered company to run the business in smooth way. Alex and Jay had done some research
work so that the company can be formed to help the organisation to expand their business and
earn a rewarding profit. As there are different types of organisation which can be set up which
are explained below:
Sole proprietorship: A sole proprietorship is a business that is wholly owned and
controlled by only one person. Here, the owner of the concern has absolute right to manage and
take decision for the same. With some rights, there come face of unlimited liability which means
that the creditor may come after his personal assets if he is not able to pay there debts (Alix
Adams, 2016).
As the concern is small and lacks, the advantage of expansion, it is not recommended to
establish this type of organisation by the company. They are funded and controlled and by
individual businesses such as banks, various financier and different capital funds (Alix Adams,
2016).
Partnership: A partnership business is owned by two or more person who contribute
their capital consensus to form the organisation. Generally, in this type of organisation, partners
also have unlimited liability but a limited liability partnership enjoys a benefit that the partners
liability is also limited (Alix Adams, 2016).
As a suggestion to Pegasus, this type of organisation is also not helpful for expansion as
it would not give better opportunities. They are funded by legal bodies and in some situation,
there are having own trading profits that consists of taxes, fees and transfer of money from one
level of government (Alix Adams, 2016).
Corporation: A corporation is a business organisation that has a separate legal
personality from than their owners. The owners or the shareholders enjoy a limited liability in
this type. The BOD of this concern have the power to make whole decision regarding the
management which is further adopted by the shareholders is positive. This form have two types
which are Public or Private. It is best suggested that the company should be registered to have
there work done in smooth way. A registered company have its own legal rights and also have
5

some obligations to be followed (Alix Adams, 2016). Voluntary sectors are being funded by
national lottery and from income earn from other investments.
To form a registered company first thing that is to be done is to bring in the consensus of
the directors to form a company. After making the mind to register a company the bye laws of
the companies are to be formed which include MOA, AOA these are the documents which form
the constitution of the company. A companies memorandum should be accordance to its
requirement to formulate. These documents should be stamped and signed by the directors and
would be given to the registrar for registering it. After checking the documents if registrar is
satisfied will give certificate of incorporation through which it can start its operation (Alix
Adams, 2016).
As in the case of Salomon vs Salomon the company acquires a separate legal
personality from those of its members as through which it can enter into any contract within its
name and can sue and sued by others. The company still remains in existence despite change in
its membership and it can only be dissolved by the order of court (Alix Adams, 2016).
As a conclusion Pegasus should form a registered company by following the guidelines
as given in law as it would help in expansion and would entertain to raise fund from its
shareholder for its ceaseless running (Alix Adams, 2016).
 Advantage: It would be important for the public, private and other company to make
their rules and policies before formulating any new plan.
 Disadvantage: Sometimes, it is difficult private company cannot be able to deal with the
various regulations that developed by the legal bodies (Alix Adams, 2016).
TASK 4
P6 Appropriate Legal Solutions
As per the mentioned case, Pegasus have been aware about all legal issues that can be
resolved by filing petition in the court system to deal with the litigation. But, it has been seen that
by involving into these process, company need to spend more time, confusing and consuming for
the parties. After making proper evaluation about the facts and legal issues owner of the
company need to make analysis by the use of ADR process. They are more cost effective and
less time consuming for the company (Alix Adams, 2016).
6

ADR often saves plenty of money and spend all the settlement. Under this process
various types of activities are required to be followed. It is crucial for the parties to make proper
decision that can be in the favor of them (Alix Adams, 2016). This Alternative dispute resolution
can provide greater satisfaction and improve relationships among the two parties. Some of them
are mentioned below:
Arbitration: It is one of the effective process in which a third party can called for an
arbitrator for the purpose of resolving the issues after getting mutually agreed on the decision of
another one. The selection of this particular method tends to provide parties certain right and
option for a private dispute resolution stages rather than going for court. It can be either binding
or non-binding that means that parties waive their right to a trail and accepted the arbitrator’s
decision as final. Basically, there is no any right to appeal an arbitrator decision. In case, parties
want another person to decide the results of dispute for them but could like to avoid the
formality, time and expenses of a trail. It can be vital for the complex matters where the parties
want to make decision maker who has training or experience in the subject of facts of the issues
(Alix Adams, 2016).
Advantages: In accordance to Arbitration process, both parties are associated with each
other thought or decision to hire arbitrator. Pegasus can solve their issues by the consultant of
arbitrator. As it is less expensive as compare to court. The company can resolve their problem
with less time and money (Alix Adams, 2016).
Disadvantage: In case, arbitration is binding, both side parties give up their rights to an
appeal. It means that there is neither any kind of opportunity to resolve what one party can feel is
an erroneous arbitration action (Alix Adams, 2016).
Legal advice: After making proper analysis of case, it has been found that ADR process
is more suitable for the Pegasus company as it has plenty of option to overcome all the issues
that are arises within the company. Pegasus need not to pay addition cost for hiring any other
parties or going for court because it is more time consuming. As, court take maximum time as
well as cost to resolve other single issues for so many years. Thus, it is beneficial to avoid going
to court. The best ways are to either solve through hiring arbitrator, mediation, negotiation or
cancellation. The methods of dispute resolution judicial trail would be the last option for any of
party of company to resolve their dispute. As, Arbitration is much more effective other than the
other sources (Alix Adams, 2016).
7

CONCLUSION
From the above project report, it has been concluded that business law is essential ways
that can assist an organization or parties to make correct decision in coming time regarding the
business. For this purpose, various sources of law and cases as well as legal obligations are
required to be taken into account. This is fundamental for an organisation to comply basic
employment and contract law that can help in avoiding disputes. Also, there are numerous
methods to resolve conflicts such as negotiation, arbitrary etc. that parties can come up to resolve
problem as per both group's consideration.
8

REFERENCES
Books and journals
Alix Adams, 2016. Law for business students Ewan MacIntyre, Business law. The Law Teacher.
51(4). pp.527-529.
Online
Pimlico Plumber v smith. 2008. [Online]. Available
through:<http://thestudentlawyer.com/2018/03/19/a-closer-look-at-pimlico-plumbers-v-
smith/>.
9