Understanding Business Law: Sources, Creation Process & Organizations

This report provides a comprehensive overview of key aspects of business law in the UK. It begins by defining and explaining various sources of law, including common law, legislation, EU law, and human rights law, detailing the law-making process and the roles of statutory and common law in courtrooms. The report then briefly explains company law, employment law, and contract law, followed by an analysis of the legal formation, management, and funding of different types of organizations such as sole proprietorships, partnerships, limited liability partnerships, and limited companies. Finally, the report offers recommended suggestions based on case laws. Desklib provides students with access to this document and many other solved assignments.

Business Law

Table of Contents
Introduction ................................................................................................................................................3
Task-1..........................................................................................................................................................3
P-1. Define several sources of law..........................................................................................................3
P-2. Properly explain procedure of creating law and define purpose of statutory and common law in
court rooms............................................................................................................................................4
TASK-2.........................................................................................................................................................5
P-3. Explain company, employment and contract law in brief...............................................................5
Task-3..........................................................................................................................................................6
P-4. Legal formation of different organizations......................................................................................6
P-5. Explain managing and funding of different organizations...............................................................7
Task-4..........................................................................................................................................................8
P-6 Recommended suggestions towards case laws mentioned below...................................................8
Conclusion...................................................................................................................................................9
References ................................................................................................................................................10

Introduction
The sources of law are extensively discussed in English law. In addition to the legislative, there
is also common law, human rights law, and EU law. They all have a significant impact on
identifying the source of this crucial legislative tool. Similar to this, the UK government has a
complex process for incorporating laws. All the deliberation is done in both the houses and then
it is moved forward to the head of the state for admitting law. Both statute law and common law
are crucial components of the British justice system. The former is decided upon by the
ministers, while the latter can vary from case to instance. There are numerous business entities
that fall under English law, but the most common ones are the sole proprietorship, partnership,
limited liability partnership, and limited company.(Craik, N., 2020)
Task-1
P-1. Define several sources of law
The genesis of law is all there is to Source of Law. It is actually where the foundation of that
nation's legal system is derived and then developed. Law may have an unwritten, written, or both
sources. The many variables that affect and influence how the subjected state law organs
contribute are the sources of law. The English Law can be categorically distinguished as being of
indigenous or foreign origin, unlike the laws of any other country. The term "source of law" can
also refer to primary or secondary sources. The sources of the English legal system are many.
Legislation, Common Law (Case Law), Human Rights Law, and EU Law
 Common Laws-The rules and regulations that are created by the judiciary rather than the
parliament are known as common law. The judgments, case laws, remarks, decisions, etc.
are regarded as the main sources of law in the English legal system. The judge-made
legislation in English law are published in law reports. There are numerous similar
reports, including the English Reports, Weekly Law Reports, All England Law Reports,
and Law Reports of Appeal Cases, among others.(Wellings, B., 2021) The courts below
these aforementioned courts must take note of these rulings because they serve as
precedents.
 Legislation - Any nation's legislation is created by its lawmakers through a
Parliamentary act. The Act of Parliament is always changing, thus researchers must
undertake in-depth analyses to enable the creation of new laws and changes. The Act of
Parliament merely specifies how the laws are passed, which can only be done by a
designated individual. This legislation is the most authoritative and cannot be contested
in any court of law. There are two categories of law. Specifically, the primary law, which
includes parliamentary acts, statutes, and delegated legislation ( where authority is

delegated by the ministers). There are many different types of legislation, including
bylaws, orders of the council, and statutory instruments. In English law, the parliament
has absolute power and may at any time repeal a legislation.(Christie, D.,. and Viven, J.,
2022.)
 European Laws: The European legal system also serves as the foundation for a broad
range of international accords. These agreements or treaties ought to be noted as
significant sources of law. the Command Papers, Treaty Series, and other sources all have
equal records of them.
 Human Rights Law - A citizen must be given certain rights under the human rights law
just because they are a person. These serve as a source for UK law as well. The Human
Rights Act of 1998 is merely a UK statute. The secondary sources of law also contain a
large number of legal writers' and analysts' textbooks, commentaries, digests, etc. When
researching the law, it is equally important to consider the legal experts' perspectives.
P-2. Properly explain procedure of creating law and define purpose of statutory and
common law in court rooms.
Government's Crucial Role in Lawmaking The government is a key player in the process of
creating laws. In English law, the legislature's determination and labor are what create the laws.
In accordance with English law, there are two chambers of parliament: the House of Lords and
the House of Commons. The houses have a process they adhere to when passing laws through
debating, researching, or making ideas. Any law that is to be produced must be put into writing
after careful consideration, a process known as "drafting." The resulting written document is
known as a bill. (Hardman, J., 2022.) Before the Queen, the head of state, gives her approval,
the law must first pass through several stages in parliament. The following are the steps involved
in the bill receiving assent:
 First Reading – This is the official stage in which the proposed measure is read in the
house in which it is presented.
 Second reading—A controversial stage where the bill is presented for discussion in
order to consider amendments.
 Committee Stage - A committee is formed to discuss the proposed changes and see the
project through to completion. This round of discussion has no time restrictions. In the
house where it is presented, the finished measure is then put up for a vote.
 Report Stage: Following the final examination, votes must be cast, and a majority is
required in this house for the bill to proceed on to the next house for consideration before
being presented to the Queen.(Armour, J. and Sako, M., 2020)

 Third Reading: The bill may now include revisions when it is put out in the other house
and be submitted back for approval. Following this review of agreements, the proposed
measure is either approved, rejected, or put back into place. So it seems to reason that this
procedure would be called the "ping pong process."
 Royal Assent - The measure becomes a part of the act of the parliament after receiving
the monarch's approval.
Statutory law and common law Court of Justice position - The common law and statutory laws
coexist in English law to form the legal system. But for justice to be done, a combination of both
is essential.
 Common Law - In English law, there may be two different types of case law. In the
former, where there is no law and the court decides on its own initiative, judges must use
their judicial judgment to weigh the merits of the relevant statutes, regulations, rules, etc.
This procedure can be helpful because the court of justice has a lot of prior cases to
review from in the event of a question involving a similar legal issue. And since one
common law rule is superior to another, the courts must adhere to it. These common laws
also have a binding or persuasive value.
 Statutory Laws: This procedure involves the creation or selection of a law by the federal
or state governments. This covers a wide range of topics, including laws, ordinances, and
rules. The laws that are passed to satisfy the needs of all citizens. The statutes are already
in place, so the courts can quickly review them and take appropriate action. They are
previously mentioned in writing and can be used in any situation that they relate to. It is
simple to achieve justice. If there is any change with evolving time, the laws can be
updated and accordingly made or amended.(QC, M.R.H., 2022.)
TASK-2
P-3. Explain company, employment and contract law in brief.
 Company Law, 2006 - The UK's Company Law is a very powerful legislative tool, and
this act contains all of the governance guidelines and commercial legislation. This law is
quite innovative and offers protection to all of the participants. The UK Companies Act
of 2006 includes highly clear reporting requirements for all financial activities, making it
impossible for others to defraud and bribe the authorities. The provisions outlined in the
Companies Act of 2006 are neither constant or cohesive; rather, they occasionally alter or
are amended to better suit the needs of particular parties. These are accomplished through
what are known as statutory requirements. Directors' compensation is a legal option for
all corporations. Similar to this, the businesses must be registered in accordance with the
2018 Companies (Miscellaneous Reporting) Regulation. The annual reporting of each
year is also done. In large enterprises with a staff size of more than 250 employees, the

director report is required. The Corporate Governance Code requires that corporate
governance be carried out, and it also mandates that the corporation provide a statement
of the Directors Report.(Werneck, B. and Saadi, M. eds., 2019)
 The Employment Law -This was a change to the earlier labor regulations that were
included in English law and now covers a wide range of scenarios, including redundancy,
maternity leave, unjust and unfair terminations, and more. In cases of contractual
employment contracts, it is crucial to penalize the offender. It establishes and
acknowledges the obligations and rights of both employers and employees, as well as
their recognition and de-recognition. This act also recognizes part-time employees. This
code also protects the rights of self-employed people and workers. Both employers and
employees are required under employment law to maintain a safe workplace. They offer
the rules that must be followed in any agreement made between an employer and an
employee.
 Contract Act, 1999 - Under English law, the employment of an employer and an
employee is protected. The term "contract" refers to a series of agreements that are
protected by a third party and made legally enforceable by a court. With the help of this
set of contracts, the connection between an employer and an employee is now valid and
simple to understand in the event of a default. The agreement clarifies issues like who
will bear responsibility in the event that the employer-employee relationship is broken.
Task-3
P-4. Legal formation of different organizations.
Business organizational structure aids in determining tax implications, one's capacity to obtain
capital, and the scope of one's personal obligation. We can identify an organization's tax and
legal ramifications with the aid of its company structure. There are several different forms of UK
business structures recognized by English law.
 Sole trader- It is quite straightforward and easy to register a business using this type of
business structure. The lone proprietor must certify that the business is conducted solely
and register with Her Majesty Revenue & Custom. In all business-related matters, the
lone proprietor has sole duty and obligation. As a result, the person is entitled to all
business profits, and only by filing a Self Assessment Tax Return is that person
responsible for handling all responsibilities.(Kohlhoffer-Mizser, C., 2019.)
 Partnership - In this type of business structure, two or more people must join forces and
come to an agreement so that they can split any gains or losses incurred by the company.
People tend to share all the risks, costs, rewards, obligations, and liabilities that occur in
an organization when a corporation is organized as a partnership. In a commercial
organization, each partner is personally liable for the faults of the other partners. The tax

obligations are often split equally between the partners. Likewise, decide on a share so
that the benefit, if any, can be shared.
 Limited Liability Partnership - Although a limited responsibility partnership and a
partnership are strikingly similar, the latter's liability is based on the number of shares a
partner has put in that specific partnership. Her Majesty Revenue & Custom must receive
a registration form for this collaboration. The LLP that is subsequently created may
consist of two individuals or a firm. The parties' shared profit and loss is predetermined
exclusively in the agreement they have drafted.(Gil, N. and Pinto, J.K., 2018.)
 Limited Company - This type of organization is described as a privately controlled
business that the directors can run. The corporation can correspondingly keep the gains
and losses incurred as a result. These businesses can also have share or guarantee
limitations. Compared to the other forms of partnership discussed, they offer a larger
protection.
P-5. Explain managing and funding of different organizations.
It is crucial to generate money at every stage of the business organization even if it might be
highly taxing. When it comes to earning money for a business organization, there are numerous
financing options available. Such an investment can be made for the long term or the short term.
This investment may take many different forms, including:
 Business Grants or Loans - Cash inflow may occur at different stages of the business
organization in order to support the financial position of any organization. The British
government or the European Union may accept these grants. And these grants might be
distributed based on the requirements of the company. These grants may be used for
locally focused community initiatives.
 Venture capital and angel investors - Such financing is particularly flexible because it
involves a third party who, in exchange for giving the company money, may also want to
purchase shares in the company. While both venture capital and angel investing serve the
same purpose, there is a difference in the quantity involved because the former pays or
invests a large sum of money while the latter does not. Similar to venture capital
investors, angel investors make investments at the early stages of a business, but beyond
the start-up phase for venture capital investors. (Deb, E., 2022) Most of the time, this type
of finance does not produce the desired level of return. One needs strong networking
skills in order to attract strong angel investors.
 Crowdfunding and peer-to-peer lending - Small and medium-sized businesses
typically use crowdfunding or peer-to-peer lending. In this instance, the investors are also
the owners of the equity in the particular company. Both the investor and the corporation
can profit from this type of finance because one can create returns and the other can

easily incur expenses. Such funding must include provisions for loan repayments taken
by an organization. (Edwards, L., 2021.)
 Short-term Loans - A solid credit system can produce this money. Such money can
subsequently be used to purchase priceless things and generate enormous revenue. Online
payments today can quickly generate significant amounts of money for credit facilities.
 Investor-focused crowdfunding - In this type of funding, the people who already
support the company start funding it. And in today's world of consumers, such
fundraising results in supporters later on in the company becoming stock holders.
 Family and friends - One's family and friends are always there to support them when
they need money or funding for a business venture. However, when someone gives
money, it is important to remember to give it back to individuals who have limited
income sources, as failing to do so may cause the connection to break down.
Task-4
P-6 Recommended suggestions towards case laws mentioned below.
Case 1: Gorden should seek mediation in this type of conflict resolution since parties have
complete control over the proceedings and the mediator is merely acting as a facilitator and
cannot in any manner issue orders. even though it is not a binding contract. It is a voluntary
process hence in no way the party is forced to follow the settlement so occurred. The need for
ultimate control and the tendency of the parties to preserve positive relationships long after the
issue necessitate mediation.
Since all the requirements of the contract have been met, Gorden is entitled to receive payment
as a result of the contractual relationship between the parties, which is governed by the Contract
Act of 1990. Gordon may seek redress under contract law, and under employment law, it is the
employer's responsibility to pay the employee's wages. The Employment Act of 1996's Sections
7, 8 describes the obligations of the employer. (Cheong, B.C., 2020) As is expected in Mr.
Gordon's case, Section 13 also makes room for undetermined salary or wage deductions.
Case 2: Jane, as the consumer, should not be responsible for the additional charges made by
Virgin Media. Since an offer and acceptance from both parties are required for a contract to be
valid, Virgin Media provided internet and phone service for both lines, but if Jane didn't receive
the extras while still being charged, the offer was invalid. Jane agreed to the entire package, and
while this is not her fault, Virgin Media has not provided enough service. The service provider
must only charge for the amenities that were given to the customer. In case of constructing a
contractual relationship, the offer, acceptance, consideration, and intention of the parties can be
summed up as the contract's essentials.

Case 3: To avoid having to dissolve the business, BlackHorse Limited should make a strategy to
pay all of its creditors for past-due payments. In a similar vein, pressure can lead to creditor
voluntary liquidation. For the efficient operation of the business and to prevent the firm from
going bankrupt, (Chinwuba, N.N., 2020) The BlackHorse Limited may appoint an administrator.
To preserve the firm's operational control, they can also sign a corporate voluntary agreement.
Negotiations between the parties, i.e., the creditor, are required to repay the money once owned.
 Legal dispute recommendation: In English law, courts are crucial to maintaining order
and a smooth operation. There are numerous alternative dispute resolution techniques,
including (I) mediation, (II) conciliation, (IIII) negotiation, and (IV) arbitration.
 Negotiation - In negotiation, a person referred to as a negotiator employs a variety of
techniques to resolve the conflict between the two parties. These mediators are objective
third parties who use a variety of techniques, including communication, to reach a
settlement. This process' confidentiality is solely based on trust.
 Conciliation: The parties interact with the conciliator both individually and collectively
during this process. The conciliator serves as an intermediary between the parties,
reducing conflict while also enhancing communication and using various strategies to put
an end to party disagreement. The consenting parties are not bound by such an order or
judgment. Such an agreement's confidentiality must adhere to legal requirements.
Conclusion
As was mentioned above, there are many different types of legal sources that can be used in
English law, therefore understanding them is crucial. Along with the home, common law is also
incorporated. Law's decision-making procedure is equally in-depth. The process is approved by
both houses and then goes to the queen, demonstrating the importance of careful consideration
before a law is enacted under English law. If one is not pleased with the current measure,
adjustments may also be made. Both common law and statutory law contribute to the system's
efficient operation because the former can actually express an opinion on a subject that has not
been debated, whilst the latter can be discussed as already indicated in the statutes. To offer the
person an idea of what should be the tax and legal requirements in any business structure, the
legality of the organization and how it is handled and funded is also crucial.

References
Books and Journals
Craik, N., 2020. The duty to cooperate in the customary law of environmental impact
assessment. International & Comparative Law Quarterly, 69(1), pp.239-259.
Wellings, B., 2021. Brexit, nationalism and disintegration in the European Union and the United
Kingdom. Journal of Contemporary European Studies, 29(3), pp.322-334.
Hardman, J., 2022. United Kingdom historical viewpoint. In Research Handbook on Shareholder
Inspection Rights: A Comparative Perspective. Edward Elgar.
QC, M.R.H., 2022. Dr Folarin Akinbami, Lecturer in Commercial Law in the School of Law,
Durham University, UK. Mr Andrew Campbell, Director, Ashridge Strategic
Management, Lon-don, UK (Doctoral dissertation, Google).
Werneck, B. and Saadi, M. eds., 2019. The public-private partnership law review. Law Business
Research Limited.
Kohlhoffer-Mizser, C., 2019. Conflict management-resolution based on trust?. Ekonomicko-
manazerske spektrum, 13(1), pp.72-82.
Gil, N. and Pinto, J.K., 2018. Polycentric organizing and performance: A contingency model and
evidence from megaproject planning in the UK. Research policy, 47(4), pp.717-734.
Edwards, L., 2021. ‘No Jab, No Job’? Employment Law and Mandatory Vaccination
Requirements in the UK (preprint).
Cheong, B.C., 2020. Context is the most important factor: one-man companies and corporate
attribution in Singapore. Oxford Business Law Blog, June, 12.
Chinwuba, N.N., 2020. Recent developments in the application of the doctrine of vicarious
liability by United Kingdom courts. Nnamdi Azikiwe University Journal of
International Law and Jurisprudence, 11(1), pp.137-148.
Deb, E., 2022. International Business Law-Critical Review on Corporate Governance in
UK. Available at SSRN 4074105.
Armour, J. and Sako, M., 2020. AI-enabled business models in legal services: from traditional
law firms to next-generation law companies?. Journal of Professions and
Organization, 7(1), pp.27-46.
Christie, D., Saintier, S. and Viven-Wilksch, J., 2022. Industry-Led Standards, Relational
Contracts and Good Faith: Are the UK and Australia Setting the Pace in (Construction)
Contract Law?. Liverpool law review, pp.1-24.