Business Law Report: UK Legal System, Business Organizations and Law

This report provides a detailed analysis of the UK legal system and its impact on businesses. It begins with an overview of the UK legal system, exploring its sources of law, including Parliament, EU law, common law, and the European Convention on Human Rights. The report then assesses the influence of statutory and common law on businesses, highlighting the importance of compliance. It further examines the impact of employment, contract, and competition law on businesses, offering insights into their implications. The report evaluates the effectiveness of recent legal reforms and differentiates between legislation, regulations, and standards. The second task examines the formation of different types of business organizations, such as incorporated and unincorporated entities, and their legal formation, management, and funding. It also presents the advantages and disadvantages of these formations, followed by recommendations for resolving disputes using alternative dispute resolution methods. Finally, it compares and contrasts different sources of legal advice, concluding with a summary of the findings and recommendations for businesses operating in the UK.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Explain the nature of UK legal system by looking at different sources of law in UK................1
Assess the potential impact of the law on a business that how statutory and common law
applied in the UK courts.............................................................................................................2
Potential impact of the law such as employment, contract and competition law on client’s
business.......................................................................................................................................3
Evaluate the effectiveness of the legal system in terms of recent reforms and development ....4
Differences between how legislation, regulations and standards could impact their businesses4
TASK 2............................................................................................................................................5
Examine the formation of different types of business organisations, such as
incorporated/unincorporated, unlimited liability are legally formed..........................................5
Illustrate with an explanation on different business organizations are managed and funded.....6
Advantages and disadvantages of the formation of different types business organizations.......7
Provide recommendations for resolving disputes using alternative dispute resolution..............8
Compare and contrast different sources of legal advice...........................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business refers to everything which can easily employ an individual. All this business are
governed by law and regulation known as business law. It is the law which have a set pattern
through which business activities can be performed easily. The main focus of business law is that
how business is formed and managed systematically. Alternate name of business law is
Corporate law as well as mercantile law. All of the suggestions and advices in this file will be
given by Hardy and Morrisons Solicitors which is one of law firm situated in Central London.
Here, topic that will have more importance is about the nature of UK legal system. Impact of law
upon business organisation. Proper evaluation will also be done in this respective file that how
effective the recent change are in current situation. In second task, formation of companies will
take part and how they can be managed where are dispute will also be solved with the help of
relevant legal advices.
TASK 1
Explain the nature of UK legal system by looking at different sources of law in UK.
The legal system of UK has been always stable which form the law and regulation as per
the requirement of situation. The nature of UK legal system says that no one has the authority to
overrule the laws and regulation which has been commenced by Parliament. They are the one
who have highest authority to commence law where everyone follows it without asking any kind
of doubts and question. Parliament is the sovereign body of UK which has been working very to
form new law whenever there is a requirement. The final approval is always given by Queen for
implementing any of the law.
Law is needed any of the country but the thing which is needed to be understand that it is
never easy to commence law for single body as workload cannot be managed. By considering all
of these things government of UK have distributed the power in multiple hands so that effective
results can be obtained easily (Raz, 2017). In current situation, four different sources are
available for effective law and policies and they are:
 Parliament: The member of Parliament needs to make new laws and policies by
considering the requirement that how business organisation can be run much effectively.
Whenever House of Parliament is required to commence new law related to business
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organisation they checks that how performance of companies can be improved if new
laws and policies will be imposed.
 European Union Law: This is one of the main source for any of the commercial sector
industry because most of the law related to operating business organisation are
commenced by EU law. The laws commenced by European Union have been very
effective because have been seen since long period of time. Remedies have been also
mentioned in it, if any of the default is found (Bayern, 2016).
 Common law: It has been one of the source which covers weaker side of the law because
it commences new laws and regulation as per the situation or civil wrong. The judges see
the situation that which type of law is suitable to commence through which problem can
be resolved. Judicial system has the main role that they are required to complete.
 European Convention on Human Rights: In this respective source, it is said that law
are commenced just to check that employee's should get equal rights while working with
in any of the organisation. This law doesn't allow to discriminate on the basis of caste,
gender and work.
Assess the potential impact of the law on a business that how statutory and common law applied
in the UK courts.
It is important that business organisation must perform their task as per the given criteria
and if any of the default is found then legal actions are taken against them. There is the huge
importance of common law and statutory law because they plays the significant role within the
court.
Statutory law: The thing is very clear that whenever any of the law is commenced by
statutory law must be followed by every sort of organisation and if they fails to perform their
task and work then they are being sued. In this condition court is the one who takes the decision
that what action is required to be taken so that effective results can be obtained. Here, judges
takes the help of statutory law and declare their decision if they thinks that law decision and
terms and condition have been mentioned under statutory provisions. This helps to declare
decision in shorty period of spell (Tepe, 2016)(Tushnet, 2017).
Common law: This is the department where UK courts have to suffer because various
problem are needed to be dealt because laws and regulation are not mentioned in it. But, judges
have the responsibility that they need to understand the situation that what types of problem has
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been created by the organisation. After looking and judging all of the situation judges need to
declare decision because terms and conditions are not mentioned and because of that they are
required to declare the decision of own by forming new laws and policies.
This is how laws and regulations are applied within the premisses of court and the most
important thing is that any of the mistake can cause in bigger amount for the organisation. So, it
is better for any of the organisation that they must try to comply the rules and regulation of anyo
of the law.
Potential impact of the law such as employment, contract and competition law on client’s
business
Employment law :- Employment law regulate the right and responsibility between
worker and employer. In this these rules are designed to keep workers safe and make sure that it
protects employer interest and worker as well such as minimum wage, minimum working age
etc. If the business has more than one worker or employee than it is necessary to use employment
law. This law helps to prevent discrimination, set up a minimal needed level of economical
support, boost health and safety, prevent work break due to difference between labour and
management. The potential impact of employment on any of the business organisation is that it
helps to obtain the goals of an organisation in given time period because guidelines are given by
the organisation in the beginning (Cameron, 2017). The negative impact on client's business is
that daily basis expenses will increase automatically.
Contract law :- contract law is organic structure of law that regulate, enforces, and
understand agreements related to an exchange of goods,services,money and properties. On the
basis of contract law, an understanding made between two or more persons or business entities,
in which there is a commitment to do something in return for a profit or advantage, is lawfully
valid. The contract law has positive and negative impact both because it will give the guidelines
due to which involved party will be able to perform their task on given time period as that has
the positive impact because only guidelines will be required to follow.
Competition law :- Competition law is a organic structure of legislation conscious to
prevent marketplace damage caused by anti-competitive pattern on the part of businesses. The
motive of competition law is tom provide a fair marketplace for consumers and producers by
forbid unethical or wrong practices planned to garner greater marketplace share than what could
be existent through genuine competition. The positive impact of competition is law is that
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company will try to enhance the quality of product through which sale of an organisation can
automatically increase.
Evaluate the effectiveness of the legal system in terms of recent reforms and development
Th laws and policies which are being introduced on regular interval have been very
effective because business organisation are able to take their any of the decision of own and even
they are able to sustain in the market very easily. The most important things about recent
changes are that organisation are not required to change there plans and policies much and more.
It has been helping in a positive manner where chances of earning more profit is high for any of
the company (McMillan, 2012). The tax rates has been reduces in a significant manner due to
which more number of business organisation want to enter into the similar form of market. Each
and every decision are required to be taken by considering business law which makes easy for
investor to avoid any of the remedies on them
Differences between how legislation, regulations and standards could impact their businesses
Legislation, Regulation and Standards have the difference on day to day transaction of a
business organisation as all of the legal terms wants to express different things for a company die
to which working condition becomes much conventing.
Legislation is the legal term which prepares the laws with in the House of parliament. It
is the first step where laws related to any of the organisation are commenced but people are
unaware about it as member of parliament only take the part in it. They are the one who force the
organisation to change their working style for achieving their goals.
Regulation is the term of law way which tells that any of the enforced law should be
followed and what are the criteria which need to be considered while taking any of the business
decision. Regulation are very helpful for any of the organisation because it guides that which
kind of decision is required to be taken and when it is needed to be taken (Murray, 2014).
Standards is one of the most important thing for organisation because it tells that while
manufacturing any of the product what should be the standard of any of the product. It says that
company is not allowed to sale any of the product below the given standard and if it is found
then legal actions can e easily taken.
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TASK 2
Examine the formation of different types of business organisations, such as
incorporated/unincorporated, unlimited liability are legally formed.
Forming an organisation is never an easy task and because of that it is necessary for any
of the investor to have the detail knowledge about each and every sector in detail so that any of
the decision can be taken effectively. The main thing which is needed to be understood by
investor is that they must have the knowledge that how company is needed to be setup legally.
Sole proprietorship :- Sole proprietorship refers to when business owned and run by
individual entity. It is also called sole dealer and in this there is no separation of owner and
business they both are considered same entity. It receive all the profit and also liable for all the
risk and losses (Yosifon, 2013). This types of organisation doesn't required to be formed legally
as there is no requirement of it so that profit earning of sole trader can be increased. Only
registration need to be done by the trader that who will operate the daily basis activity.
Partnership :- partnership refers to the formal agreement between two or more than two
persons to drive business and share its profits. They are called partners in the business who
invest and liable for all the losses occurred in business according to the terms and condition
given in the partnership agreement. When any of the group of people wants to incorporate the
partnership firm then they need to check and prepare the partnership deed where it is written that
who will be the member of an organisation and who will take the major responsibilities so that
business can earn higher amount of profit. After that it is necessary that deed must be submitted
to Companies House to operate business activities legal manner.
Limited liability company :- This is also called LLC. It is a type of business structure
that have both the qualities of corporation and sole proprietorship. There is limited liability of the
owners as corporation and taxation advantage as partnership and sole proprietorship. Members
get number of benefits in it due to which they get easily influenced to involve themselves within
the business activities of LLCs (Zimmermann, 2012). The liability is also limited due to which it
becomes much easier for investor to show their interest in Limited Liability company. The legal
manner to incorporate any of the LLCs starts from the selection of name of an organisation
including address. The list of member is also the most and after that the the thing which is
needed to be focus is on preparation of plans and policies for company and then documents is
required to be handed to the department of Companies House.
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Corporation :- It is separate legal entity that is created by shareholders. The existence of
business is continue if any owner of the business is passed away. During corporation business
there are some tax benefits and also have certain specific liabilities and rights. Its arrangement
and its inner operations are governed by state law. The decision in this type of organisation are
mainly taken after having the detail discussion on each and every field (Hanrahan, Ramsay and
Stapledon, 2013). The formalities process is needed to be done corporation and they lengthy then
normally it is expected and because of that expenses increases automatically. Single mistake in
this form of organisation can cost in very amount of money due to which it is important that
each and every work most be done in systematic manner. The legal way to incorporate any of the
corporation is explained below:
 The person who have developed the idea is required to select the name of company and
selection should be different from other form of organisation.
 Non of the business can be operated without the help of Memorandum and Article of
Association so it necessary that it most be prepared.
 The SIC code is very crucial and it must be obtained.
 To manage daily basis affair, it is necessary that client must decide first director and first
shareholder for operating any of the activity in smooth manner.
Illustrate with an explanation on different business organizations are managed and funded.
In every company, it is necessary to manage the work and that is only possible when fund
and proper management is available. Some of the organisation and their major sources of
funding and management is described below:
 Sole Proprietorship: This form of business is needed to be managed by sole trader and
to manage the fund it does requires the help of credit card, personal assets is also one of
the option (Burley, 2017).
 Partnership: The responsibilities to manage the work load is one accredited partner and
to manage the fund partners assets plays the important role and then loan is also the
available option.
 Limited Liability Company: It is one of the most successful form of company in which
it is managed by the manager and option available for raising fund is credit card, loan
and even introducing additional capital by each partner.
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 Corporation: It is said that corporation are managed by Directors, shareholders,
Company Secretary etc. and it is funded by bank, peer to peer lending, share can also be
issued, debenture is also the option available with company (Schmidt, 2018).
Advantages and disadvantages of the formation of different types business organizations.
Sole proprietorship advantages and disadvantages:
Advantages-
 It is easy and cheap to start sole proprietorship as it tend to be affordable models to start
in comparison to other businesses as other business involves high fees structure and
increased filing to open a new business.
 Sole proprietors have full and direct control over business and their decision making as it
does not share its ownership with co-partners and corporate board.
Disadvantage-
 Business continuity may end soon if the owner of the business meets with an accidental
death as he is the sole owner of the business and the money and assets of the business
become part of individual's estate.
 Raising funds at the initial level of the business is difficult for the owner as they do not
issues shares in the market.
Partnership advantages and disadvantages:
Advantages-
 Risk is shared among all the partners equally and are equally liable to all the debt and
profit whatever a firm incurred during a period of time (Stout and Blair, 2017).
 Better decision making process is involved in partnership as compared to sole trader .In
partnership the members discuss mutually about the particular problems comes up with
different different solution and provide better decision.
Disadvantages-
 In partnership firm, the partners have unlimited liability as each partner of the partnership
firm is personally liable for all the losses.
 There is lack of stability of partnership firm as the partners may leave the organisation
whenever they want and the business may have to suffer.
Limited liability company:
Advantages-
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 Limited liability company are easy to form and easier to keep in good legal standing as it
involve less paperwork.
 There is no restriction on the number of ownership (Bishara and Westermann‐Behaylo,
2012).
Disadvantages-
 There is confusion of roles as there are no restriction on the number of ownership.
 Limited life as the members of the limited liability company refuses to be the part of it ,
than the company tend to be ceased.
Corporation Advantages and disadvantages
Advantage
 The main advantage of corporation that is the shareholder liability is limited,
shareholders are only liable up to the amount which they have invested. The corporate
entity protect them from any extra liability that will helps the shareholder to keep their
personal assets safe.
 In a corporation, it is easy for shareholders to transfer or sell their shares as compare to
private companies.
Disadvantage of Corporation:-
 In the corporation, it may be that they will pay double tax as it corporation pay tax on its
profits on the other shareholder will receive the dividend and it is considered as an
income and taxed again (Kaplan, Weisberg and Binder, 2014).
 In case of forming a corporation the lawyer will charge more in comparison to others
which create a higher cost for the company.
Provide recommendations for resolving disputes using alternative dispute resolution
Case Scenario: MNO Ltd is one of the biggest business organisation who work at greater
platform. Jacob works the company in the post of Manager and he is the one who takes most of
the decision within the organisation. There is the contract between company and Jacob that if
company wants to remove Jacob then they must give the salary of at least three months where as
if Jacob wants to leave the company then three months prior notice must be given. After working
for 2 years in the company Jacob have got better offer from JLF Ltd. By looking at this Jacob is
not willing to serve the notice period of three months and wants to join JLF Ltd as soon as
possible. Here, MNO Ltd wants to file the case against Jacob as he breaches the
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Alternative dispute resolution :- The alternative dispute resolution refers to the
techniques and processes that helps disagreeing parties to resolve their problem without the
interference of court. In this disputes are solved by the third party and allow party to come up
with its creative solution that is not allowed by the court (Tepe, 2016). It is the most
recommanded method in modern era which solves the conflict with number of techniques and
ways. Some of the ways to solve the conflict are:
 Negotiation: It is the most recommanded form of style to solve the conflict and very
popular too. There is no involvement of any of the third person due to which it is
cheapest as well. The member try to negotiate on the points due to which conflict have
raised. There must be the willingness of both the investor before adopting this method of
solving the dispute.
 Mediation :- In this a person or third party is appointed by the disputed parties that is
called mediator who negotiate both parties and provide a solution that is accepted by both
the parties. It is systematic process in which mediator provide best possible solution to
their conflict. The main motive of adopting this mediation is that mediator try to advice
both the party separately due to which it becomes much easier to make both to resolve the
issue which has come across them (What is conciliation, 2018).
 Conciliation :- It is a method of conflict resolution in which neutral third party is
involved. A conciliator meet with disputed parties individually or together to solve their
conflict. They do this by improving communication, listening their issues, motivating
disputed parties to find out effective solution that is acceptable by both the parties. Here,
main motive is to reach near to the agreement deed so that problem can be reduced. Even
in this problem of disputed parties are being understood separately and after that
conciliator bring both party together and give its suggestion that how they can clear out
their problem.
 Arbitration :- Arbitration is the form of alternative dispute resolution that is help to
solve disputes outside the court. In this a arbitrator is assigned that play a character of
judge who listen carefully both the parties and take proper decision. If disputing parties
agreed with the decision then it is called reward. The main thing in this situation is that
arbitrator are required to declare the decision which is legal binding for disputed party
(Raz, 2017). Before selecting this method it is necessary for both the party that they most
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be sure for adopting this process because once it is selected, then decision must be
followed in it.
Recommendation: It is recommanded that MNO Ltd and disputed party must try to
solve their dispute with the help of Arbitration method because it will declare with best decision
due to which problem between both the parties can be easily solve. Even there will not be
requirement to waste additional period of time as court proceeding and result will also be
obtained in quick succession.
Compare and contrast different sources of legal advice
It is said that all of the available source of funding is find and even it suits that disputed
party because it saves the time. Them main thing which is required to focus is that how changes
in some of the department such as conciliation and mediation because almost its functions are
similar in nature due to which it becomes difficult for disputed party to decided the appropriate
way.
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CONCLUSION
From the above report, it can be concluded that every organisations needs to follows rules
and regulations imposed by laws. Rules and regulations are made so that any kind of fraudulent
activities can not be conducted. Sources of UK law helps to bring out the best law for any one of
the business organisation. The formation of any of the company is dependent upon investor but it
is important decision must be taken carefully and that must be effective for earning profit.
Disputes can be solved through the method of Alternative Dispute Resolution method as it is
easy, simple and time saving for disputed parties.
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REFERENCES
Books & Journals
Raz, J., 2017. The rule of law and its virtue. In The Rule of Law and the Separation of Powers.
(pp. 77-94). Routledge.
Bayern, S., 2016. The Implications of Modern Business–Entity Law for the Regulation of
Autonomous Systems. European Journal of Risk Regulation. 7(2). pp.297-309.
Tepe, M., 2016. In Public Servants We Trust?: A behavioural experiment on public service
motivation and trust among students of public administration, business sciences and
law. Public Management Review. 18(4). pp.508-538.
Tushnet, M., 2017. Comparative constitutional law. In The Oxford handbook of comparative law.
Cameron, P., 2017. International energy investment law: the pursuit of stability. OUP Catalogue.
McMillan, L., 2012. The Business Judgment Rule as an Immunity Doctrine. Wm. & Mary Bus.
L. Rev. 4. p. 521.
Murray, J., 2014. Social Enterprise Innovation: Delaware's Public Benefit Corporation Law.
Harv. Bus. L. Rev. 4. p. 345.
Yosifon, D. G., 2013. The Law of Corporate Purpose. Berkeley Bus. LJ. 10. p. 181.
Zimmermann, A., 2012. How Brazilian judges undermine the rule of law: A critical appraisal. In
International Trade and Business Law Review: Volume XI (pp. 187-225). Routledge-
Cavendish.
Hanrahan, P. F., Ramsay, I. and Stapledon, G. P., 2013. Commercial applications of company
law.
Burley, A. M. S., 2017. International law and international relations theory: a dual agenda. In
The Nature of International Law (pp. 11-46). Routledge.
Schmidt, S. J., 2018. Marketing the law firm: business development techniques. Law Journal
Press.
Stout, L. A. and Blair, M. M., 2017. A team production theory of corporate law. In Corporate
Governance (pp. 169-250). Gower.
Bishara, N. D. and Westermann‐Behaylo, M., 2012. The Law and Ethics of Restrictions on an
Employee's Post‐Employment Mobility. American Business Law Journal. 49(1). pp. 1-
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Kaplan, J., Weisberg, R. and Binder, G., 2014. Criminal law: Cases and materials. Wolters
Kluwer Law & Business.
Online
What is conciliation. 2018 [Online] Available Through: <http://www.dispute-resolution-
hamburg.com/conciliation/what-is-conciliation/>
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