Business Law Report: Business Organizations and Legal Solutions

This business law report provides a comprehensive overview of the UK legal system and its impact on businesses. It begins by exploring the different sources of law, including primary and secondary sources, and the roles of government in law-making and the application of common and statutory law. The report then delves into the potential impact of company, employment, and contract law on businesses, highlighting their significance. It also examines various types of business organizations, such as sole proprietorships, partnerships, and companies, along with their management and funding. The report further evaluates the effectiveness of the legal system with regards to recent reforms and development. Finally, it recommends legal solutions for resolving conflicts and disputes, and compares and contrasts different sources of legal advice. The report concludes with a discussion on the importance of business law in guiding ethical management practices.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different sources of law .......................................................................................................1
P2. Roles of government in law making and application of common and statutory law............2
M1. Evaluate effectiveness of legal system with regards to recent reforms and development...3
TASK 2............................................................................................................................................3
P3. Illustrate how company, employment and contract law has potential impact upon a
business.......................................................................................................................................3
M2. Difference between legislation, regulations and standards.................................................4
TASK 3............................................................................................................................................5
P4. Different types of business organization that can be formed legally....................................5
P5. Explain how business organizations are managed and funded.............................................6
M3. Advantages and disadvantages of different types business organizations..........................7
TASK 4............................................................................................................................................7
P6. Recommend legal solutions for resolving conflicts and disputes.........................................7
M4. Compare and contrast different sources of legal advice......................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
.......................................................................................................................................................10

INTRODUCTION
Business law is the legislation and rules that governs business organizations, structure
and dealings. It is considered as civil law and resolved matters of both public and private law.
The other names are commercial law or mercantile law. Further, it helps in bringing out ethics
that management should follow in business activities (Mann and Roberts, 2015). The report
covers different sources of law, role of government in law making and how statutory and
common law is applied to justice courts. Along with this, explanation of potential impact
possessed by company, employment and contract law upon a business and types of business
organizations and how they managed and funded is included. Furthermore, legal solutions for
resolving various types of conflicts and dispute have been discussed.
TASK 1
P1. Different sources of law
English legal system divided into three different legal system, one each for England and
Wales, Scotland and Northern Ireland. Each of them have their courts and procedures to deal
cases. Furthermore, UK does not have a written constitution, or rather say that constitution is
partially written. Also, it follow doctrine of judicial precedents and Parliament has the supreme
authority to pass a law that will govern rights of citizens living in UK. Each individual should
know about laws prevailing in the country to be able to use. Hence, complete information of
legislations is essential which can be gathered from the sources provided below:
 Primary sources: These are immediate and first-hand information which is absolutely
original and does not contain any interpretation.
Case law- These are decisions made and passed by judges in various lawsuits. UK
operates on principle of judicial precedents in which future judgements are made on decisions
passed previously (Beatty, Samuelson and Abril, 2018.). It is made in law reports which is
binding on individuals and no question can be raised on its validity.
Legislation: Parliament has passed and enacted various laws for the portion written in
the constitution. Such legislations are applicable and govern rights of UK people. Furthermore,
legal provisions extend to whole UK.
 Secondary sources: The information extracted and used in further research is called
secondary sources.
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Legal encyclopaedias: UK has reliable and authentic legal dictionary called Halsbury's
Law of England and Wales. It is arranged alphabetically and used to have clear meaning of legal
terms and provisions.
Parliamentary publications: It is a great source to know about the history and reasons
of a law being enacted. These include command papers, debates of parliament and both the
houses.
Non-parliamentary publications: The reports and consultation papers and reports
provided by government departments such as Ministry of Defence, Ministry of Justice etc.
Law commission: UK has an independent association which is constituted with an aim
to monitor working of legal system and provide recommendation wherever reforms are required.
The commission focus on ensuring the law is fair, up-to-date and easy to understand (Baker,
2019).
Law journals: It refers to articles, court decisions or suggestions which may cover a
particular area of law or all of legal provisions. These are used by attorneys who are practising
law.
Textbooks: These are books that are published for students and easy to collect
information by researcher or scholar. Legal topic may have different interpretation by number of
authors which can be used according to requirement.
P2. Roles of government in law making and application of common and statutory law
UK has divided the role of government into three different kinds which are executive,
legislative and judicial. Each contain separate role and importance. These have been explained as
under:
Executive role: This role is played by Crown, Prime Minister and other cabinet
ministers. It is responsible for formulating policies that will be applicable in whole UK. Further,
enforcing legal provisions and other plans is done by executive bench of government.
Government takes initiatives for proper implementation of legal provisions so that every act is
carried within limits as provided in legislations (Zander, 2015).
Legislative role: It is concerned with making laws that will enhance the effectiveness of
legal system. The legislative body viz. House of Lords and House of Commons who present a
bill at opening speech which goes through number of steps according to procedure of passing a
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bill. These are enacted as law which is compulsory for everyone to follow as they govern rights
of UK people.
Judicial role: In this UK government to establish courts including high courts and
appoint judges who are eligible. However, appointment of senior judges is done by Crown. Such
judges are considered independent person who have absolute authority over the actions. Also,
only Queen has the authority to remove a judge from its position after consultation with both
Houses of Parliament.
Apart from these roles, one must understand the difference and application of common
and statutory law in justice courts. These have been discussed below:
Common law: It is unwritten and natural law which is made by looking into traditions
and customs and applicable throughout UK (Leyland, 2016). It is called judge-made law or case
law. An important factor is that, principle of judicial precedents is applied in which a case with
same situations and facts are decided from previous judgements. A new law in common law will
be used as a reference subsequent to court decisions.
Statutory law: It is available in written form on which whole structure of UK legal
system is made. These are body of laws and rules which govern acts and rights of citizens.
Parliament pass various laws which must be abide by each individual and contravention in legal
provisions will be termed as offences for which punishments will be awarded. Hence, rules that
regulates behaviour of people living in the society is called statutes or statutory law.
M1. Evaluate effectiveness of legal system with regards to recent reforms and development
UK law has gone through number of reforms for keeping it adequate and effective. It
does not have a written constitution and works on judicial precedents which makes it difficult to
understand for a person to understand legal provisions prevailing in the country. Thus, it needs to
go under reform for amending existing laws so as to leave no scope of doubt and loopholes. In
nutshell, the level of complexity should be removed for making it competent to provide right
decision which can be relied upon (Segal and Choi, 2016).
TASK 2
P3. Illustrate how company, employment and contract law has potential impact upon a business
Company: UK has Companies Act, 2006 which is applicable on companies operating
UK. It contains legal provisions which gives it a separate legal identity. It has potential impact
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on wealth creation in which a corporate has to comply with code of governance and has to fulfil
requirements in regard to capital. Along with this, it works as pricing mechanism for investors, in
which an entity has to give details such as price, and avenues in which funds will be utilised. The
business activities are managed according to laws provided under this act. Law provide for
piercing corporate veil to find out the real culprit. For example, company ABC has breached
some of major terms as provided in shareholder agreement, the corporate along with official
involved in such breach will be penalised and sentenced (Lim, 2016).
Employment law: Employees are important for every types of business as they are one
of the prime resources who achieve goals and objectives of an organization. Employment Act,
2002 is in legal system of UK which has been enacted to protect workforce from any sort of
negative situations and act. Also, there are provisions such as minimum wages to worker,
working hours, flexibility in work, leaves etc. It is a very strong law and provides punishments
for offences made by employer. Every personnel should be treated equally and given same
opportunities. Furthermore, benefits and incentives should be according to policies of a
company. For example, Mr, Richard, an employee has been dismissed for disclosing about
wrongful and illegal activities being carried out by certain personnel. In such case, employment
tribunal can be accessed for filing a law suit.
Contract law: An agreement which is executed between two parties contains valuable
consideration and lawful purpose and enforceable by law is called a contract. It is legally binding
on parties involved and comprises terms and conditions for the transaction. UK does not have
individual act for governing contracts, hence, it is regulated through Sale and Supply of Goods,
Act, 1994 (Austen-Baker, 2017). A contract is an essence of every deal as it forms a trust of
people entering into it. The act states that going against or not carrying activities according to
clauses mentioned in a contract, will render it revoked or void. For example, a manager not
acting according to employment contract will have negative impact on employees which may
force company to suffer crisis.
M2. Difference between legislation, regulations and standards
Legislation Regulation Standards
These are statues made by
Parliament of UK for the
These are subsequent rules and
laws which are applicable with
These are guidelines or
requirements which are made
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governing rights and acts of all
the people living in the
country. A bill is transformed
into act after passing through
number of stages. It is
compulsory for everyone to
follow.
main law. It increases
effectiveness of an
organization and is mandatory
in nature.
by the organization for
measuring its actual results.
This helps in ascertaining the
difference in order to cut down
extra cost.
TASK 3
P4. Different types of business organization that can be formed legally
Sole proprietorship: The business activities are carried out by a single person who is
known as sole trader or owner. There is no separate legal distinction between proprietor and his
entity. Also, there is no legal requirement of registration. Owner can operate business under its
own name or under any fictitious name. It is simplest business types in which profits and losses
are not shared. Also, the owner has absolute responsibility to bring capital for financing in order
to carry business without any hindrance. Furthermore, personal assets will be used in case debts
of sole proprietorship is unpaid.
Partnership firm: Two or more people coming together with an intention to create a
lawful business in order to make profit is called partnership firm. A partnership deed is executed
between partners which contains terms on which it will be established. The profits and losses are
shared among partners in the ratio so mentioned in the deed and in equal ration, if no ratio is
mentioned. Further, a partner is held liable jointly and severally for the acts others. In case of
insufficiency of resources to pay off debts of the firm, personal assets of partners will be used in
situation. However, creditors cannot bound a partner to pay their loan from personal properties
(Holloway and Parmigiani, 2016).
Company: According to judgement passed in Salomon v Salomon, a company is an
artificial person which has separate identity and existence from its members and has perpetual
succession. Furthermore, it has common seal on which name of the entity is engraved and used
as signature to authenticate and bind contracts executed between the corporate and party. UK has
Companies Act, 2006 which governs its business, structure and operations. Also, a company has
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to make MOA and AOA, according to which it has to act. The liability of a member is limited to
the extent of nominal amount unpaid on the shares held by them or amount agreed to be paid at
the event of winding up. Also, it can be unlimited in certain cases.
Limited Liability Partnership: It is a mixed combination of a company and partnership.
The liability of partners is limited, thus, it cannot in any case extend to personal properties and
they can conduct business activities in a flexible manner. Furthermore, it is easy to convert into
types of entities provided all conditions are fulfilled. Furthermore, an agreement is executed
which govern all activities (Fallon Jr, 2015).
P5. Explain how business organizations are managed and funded
Sole proprietorship: The business is handled by a sole person who makes all the
decisions which would be beneficial for the entity. Also, he has absolute authority over the
business activities. All contracts are made by the owner. He may engage outsider or his own
family members. On coming to funding, the sources through which it is financed majorly are
personal savings and loans from bank and financial institutes. Since, it is not a registered entity,
investors are not usually keen to invest, hence, it has limited options to finance the business.
Partnership firm: It is formed by partners who are responsible for carrying business.
They are the one who makes all the decisions which will be applicable on all the activities.
However, a decision will be final only when it is approved by all partners. A single disapproval
will be considered and no decision can be passed. It is funded by the capital that partners bring.
Other sources can be bank loans, loans from family and friends, financial institutes, retained
earning etc. Also, they can invest in government securities for return.
Company: It is considered as a person but cannot work on its own, thus, appoint eligible
individuals who can hold the position of a director. Number of directors collectively known as
board of directors who hold meetings to make decisions. Furthermore, they make policies and
strategies that will be applicable in the company. They execute contracts on behalf of company.
Employees are appointed by them, also, the purpose for which funds are being raised are decided
by them. In fact, they hold the power to file for winding up when company is on the verge of
becoming an insolvent or has already became one. Investors always show their interest to invest
in corporates as it is a registered entity. Therefore, it has multiple options such as share capital,
debentures, borrowings, loans from banks and financial institutions, venture capital, retained
earnings etc.
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Limited Liability Partnership: It is a hybrid form of business in which all the decisions
are taken by partners. They raise funds for the entity and provide procedure in which business
will be conducted. A new partner is admitted with the consent of all partners. This type of
business has wider options as compared to other sole-proprietorship and partnership firm. They
can have finance through retained earnings, capital of partners, loans from banks and FI, crowd
funding etc.
M3. Advantages and disadvantages of different types business organizations
Basis Sole
proprietorship
Partnership firm Company LLP
Advantages Easy to form and
dissolve.
Low cost for
establishment.
Direct control of
owner on business
operations.
It is easy to form.
No registration is
required.
Risks and losses are
shared between
partners.
Limited liability of
members.
High professional
management.
Wider options for
capital raising.
Separate legal
status.
Agreements are
flexible to change.
Limited liability
Disadvanta
ges
Owner is solely
liable for debts and
losses.
Self-employment
taxes applied to
owner.
Liability of partners
is unlimited.
No legal identity.
Limited capital.
High restrictions in
way of more legal
requirements.
Lack of secrecy as
registers and
documents are
made public.
Imbalance
between rights of
partners.
Huge penalties in
case of breach and
contravention.
TASK 4
P6. Recommend legal solutions for resolving conflicts and disputes
The nature of every dispute is different which needs right solution for its effective
resolution. These are as follows:
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Negotiation: It is the basic method for resolving conflicts in which two-way
communication is held between parties to dispute with an aim to find a solution for quick
resolution. An agreement may be executed containing terms which have been agreed through
negotiation. It is voluntary in nature, conclude the matter quickly and in a cost-effective manner.
Moreover, parties can have their own procedure and process to settle the matter. For example,
there is a matter of money going on between two parties which can be resolved through
negotiation (Nazzini, 2016).
Mediation: A voluntary process in which a third independent person is hire who has an
objective to facilitate communication between parties involved. It is used only when negotiation
is not a useful method. Mediator helps in bringing viewpoints of both parties. However, parties
may solve the case directly according to decided way. It helps in bringing co-operation between
parties. It is flexible enough to change the process through which case is being resolved. Also, a
great way to keep the matter confidential and private. It can be used in number of ways, for
example, in family disputes.
Arbitration: It is a method for resolving conflicts without going to the court. In this
process, a person, arbitrator is appointed with the consent of both the parties. Arbitrator hear both
parties and examine evidence, facts and issues on which decision is passed. The judgement
passed is final and binding. It is easy, simple and inexpensive method which gives reliable
decision. It has its own procedure which is authentic. For example, cases of international matters
can be resolved through arbitration.
Litigation: This method should be used when all other methods have failed to resolve
disputes. In this, a lawsuit is filed by petitioner who produce evidence, facts and issues at the
time of trial. The judgement so passed can be challenged in upper court where any of the party is
aggrieved. It is highly formal and activities are carried according to laws which are applicable.
For example, in the matter of public, litigation would be the right option to get a solution.
Recommendation: Arbitration is the only solution which can be used for resolving any
sort of civil case without the intervention of courts.
M4. Compare and contrast different sources of legal advice
Legal advice refers to professional or formal opinion in a matter of law or legislation.
There different types of sources through which it can be gained, these are as follows:
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Lawyers: They are the qualified professionals who have expertise in the matter of legal
provisions. They are the ones through which one fight their legal cases as they apply their
intellectual and legal information.
Barrister: They are the one who represent clients in high courts. They deal with the
matter of common law in UK. They have have knowledge about working of superior courts.
Legal cases: The existing legal cases can give real time information which can be applied
in current case for resolving it. It is termed as one of the great and efficient sources which gives
additional information.
CONCLUSION
From the above report, it can be concluded that legal system provides laws which govern
rights of employees. It provides limits which cannot be exceeded. There are offences and their
punishments which should be known to everyone. Also, there are laws applicable on business
organizations governing their operations and transactions. Furthermore, different types of entities
have separate acts for each one of them. Furthermore, laws provides for management and
funding of types of organizations which should be done accordingly. However, there may arise
conflicting situations which should be resolved with right method chosen among number of legal
solution for disputes resolution.
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REFERENCES
Books & Journals:
Mann, R.A. and Roberts, B.S., 2015. Business law and the regulation of business. Nelson
Education.
Beatty, J.F., Samuelson, S.S. and Abril, P.S., 2018. Business law and the legal environment.
Cengage Learning.
Baker, J., 2019. Introduction to English Legal History. Oxford University Press.
Zander, M., 2015. The law-making process. Bloomsbury Publishing.
Leyland, P., 2016. The constitution of the United Kingdom: A contextual analysis. Bloomsbury
Publishing.
Austen-Baker, R., 2017. Implied terms in English contract law. Edward Elgar Publishing.
Lim, E., 2016. Judicial Intervention in Directors’ Decision-Making Process: Section 172 of the
Companies Act 2006. Journal of Business Law. 169. p.2018.
Segal, S.P. and Choi, J.S., 2016. Ownership form and quality of care in sheltered care facilities:
Chain-affiliated business vs. sole proprietorship.
Holloway, S.S. and Parmigiani, A., 2016. Friends and profits don’t mix: The performance
implications of repeated partnerships. Academy of Management Journal. 59(2). pp.460-
478.
Fallon Jr, R.H., 2015. The Meaning of Legal Meaning and its Implications for Theories of Legal
Interpretation. U. Chi. L. Rev. 82. p.1235.
Nazzini, R., 2016. The Law Applicable to the Arbitration Agreement: Towards Transnational
Principles. International & Comparative Law Quarterly. 65(3). pp.681-703.
Kartuzov, M., 2015. Advantages and disadvantages of International Commercial Arbitration in
comparison to litigation and other means of dispute resolution. Evropsky politicky a
pravni diskurz, (2, Iss. 3), pp.64-68.
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