Business Law Report: UK Legal System, Business Impact, and Structure

This report provides a comprehensive overview of UK business law, encompassing the sources of law, the role of government in law-making, and the application of statutory and common law. It explores the impact of company, employment, and contract law on businesses, using specific examples to illustrate these effects. The report further examines the legal formation of different types of business organizations, including sole proprietorships, partnerships, and companies, along with their management and funding. It concludes by recommending legal solutions for resolving business disputes, offering practical examples and suggestions for effective conflict resolution. The report is a valuable resource for understanding the legal framework within which businesses operate in the UK.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Different sources of UK law.................................................................................................3
P2. Role of government in law-making and application of statutory and common law in
justice courts................................................................................................................................4
TASK 2............................................................................................................................................6
P3. Using specific examples illustrate how company, employment and contract law has a
potential impact upon a business.................................................................................................6
TASK 3............................................................................................................................................7
P4. Explore how different types of business organizations are legally formed..........................7
P5. Explain how business organizations are managed and funded.............................................8
TASK 4 ...........................................................................................................................................9
P6. Recommend legal solutions for resolving a range of disputes using examples followed by
a recommendation.......................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business law comprises legal provisions that govern commercial transactions of an
organization. It regulates environment in order to run the business smoothly. It provides a legal
validity and authentication to dealings and contracts done in the ordinary course of business
(Azadeh, Darivandi and Fathi, 2012). The report covers, nature of UK legal system along with
different sources of law, role of government in law making process and implementation of
common and statutory law in justice courts. Furthermore, impact of various laws upon a conduct
of a business, different forms of organizations formed legally along with there management and
funding. Furthermore, legal solutions for resolving conflicts and a recommendation of
appropriate method.
TASK 1
P1. Different sources of UK law
English legal system is applicable in England and Wales which is based on principle of
judicial principle. It provides rules and norms governing citizens of UK. It is divided into many
types of laws such as common and statutory, civil and criminal, private and public. It legal
system is considered complex with requirement of amendments to make it more effective and
powerful. There are courts systems who have defined jurisdiction to resolve cases. Furthermore,
various sources are available to gather information about laws which can be used for taking
benefits. These are as follows:
Primary sources: Bare acts and original information are contained in such sources.
These are data extracted directly from their origin. Some of these have been explained
hereunder:
 Case law: These include judgements passed by courts based on legal principles. UK's
judiciary system works on doctrine of judicial precedents, in which decisions are passed
on the basis of previous case laws. A lawsuit with similar situations are resolved with
determination that has already made (Boyarsky, and Gora, eds., 2012)
 Legislation: Parliament has the authority to pass bills that will be enacted as acts, which
will govern rights of citizens. The constitution of UK is not completely written, however,
laws have been passed for the portion which has been penned. The authenticity of acts
can not be challenged.

Secondary sources: When original information are interpreted or used by a person such
as authors or researchers, they are treated as secondary. Various secondary sources have been
defined below:
 Legal encyclopaedias: The most authentic and widely used legal encyclopaedia is
Halsbury's laws of England and Wales. It is a well arranged source that consists opinions
of experts such as lawyers. It has defined various terms which are used in legally.
 Parliamentary publications: Debates of House of Commons and House of Lords,
debates of parliament etc. are published in Hansard which is used to know the highlight
along with reason of enacting a law (De George, 2011).
 Non-parliamentary publications: The reports prepared and presented by government
agencies and departments are put in this sources. Generally, these are available at official
sites of such department or agency.
 Law commission: UK government has developed a body of independent panel who are
responsible for evaluation efficiency and working of laws that have been enacted and
make recommendation so required. The report submitted by the commission is disclosed
to wider public and interested parties for their suggestions.
 Law journals: Legal articles are parts of law journals which contain extensive
information about various provisions. These are generally arranged alphabetically and
can be found in library. The database includes rules and supplements which will help in
gaining better knowledge about laws.
 Textbooks: These are best source to increase awareness about laws that are applicable.
Textbooks written by authors contain legal terms along with their scope in an easy and
interpreted way (Folsom, and Et. Al, 2012).
P2. Role of government in law-making and application of statutory and common law in justice
courts
Government assess existing system regarding legal, taxation, environmental and many
more to determine areas of improvement to remove or reduce inefficiency in legal system. The
roles have been divided and each of them have assigned certain powers which are exercised.
Roles are as follows:

 Executive role: This role is about enforcing laws and rules. Queen and Prime minister of
UK have this role, who have the authority to make people abide by laws governing them.
Furthermore, cabinet ministers are also included in this branch.
 Legislative role: Legislative body such as House of commons and House of Lords have
role to present a pass in Parliament to enact as law. These consist of rules that regulate
acts of individuals. A bill is passed through number of stages which receives royal assent
for implementing in the country (Keen, 2015).
 Judicial role: Courts are part of legal system which provide decisions whose scope
extend to throughout the country. High courts and lower courts are developed by
government in under this role. There is a set procedure that is followed from trial to
passing of orders. Judges are appointed by Queen who have requisite qualification and
knowledge.
Apart from the above information, there is differentiation between common and statutory
laws according to their applicability which has been mentioned as below:
Common law: These are the judge made law that have been created on the basis of
doctrine of judicial precedents. Under this, previous cases are the foundation on which future
lawsuits are concluded. The situations of a case should be similar to earlier case that is being
applied to it. There could be occasion in which new law has been developed which are treated as
supplementary law. These have tendency to instruct a case to be resolved in a particular manner.
In this, facts and evidences are important along with legal principles. These are set rules that
governs proceedings of a lawsuit.
Statutory law: The written and codified rules and laws which have been formed and
enacted by legislative body are called statutory law. A bill after passing through various stages
get converted into an act which extends to all the citizens of UK. Legal system are based on
these law. It expresses will of legislature. It is the declaration or command which must be
followed by each individual otherwise punishment will be provided which are specifically given
in the act. These regulates acts and behaviour of members living in the society. Government
imposes statues which extends to whole country (Mastel, 2016).

TASK 2
P3. Using specific examples illustrate how company, employment and contract law has a
potential impact upon a business
Laws are made for systematic conduct of business organizations. These are meant to
protect various parties from fraud or misconduct. Furthermore, legal solutions or methods are
available which can be sought for breach or contravention in terms and conditions of a contract.
Hence, it can be said that company, employment and contract law have huge impact on how a
business carries its activities which have been discussed below:
Company: UK has a particular act i.e. Companies Act, 2006, applicable on body
corporates operating in the country. It has laws along with rules which should be complied with
in order to carry business operations legally (MORÇÖL and Gautsch, 2013). Details about
incorporation to winding up is mentioned in the act. Along with this, offences with their
punishment and fines are also included so that mistakes are not repeated in future. Limits within
which it can operate, duties of directors, rights of shareholders, filing requirements, taxation,
capital etc. should be followed as given in Companies Act,. 2006. For example, ABC co. has
failed to comply with provision of preservation of registers regarding appointment of auditors,
then specific actions will be taken.
Employment: Manpower is the way through which an organization carries its activities
in order to accomplish goals and objectives. Their protection of rights and safety is a duty of of
an employer. However, many case have been noticed in the past regarding violation of rights of
employees, harassment, denying of permission of maternity/paternity leaves etc. Hence, by
considering growing number of incidents, government in UK has enacted Employment Act, 2002
for protecting rights of workforce, provide minimum leaves, working hours, flexibility, right to
choose entity they want to work in etc. Further, it also has legal provision of leaves such as
paternity and maternity, paid leaves and many more. These should be complied without any miss
so as to avoid situations like strike, deadlock and increase in employee turnover. For example, a
company abiding by this act is liked and manage to attract more employees to entities not giving
fulfilling requirements of this Act.
Contract: These are the foundation of on which a deal is done. This make a party to trust
on the other party that transaction will be done according to terms and conditions of the contract.
It is an agreement which is enforceable by law and has conditions which should be fulfilled. In

case of any contravention or breach of a clause, legal actions can be taken by the party who has
suffered from loss or damages. It is executed between a vendor and purchaser which contains
terms that have bee agreed on mutually. Payment, packaging and dispatch should be made as per
contract. UK does not have a separate law for contract, thus, governed by Sale and Supply of
Goods Act, 1994. It gives information about when a contract will be treated legal, or the
circumstances under which it can be revoked. For example, dispatch of product has been delayed
by a good amount of time, then in such case, the party who has breached it, can be compelled to
act according to contract.
TASK 3
P4. Explore how different types of business organizations are legally formed
A business need a structure in order to carry operations which is backed with legal
provisions. In other words, there are different types entities that can be formed legally. Before
starting a business, all forms should be assessed and evaluated so that right form can be chosen.
Various organizations that can be established legally are as follows:
Sole proprietorship: When a single person own and manage business at small scale it is
called sole proprietorship (Qi, Roth and Wald, 2017). Owner is responsible for profits and loss
which is not not distributed with other person. This means that, sole trader has absolute right on
income and expenses of the entity. Further, the owner and entity is considered as because there is
no legal identity of sole proprietorship. Debts are paid by owner himself, in case of insufficient
amount, liability can extend to his personal assets. It is easy to establish and dissolved, and if the
owner die, it gets wound up automatically.
Partnership: An association of two or more partners with a common objectives to carry
lawful business to make profits. A deed is made and executed between all the partners which
comprise terms on which firm will operate. Profits and losses are shared in ratio as included in
the deed and in case of no presence of such ratio, these will be divided equally. A partner will be
charged for the acts or offence of another. Furthermore, registration is voluntary. There is
flexibility is management. Also, it requires nominal cost for its formation. Personal assets can be
used for paying off unpaid debts of the firm.
Company: It is an artificial person having legal identity distinct from its members who
has right to sue or be sued, open account, or own properties in its own name. Furthermore, a

company is also called body corporate and has perpetual succession and common seal which is
used as a signature on contracts and other documents. It is created in the eyes of law only after
registering under Companies Act, 2006 and obtaining certification of incorporation. The Act,
defines provisions which should be complied with in order to avoid legal consequences. It is
expensive to form and has complex and huge number of requirements (Weiss, 2014).
Limited Liability Partnership (LLP): It is a mixture of a company and partnership
which involve professional expertise, innovation and limited liability. There is flexibility in
internal management just like partnership and characteristics of separate legal entity as of a
company. Furthermore, there is no requirement of minimum capital also no maximum limit on
number of partners. It is suitable for people conducting professional business like advocates etc.
The major benefits of this type are that liability of each partner is limited, easy to form with low
cost, no one is held liable for the acts of others. Fewer compliance requirements as compared to
any other business form.
P5. Explain how business organizations are managed and funded
Sole Proprietorship: This type of business enterprise is managed and operated by single
person named as sole trader. In this, there is no specific legal separation is made between
business entity and founder or owner of business. It can be sole trader is the only one in
organisation who has authority to take decision while managing business. With reference to
funding, Sole proprietor does not have support of any partners or business person. Thus, they
only have option to arrange funds at their own that is family and friends. Sole traders can also
arrange funds from banks and other financial institution from where their financial needs can be
fulfilled (Simpson, 2012).
Partnership: In this type of business entity two or more parties are involved together in
the form of agreement for mutual benefits. These partners can be any one such as another
company, individuals, government, schools, interest based company or combination in some of
them. Managerial decisions and activities are handled by all the legal partners. Under this,
liabilities of partners are unlimited that means if business will go in loss then it will be managed
and compensated by legal partners. Along with this, all of the major decisions are taken by
partners with their mutual consent. All roles and responsibility of partners are divided among
partners according to their share and invested ratio. Numerous sources of funding for partnership
are savings, bank loans, friends and family.

Company: It is considered as an legal entity that is formulated with the group of people.
Management of funds and other related activities are managed by the top management team or
by director of the company. Retained earnings, debentures, equity shares, debt capital, working
capital comes under sources of funds for a company. Before selecting source of fund it is
essential for every company to analyse the advantages and disadvantages of these sources. All
these sources used by a company in different situations (Thomas, 2013).
Limited Liability Partnership: It is a legal entity, which is fully liable for its own assets
but the liabilities of every partner is limited. Rights of each partner is governed by a written
document or agreement. LLP must have at least two partners, who should be a resident of India.
All the partners are equally responsible for the overall management of LLP. Legal compliances
of the company is managed by only designated partners. Each and every partner is accountable
for its own action. Source of funds for Limited Liability Partnership business includes short term
funds or internal sources, venture capital and banks. Stakeholders of such firms can take part in
its daily operations.
TASK 4
P6. Recommend legal solutions for resolving a range of disputes using examples followed by a
recommendation
Legal solution refers to any action or remedy which are provided for settling disputes.
There are number of methods which may or may not include out of the court settlement. These
are as follows:
Negotiation: The differences are settled through a back-and-forth communication
between parties to conflicts with an aim to find a solution. Parties have direct control over the
matter, however, they can hire a third party who will bring both parties together for resolving the
disputes. For example, employees of ABC company wish to get higher wages and pension
contributions from its employers, this can be managed through negotiation (Stephan, 2010).
Mediation: It is used when negotiation does not settle down the disputes. A impartial
person known as mediator is appointed who takes the responsibility to handle proceedings in
order to resolve the dispute. Mediator makes an agreement between the parties which is accepted
by both the parties. However, it can not be enforced on them. The solution has to be creative
which can not be available from court of law. For example, there are two parties viz. A and B, B

borrows money from A, on the date of payment there is no cash with B, in such a case instead of
taking the matter to court, possible solution should be assessed and given.
Arbitration: It is the simple, inexpensive and speedy settlement of disputes in which an
arbitrator is appointed to hear both the sides, examine evidences and provide a decision which is
final and will be binding on parties to disputes. Parties provide their respective testimonies,
evidence, facts and issues which are resolved by arbitrator by applying his knowledge. For
example, contractual disputes are liable for arbitration (Qi, Roth and Wald, 2017).
Litigation: It is the use of courts and civil justice systems to resolve conflicts. The case
proceedings start with trial in which facts and issues are deposited however, no evidence is
given. The judge examine testimonies and evidence so provided and pass a judgement on a legal
principle. It is expensive in nature and can take number of months for resolution.
According to above-mentioned remedies, the most suitable legal solution is arbitration.
One can rely the decision awarded by arbitrator. Further, it can be enforced in courts.
CONCLUSION
As per the above report, business law is an important set of legal provisions which are
applied in the working of an organization so as to avoid legal consequences. It is a part of legal
system which should be understood through primary and secondary sources available. Further,
applicability of common and statutory law should also be analysed so as to apply them for
turning the case in favour. The role of government in law making is important for which
government has divided it into three roles. Along with this, there are various types business
organization available which can be used for incorporation of business. Furthermore, legal
solutions can be used for resolution of conflicts and disputes.

REFERENCES
Books and journals:
Azadeh, A., Darivandi, K. and Fathi, E., 2012. Diagnosing, simulating and improving business
process using cybernetic laws and the viable system model: the case of a purchasing
process. Systems Research and Behavioral Science. 29(1). pp.66-86.
Boyarsky, A. and Gora, P. eds., 2012. Laws of chaos: invariant measures and dynamical systems
in one dimension. Springer Science & Business Media.
De George, R. T., 2011. Business ethics. Pearson Education India.
Folsom, R. H. and Et. Al, 2012. International business transactions: a problem-oriented
coursebook. ThomsonReuters.
Keen, M., 2015. The laws of war in the late Middle Ages. Routledge.
Mastel, G., 2016. Antidumping laws and the US economy. Routledge.
MORÇÖL, G. and Gautsch, D., 2013. Institutionalization of business improvement districts: A
longitudinal study of the state laws in the United States. Public administration
quarterly. pp.240-279.
Qi, Y., Roth, L. and Wald, J., 2017. Creditor protection laws, debt financing, and corporate
investment over the business cycle. Journal of International Business Studies. 48(4),
pp.477-497.
Simpson, J., 2012. John Bale, Three Laws. In The Oxford Handbook of Tudor Drama.
Stephan, A., 2010. Cartel laws undermined: Corruption, social norms, and collectivist business
cultures. Journal of Law and Society. 37(2). pp.345-367.
Thomas, J. W., 2013. Numerical partial differential equations: conservation laws and elliptic
equations (Vol. 33). Springer Science & Business Media.
Weiss, J. W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.