Legal Aspects of Business: A Comprehensive Report on Business Law1

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BUSINESS LAW

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TABLE OF CONTENTS
INTRODUCTION............................................................................................................................. 3
LO1: NATURE OF THE LEGAL SYSTEM............................................................................................4
CONSTITUTES OF LEGAL SYSTEM...............................................................................................4
THE PURPOSE OF LAW AND DIFFERENT SOURCES OF LAW.......................................................4
THE LEGAL SYSTEM.................................................................................................................... 5
DIFFERENCE BETWEEN CIVIL AND CRIMINAL LAW....................................................................5
THE JUSTICE SYSTEM:................................................................................................................ 6
ORGANISATION OF THE JUDICIARY............................................................................................7
LO2: POTENTIAL IMPACT OF THE LAW ON A BUSINESS.................................................................8
CONTRACT LAW.........................................................................................................................8
COMPETITION LAW....................................................................................................................8
DATA PROTECTION.................................................................................................................... 8
THE TORT OF NEGLIGENCE........................................................................................................ 8
CONSUMER PROTECTION.......................................................................................................... 9
HEALTH AND SAFETY..................................................................................................................9
PRODUCT LIABILITY....................................................................................................................9
DUTIES OF EMPLOYER AND EMPLOYEE.....................................................................................9
MANAGING CASES OF DISMISSAL, REDUNDANCY, DISCRIMINATION, HEALTH AND SAFETY. .10

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LO3: EXAMINATION OF FORMATION OF DIFFERENT TYPES OF BUSINESS ORGANIZATIONS.......11
UNINCORPORATED VS INCORPORATED LEGAL STRUCTURES..................................................11
DIFFERENT TYPES OF BUSINESS ORGANISATIONS...................................................................11
CLASSIFICATION OF COMPANIES.............................................................................................12
STARTING UP A BUSINESS ORGANISATION AND REGISTRATION REQUIREMENTS..................12
MANAGEMENT OF A COMPANY..............................................................................................13
APPLICATION OF COMPANY LAW............................................................................................13
L04: RECOMMENDING LEGAL SOLUTIONS FOR RESOLVING AREAS OF DISPUTE........................15
CONCLUSION AND RECOMMENDATION......................................................................................30
REFERENCES.................................................................................................................................31

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INTRODUCTION
Business law is referred to as the body of law which is responsible for governing the business
operations. The business law is usually considered as a branch of civil law and deals with the
issues arising both in the public and private law. This law handbook is being prepared with the
major objective of helping the start-up companies about the legal aspects and the key
legislation which would be required by them for efficiently running the business operations.
Therefore, this handbook would contain all the salient legislations which the businessman must
be aware of along with their impact of non-fulfilment.

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LO1: NATURE OF THE LEGAL SYSTEM
CONSTITUTES OF LEGAL SYSTEM
A legal system is referred as the administration of the particular country which comprises of the
written constitution, subsidiary and primary legislation, the customs applied by the law based
on the traditional practices and also the other principles as specified in the civil or other code of
law (Adams, 2016).
THE PURPOSE OF LAW AND DIFFERENT SOURCES OF LAW
The major purpose of establishing a law is to ensure that the rights of all the groups within the
society are being protected. Establishing a law helps in maintaining order within the society,
resolving disputes, establishing standards and also protecting the rights of the individuals within
society (Ives, 2018).
SOURCES OF LAW
Legislation
This is considered as a source of law as it enacts statutory law. This law is a result of various
statutes. These are considered as the primary sources of law and it cannot be conflicted by the
other laws (Green, 2017).
Directives
Directives are referred to as the secondary legislation existing within the country. These are
majorly formed on the principles as laid down by the treaties within the nation (Beresford et al.,
2016).
Constitution
This refers to the fundamental law which is being adopted by the country.

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Case law
These laws are being prepared by the judges who deliver the rulings within the court (Adams,
2016). The judges are held responsible for writing their personal decisions and for providing the
reasons behind the same.
THE LEGAL SYSTEM
(Elliott and Quinn, 2015)
DIFFERENCE BETWEEN CIVIL AND CRIMINAL LAW
The criminal law has been established with the sole objective of punishing the criminals for the
offences done by him against a particular individual or the society as a whole (Simbeye, 2017).
On the other hand, the civil law has been introduced with the objective of regulating the
relationships which exist between the individuals and the individuals and the organizations
(Hartley, 2017). The remedy available under the criminal law would be the sentence of
punishment which would be imposed by the state whereas, under the provisions of civil law,
the remedy available is injunction and damages.

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THE JUSTICE SYSTEM:
ROLE OF GOVERNMENT IN LAW-MAKING
The bill represents the proposed law. All the statutes start as a bill which is either private bill or
public bill. The following steps are undertaken for forming a bill:
 FIRST READING- the bill along with the title is read in the House of Commons.
 SECOND READING- debate and bring amendments to the bill. Voting is conducted to
determine whether the bill should be preceded or not.
 COMMITTEE STAGE - at this stage, the bill is referred to the house of commons for
examination (Cowley, 2017).
 REPORT STAGE- debates and amendments are reported again to the house.
 THIRD READING- at this stage, the bill is again presented and decision for its acceptance
and rejection is undertaken.
 HOUSE OF LORDS- the bill is sent to the House of Lords, where further amendments are
made before sending it back to the House of Commons.
 ROYAL ASCENT- at this stage, the monarch finally approves the bill and it becomes the
act of parliament
The branch of the government at the executive level is to draft the laws and regulations. The
parliament of the country is responsible for reviewing, amending and passing the laws. The
drafts can also be introduced by the individual members of parliament (Elliott and Quinn, 2015).
However, it is also evident that only a few laws reach the committee stage and a few amongst
those are being passed in the parliament.

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ORGANISATION OF THE JUDICIARY
At the top of the judiciary in the UK is the Supreme Court. The Supreme Court is the apex body
responsible for hearing appeals from the court in England, Ireland and Scotland.

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LO2: POTENTIAL IMPACT OF THE LAW ON A BUSINESS
CONTRACT LAW
Contract law has a significant impact on the business as the business organizations are engaged
in providing products and services for the customers. This would include purchase transactions,
reselling transactions and also rendering of services. For all these transactions, a contract needs
to be prepared (Beale et al., 2018). The contract essentially defines the terms and conditions of
the sale and purchase of goods and services for a certain consideration and also specifies the
terms and conditions for the same.
COMPETITION LAW
Competition law has a positive impact on the business organization as it helps in establishing a
business culture which would be helpful in maintaining the business competition. This would be
helpful for the business in improving and ensuring its development, such that it can remain
competitive within a given market. This law also helps in ensuring that the organizations with a
dominant position within the market place do not abuse the smaller businesses (Whish and
Bailey, 2015). This law inspires the business organization to focus on their improvements and
further positively impacts the customers by providing them with a huge range of products and
services to choose from. When business organizations comply with the competition act, the
market remains valuable and dynamic (Marson and Ferris, 2015).
DATA PROTECTION
For any operating business, the protection of business is very essential. The data protection act
has also been established which governs the organization towards the holding and processing
of the personal data. The personal data is the data which helps in the identification of any
individual (Carey, 2018). With the objective of ensuring data protection, the business
organization must appoint a data controller.

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THE TORT OF NEGLIGENCE
The tort of negligence is referred to as the legally wrong steps which result in the sufferings for
one party due to the improper care of another person. This takes place when the responsible
person avoids the foreseeable risks (Luntz et al., 2017). The civil law relating to negligence is
also applicable to those parties where there is no written contract.
CONSUMER PROTECTION
The law on consumer rights protects customers during the purchase of goods and services. The
consumer protection law helps the customers in many aspects including the protection for
counterfeit products, faulty goods, and poor services by service providers, problems with
contractors and builders and rogue traders among others (Howells and Weatherill, 2017).
HEALTH AND SAFETY
The UK government has established an agency called the health and safety executive which is
held responsible for encouraging the health and safety measures to be undertaken at the
workplace. Under the provisions of this act, the employer is held responsible for the compliance
with the provisions of the health and safety act and also ensuring that the employees are not
affected by any means during the operations of the company (Honeyball, 2016).
PRODUCT LIABILITY
The product liability directive in the United Kingdom is based on the provisions of the consumer
protection act 1987. Under this act, strict liability has been set out with regards to the dealing
of the defective products. The product liability measures are based out on the development of
standards. This helps the manufacturers in defining the design and testing requirements of the
products (Fairgrieve and Goldberg, 2017). Any failure of the companies in dealing with the
same would result in the seizure of documents and products and establishes a legal basis for
claims.
DUTIES OF EMPLOYER AND EMPLOYEE
THE EMPLOYMENT CONTRACT

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The contract of employment is signed between the employer and the employee to form a basis
for establishing the relationship between the employer and the employee. The employment
contracts must be in writing to ensure their legal validation. The employees are entitled to
obtaining a legal statement of the major terms and conditions of employment such as the
working hours, pay and holiday (Freedland et al., 2016).
EMPLOYER OBLIGATIONS
The employer owes various duties towards its employees which comprises of remunerating the
employees with the agreed compensation for the work done by him and also provide the
employee with the suitable work to the extent it was agreed. The employer is also responsible
for guiding the employees with the correct information about his rights and also observing the
valid health and safety regulations within the premises. Also, both the employer and the
employees have a duty of depicting mutual trust and confidence with each other.
EMPLOYEE RIGHTS IN THE WORKPLACE
Under the employment law, several rights of the employees have been listed, which are
available for him at the workplace. Under the provisions of this law, the employees are entitled
to get the minimum wages as defined in the national minimum wages. The other employee
rights include statutory minimum paid holidays, the minimum length of rest breaks and to
receive equal treatment even if they are being treated as the part-time employees for the
organization (Honeyball, 2016). The employees are also entitled to receive protection against
the unlawful deductions from wages, unlawful discrimination and whistleblowing.
MANAGING CASES OF DISMISSAL, REDUNDANCY, DISCRIMINATION, HEALTH
AND SAFETY
The cases related to the dismissal, redundancy and health and safety of the employees must be
dealt with in accordance with the provisions of the relevant laws. In case of breach of such
duties by the employer, he would be held responsible for undergoing the legal penalties
(Button et al., 2015). In certain extreme situations, it might also lead to the closure of business
activities.

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LO3: EXAMINATION OF FORMATION OF DIFFERENT TYPES OF BUSINESS
ORGANIZATIONS
UNINCORPORATED VS INCORPORATED LEGAL STRUCTURES
An unincorporated group is a collection of individuals who do not have any legal identity. All the
members are personally held liable for the actions taken by the group. These legal structures do
not possess the rights of entering into legal contracts. As these are not the legal structures, they
are not regulated by any kind of legal bodies and also the cost of establishing such entities is
very low (Watson, 2019).
An incorporated legal structure is a group where the group has its own legal identity. These
groups are similar to individuals who have their legal identities. The liability of each individual
within the group is limited and also the risk for individuals is reduced to a larger extent. These
groups can own property, the establishment of which adds up to the overall costs and expenses
for the business (Johnsson, L., 2017). The administrative burden of such an organization is high
as it is regulated by the legal bodies.
DIFFERENT TYPES OF BUSINESS ORGANISATIONS
SOLE TRADER
A sole trader is a form of business organization where a single member is responsible for all the
profits and debts of the organization. This kind of business has unlimited liability for the owner.
However, it is very simple to operate such firms as it requires minimal set-up and
administration costs (Acharya and Xu, 2017). The biggest advantage of this business is the
reduced filing requirements and fewer government regulations are imposed.
PARTNERSHIP
The partnership organization are being held and operated by two or more individuals. The
partnership is usually either a general partnership or limited partnerships. The type of
partnership agreement decides the liability of the partners. The partners pool together the
human and financial resources for running the business operations.