Analysis of UK Business Law: A Comprehensive Overview

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Business Law

Contents
Business Law...................................................................................................................................1
Introduction......................................................................................................................................3
Section 1 Nature of legal system and the legislations impacting the businesses.............................4
Task 1...........................................................................................................................................4
a) Discussion on the meaning of the term Parliament is Sovereign and sources of law in the
country.........................................................................................................................................4
b) The role of the government in the law making process and how the law are applied in the
justice of courts............................................................................................................................6
c) Impact of company law, contract law and the employment law on the business organisation
.....................................................................................................................................................7
Task2............................................................................................................................................9
Difference between incorporated and unincorporated...................................................................10
Management and funding..............................................................................................................12
Pros and cons of partnership firm and limited liability company..................................................13
Section 2 legal solution to the business problems.........................................................................14
Appropriate legal solution to resolve the dispute......................................................................14
Case 1.........................................................................................................................................14
Case 2.........................................................................................................................................15
Conclusion.....................................................................................................................................16
References......................................................................................................................................17

Introduction
Business law is considered to be one of the most important law in the country which helps the
business organisation and various citizens to govern there daily operations. It is also known as
the commercial law as this is the law that deals with the both public and the private laws of the
country. This is seen that this law is considered to be the governing body that helps in building
various laws in the country. It is considered that the parliament is the law making body in the
country. The law also related to the company operations various bankruptcy provisions,
partnership firms, contract law etc. UK is considered to be the company where there are various
sources of law and treaties which helps in regulating the working of the country (Katsos and
AlKafaji, 2019). This report contains various sections which includes the overall explanation of
the parliamentary system and the sovereignty of the country. Also the description and the steps
that are included in the formation of the bill are also included in the report. Various types of
business organisation that helps in achieving the objective of making profit for the owners are
also defined with how the funding and management are done for the same. At last the different
solution for the cases would be provided with the helps legislations.

Section 1 Nature of legal system and the legislations impacting the businesses
Task 1
a) Discussion on the meaning of the term Parliament is Sovereign and sources of law in the
country
The constitution of the country is considered to be the one of the most important document for
every country that defines the functioning of country and the legal structure of the country. This
is the main document that provides the rules for citizens and the rights that they have in the
country. The constitution of the country is termed as the parliamentary sovereignty through
which the parliament of the country is known to be the supreme body in the country that forms
the law for the people of the country and has the operation to govern the structuring of the
country (Fici, 2016). This is the seen that the constitution of the country cannot be the overruled
by the courts of the country and it can only be changed through the process of the parliament
system. This is considered that the parliamentary sovereignty is also termed as “legislative
supremacy”. This specifies that the absolute power is held in the legislative body and this is
supreme over all the institutions of the government including the judicial and the executive body
of the country.
The legal system in UK is based on various laws and hence this is seen that this forms the
maximum governing part for the country. Some of the source of the UK legislations are defined
as below:
Legislations This is considered as the main source of law in
the UK constitution and is considered to be the
primary source of law for the country. This law
is enacted to provide funds, grants, regulate,
restrict or authorise the functions of the
government and the rules in the country. It is
seen that the parliament is considered to be the
law making body and the legislation are
considered to be born through the process of
parliamentary system. This is known to be the
supreme body that can frame the law for the

country.
Equity The term equity is considered to be the case
law that are developed by the courts in the
country. This law is considered to be prevailing
while deciding the case which related to the
common law (Samuel, 2016). The main
achievement of this law includes the trusts,
equitable and the remedies.
Common law This is considered as the law that is based on
the judgment that is given by the judges of the
court during the proceedings of the court. It is
seen that the decision that are made by the
judge of the country makes the judicial
precedents and hence are considered to have
unique characteristics for the country. The
decision that are made by the supreme court of
the country are considered to be the binding on
the other courts that are prevailing in the
country.
International treaties The term international treaties are defined as
the agreement that are entered into by the
government of the country so as to make
various steps in bringing the consensus among
the operations of the country and the
governance process of the country (Ebell,
Pilkington, Rowe and Srinivasan, 2017). This
also helps in protecting the rights of the
citizens of the country. Also the international
convention can be held through this statute.

b) The role of the government in the law making process and how the law are applied in the
justice of courts
Law is defined as the term which helps in providing the rule and the regulation to the citizen of
the country. This is seen that the government of the country introduce this so that these are
applicable on the majority of the people of the country. Hence this is seen that the role of the
government of the country is considered to be one of the difficult task for making the law. The
parliament is considered as the place where the law making process of the country is done. The
law making process in the country starts with the bill which is in the initial form and helps in
formation of the law for the country (Watnick, 2016). There are two types of the bill that are
introduced in the parliament of the country which includes the private bill and the public bill.
Hence for the formation of the law for the country includes the parliamentary process which
includes the following:
 First reading: This is considered as the stage where the first reading is done in the
parliament of the bill that has to be converted into the law. It is seen that this is the stage
where only the brief introduction of the bill is given to the members of the parliament.
 Second reading: It is considered as the stage where the government of the country
provides the details to the provisions of the bill are given to the ministers of the
parliament also the debate on the provisions of the bill are discussed more specifically so
that they are able to discuss more specifically on the bill. Here in this stage the voting is
done so as to achieve the objective of making it into the bill.
 Committee stage: This is the committee that is formed by the parliament of the country
which checks the feasibility of the bill and also provides the recommendation whether
the bill needs to be changed or not or ant amendments are needed to be made in the bill
for the purpose. Here this is seen that if the bill is rejected then it is sent back to the
government for further amendments to be made.
 Third reading: This is considered as the stage where the bill is presented in the
parliament with the amendments that are made by the government. Here the discussion is
made on the amendments that are made by the government on the bill for this purpose.
After this voting is done on the bill so as to bring it into further existence.

 Royal assent: This is the stage where the bill is sent to the royal commission of the
country for the final approval on the basis of which the bill is converted into law which
is applicable in all around the country.
This is seen that there are various laws in the country which are applicable in the courts while
applying them to the court system. This is seen that common law and the statutory law are the
two type of law that are applicable in the country and are used in the court system so as to
achieve the objective of the bringing justice to the citizens of the country (Ararat, Colpan and
Matten, 2018). These are applied in the court system in various forms which includes the
following:
 Statutory law: it is the law that is considered to be in the written form in the country and
is passed by the parliament of the country. The law is created by the government of the
country and is used in the court system through the form which includes the using the law
or the legislation directly to the case or the issue. This is considered that court can
enforce and interpret the legislation that are created by the government of the country.
The judge of the court uses the statutory law in the way that they are formed which
helped them to achieve the objective of maximising the performance.
 Common law: this is the law that is used in the court system when the statutory law is
unable to bring out the solution for the same. It is the considered as the unwritten law
which is organised as being changed from time to time.
c) Impact of company law, contract law and the employment law on the business organisation
There are various laws that are made by the government of the country and this is seen that these
laws has impact on the performance and the operations of the organisation (Santoro, 2015).
Hence the impact of these laws are described below as;
 Contract act: This is the law that is made by the government of the country so as to
regulate the contracts that are formed between the people of the country. This rule helps
in the identifying the conditions that helps in the formation of the law and it also specifies
the penalty in case of any breach made between the parties to the contract. The contract
law also deals with the civil matters and it also helps in ensuring that the rules and the
agreement of the organisation are served in proper manner so that the contracts that are
formed between the organisations can be properly regulated. It is seen that the business

organisation are impacted through this when they made the contract with the customers
for the sale and the buying of the goods.
 Company law: This is the law which is enacted by the government of the country so that
they are able to regulate the performance of the company. The law is defined under the
companies act 2006 which is the act enacted by the government of the country. The
company law also provides the rules and regulations which helps in the taking into
consideration the laws through which the companies are made. This law provides the
boundary to the company to function their operations more precisely. For the company to
get themselves registered has to make the application to the companies house and has to
file MOA and AOA for this purpose. It impacts the company in a way that the company
has to comply with the various rules and regulation for the doing the operations in the
best possible manner.
 Employment law: This law is enacted by the government of the country so that they are
able to regulate the employer and the employee of the company to perform the
obligations. This is seen that this law helps in specifying the rights and the duties of the
employer and the employee. Through this the employee get empowered as they cannot be
exploited by the malfunctioning of the employer. This law specifies the national
minimum wage that helps the business organisation to provide the minimum wage so as
to fulfil the demand of the employee more securely.

Task2
According to the case of JPM who after completing their graduation started the partnership
venture “JPM Publishing”. They successfully traded for a few years and seek for the extra
funding so as to expand the business. They have been advised by their accountant that they can
register their business as a limited company. There are different business’ types in which the
JPM can seek to register.
Corporations- Corporation is that type of business that has separate legal entity from its owners.
All the UK companies have to get themselves incorporated under the Companies Act, 2006. The
focus of the legislation of the act is to protect the stakeholder’s interest and rights. It also
provides the duties and the responsibilities that the directors or the managers of the company are
responsible for. The names of the members are subscribed to MOA of the company who is called
as the subscribers. The company can be formed by one or more members. In the UK the limited
company is registered commonly having limited by shares. Various forms can be taken by the
companies such as voluntary association, financial entities and business entities that aim at
gaining the profit (Dammann, and Schündeln, 2012).
Limited liability partnerships (LLP) - In UK LLP are not treated as the partnership instead they
are treated as bodies of incorporation which is much similar to other types of companies. All the
partners in LLP have limited liability which means that the partner is responsible only for the
acts done by him and is not responsible for the negligence or misconduct is done by another
partner. At least two persons are required for registering as LLP. There is no mandatory
requirement for a written agreement. The partners are allowed for managing the business
directly.
Sole Proprietorship- It is the enterprise type that is run and owned by one person who is called
as a sole trader. There exist no distinction between a business entity and owner. The business
profit is received solely by the sole trader and he is responsible for all the decisions made by
him. The losses and debts of the business are also bear by him. The proprietor owns all the
business assets and debts. The name of business or trade name can be used by the proprietor
other than the legal name. A sole trader has no identity separate from its business under the law.
Partnership- In partnership, two or more parties enter into the formal agreement for operating
and managing the sharing of profits and business. Partnership Act, 1980 is applicable to
partnership firms of the UK in which the partners are having unlimited liability who is liable

personally for the losses and debts of the business. The profits are shared among the partners as
per the contribution made by them or according to the pre-decided sharing ratio (Rashid, 2014).
JPM can register as the limited company which will be beneficial for JPM as three of them will
have limited liability. The corporation’s legislation will also protect them with their rights and
interests.
Difference between incorporated and unincorporated
In United Kingdom, there are several forms of business structures which are operating and are
governed by the provisions of Companies Act 2006. The companies and firms operating in UK
are categorised as incorporated companies or unincorporated firms. Hence for the business
owners it is important to get acquainted with the difference between these two structures.
Within the category of unincorporated firms, the included business structures are:
 Sole trading company
 Partnership firm
And within the category of incorporated business structure there is included:
 Limited liability company
 Private and public companies
 Community interest company (Tutor2u, 2018).
The image below provides for the various business structures in UK

Fig. 1 Different forms of business
(Source: Tutor2u, 2018)
The following is the difference between unincorporated firms and incorporated companies:
Points of differences Unincorporated firms Incorporated company
Examples  This business structure
includes:
o Sole
proprietorship
o Partnership firm
 This business type
includes:
o Private and public
company
o Company for
community
interest
o Company limited
by share or
guarantee (limited
liability company)
Business obligations and
liabilities
 The liability is personally
on the owner or partners
 The liability is not on the
owner instead it is on the

for the debts of the
company or firm.
company to pay the debts.
Tax rates  This business structure is
subjected to individual tax
rates which is higher as
compared to corporate
taxes (Hannigan, 2018).
 This business type that is
companies are subjected
to corporate tax rates
which are comparatively
lower than individual tax
rates.
Cost of incorporation and
operation
 This business type has
relatively low cost for the
operation.
 Its formation is also easy
and has no complication
for the same.
 The incorporation of
companies is complicated
and this procedure also
requires high cost for
registration.
Paperwork and other related
work
 Under this business
structure the paper work is
less and no complication
of preparing annual and
quarterly report is
required.
 Incorporated companies
are required to file
quarterly and annual filing
of reports which are
subjected to the
regulatory agencies of the
government (Hannigan,
2018).
Management and funding
Apart from the difference between unincorporated and incorporated company, the business
owners are also required to know the options for managing and funding the business
organisations. The following are the available options for the same:
Business type Management Funding
Sole trading company  By owner of the company  Personal saving
 Loans
Partnership firm  By partners of the firm  Loan in firm name