Business Law Unit 7: Impact of Legislation on Business

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Unit7: Business Law
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Contents
Introduction......................................................................................................................................3
Section1. Legal system's nature and impact of legislation on business...........................................4
Task1................................................................................................................................................4
“Parliament is sovereign”............................................................................................................4
Law sources of UK......................................................................................................................4
Role government of UK plays in the process of making the laws...............................................5
Statutory and common law application in justice court...............................................................6
The company, employment and contract law's impact on business............................................7
To analyze the potential impact of regulations, legislation, and standards on business..............8
Task 2 (LO 3)...................................................................................................................................9
Difference between the unincorporated and incorporated business..........................................10
Section 2 legal solution to the business problems that have been identified.................................13
An appropriate legal solution to resolve the dispute.................................................................13
Case 2 legal solution to the Amber limit...................................................................................14
Conclusion.....................................................................................................................................16
References......................................................................................................................................17
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Introduction
Business law is encompassed with all the laws that applied to the business at the time of forming
and running it. The rules are established by the business laws that are required to be followed by
all the business. There are different purposes of the business laws including the protection of
liberties and rights, establishment of standards, maintaining order, and dispute resolution. Both
federal and state laws are included in this along with the administrative regulations. The
enactment of the business law is done by convention, agreement, and international or national
legislation. In this report's first section the parliamentary sovereignty in the UK will be
described. After which the discussion will be made regarding the sources of the different law of
the UK. Private and public bills are there which are firstly framed in the draft and after passing
through the different stages by introducing the amendments and voting by MPs the bill finally
becomes an act of parliament. Injustice court, the common laws, and statutory laws are applied
while making decisions. The business organizations are greatly influenced by the provisions of
employment laws, contract and company law which is mandatory for the business to follow.
There are both the negative and positive impact of the regulations, legislation, and standards on
business. Task two will cover the different forms of business and evaluation of the
unincorporated and incorporated business along with the pros and cons of the company and
partnership. Section two will discuss the legal solutions to Champion Ltd. and Mr. Anderson.
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Section1. Legal system's nature and impact of legislation on a business
Task1.
“Parliament is sovereign”
In the constitution of the UK, “parliamentary sovereignty” is termed as the main principle. In the
UK the parliament is considered as the supreme legal authority that has the power of law creation
or ending. The overruling of legislation cannot be done by the courts and no such laws can be
passed by the parliament that cannot be changed by the parliaments. It is also called as the
legislative supremacy or parliamentary supremacy. Absolute sovereignty is held by the
legislative body and is supreme over other institutions of government. In the UK there is no
single written constitution and is, therefore, described as wholly uncodified and partly written.
The previous legislation can be changed or repealed by the body of legislation and it is not bound
by any written law.
Law sources of UK
Different law source's principles consist of the UK laws including the following-
 Legislation- The parliament is responsible for the creation of legislation. The
parliamentary acts are considered as the most important legislation piece. Any law can be
enacted by the parliament as supreme legal authority resides in the hands of parliament. It
is superior in comparison to other law sources and no challenge can be filed against it in
any court. It splits into delegated and primary legislation (Park, 2012).
 Case Law- these are also known as the common laws that are the laws which are made by
the judges on the basis of their judicial decision-making. These decisions later become
the binding precedent for the court below. These laws are framed in the case where there
is no legal or statutory legislation prevails and these decisions become guidance in
similar subsequent cases.
 International treaties- These are signed by the UK government and become binding after
getting ratified. Most of the conventions of IT come into force when they have been
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ratified by the stated number of signatories. The incorporation of the same can be done
into statutes.
 European Union Treaties- It is the international law source. EU laws are applicable and
binding to all the EU member states and the UK being the member of EU is under
obligation to follow these laws including the precedents, regulations, treaty provisions,
and directives.
 Equity- The creation of the equity is done by the Chancery court and prevails over the
common law. It has a discretionary application. Equitable remedies, trusts, probate, and
charities are the main achievement of equity.
 Customs- These are not in written form but if practiced for a long time period then it can
become the source of law (Besley, 2015).
Role government of UK plays in the process of making the laws
The introduction of the majority of the parliamentary act is done by the government. The
instructions are provided by the government of UK to civil lawyers for drafting the bill. Either in
the House of Lords or House of Commons, the drafting of the bill begins which after passing
through the different stages or getting the approval from both the houses becomes the final
parliamentary act. Three main bills include the following-
Public bill- Entire country or a large portion of the country will be affected by the public bill. In
order to change the laws in the country, the cabinet prepares them.
Private member bill- some of these bills become an act and are prepared by the MP who is
backbench. Then the government is persuaded by MP for allowing enough time of parliamentary
for the bill to go through.
Private bill- These bills include corporate, individual or local interest matters and particular
persons or locality is affected by these (Frank, and Bix, 2017).
There is a prescribed procedure of the bill that is required to be followed for becoming the act of
parliament and it should be approved in both the houses.
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First reading- In House of Commons, the bill title and the content of the bill is read which is
then published.
Second reading- The main debate is involved in the House of Commons on the bill’s general
principle. Whether the proceeding should be done further or not is decided on the basis of voting.
Committee stage- The main purpose of this stage is to do the detailed examination of the bill in
the House of Commons and in the case where it is found amendments can be made in the bill
(Pauwelyn, 2014).
Report stage- The reporting of the debate is done by the committee and amendments are made
back to the House. The subject of the debate can be selected by the speaker and voting is
conducted by the house.
Third reading- In the house, the representation of the bill is made along with the short debate.
The voting is conducted with respect to the acceptance or rejection of the bill.
House of Lords- For going through the above five stages the bill is sent to HOL which make the
further amendments and sent it back to the HOC for considering the amendments.
Royal ascent- A bill becomes law once received as royal assent and is termed as the
parliamentary act (Zander, 2015).
Statutory and common law application in justice court
Statutory law- These laws are considered the more formal body of the legal system which
consists of legislation that is written. These are framed on the basis of rules and regulations
which are mandatory to be followed. The statutory laws are considered by the justice court while
making the decisions. These are codified acts or statutes and are constant which are passed by
the legislature. These laws are created by the elected legislature. The enforcement and
interpretation of the statutory law are done by the judiciary but the creation of such laws cannot
be made by the judiciary (Anderson, et. al, 2012).
Common law- These are the case laws that allow judges for deciding the cases that are based on
the rulings of the prior cases with circumstances that are similar. Common law keeps on
changing. These are the judicial precedents and if it is found by the court that the dispute in
present is distinguished fundamentally from the previous cases and there does not exist any
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legislative statute or the law is silent or questionable then it is the duty of the judges to resolve
the issue (Gluc, 2012).
The company, employment and contract law's impact on business
Company law- In the UK, the companies act, 2006 is applicable to the companies and all the
companies are mandatory to get registered under this act. This law explains the rules and
regulations that every company has to comply with along with the provisions of protecting the
interest of the stakeholders and managers and director’s duties and responsibilities.
Employment law- UK employment law regulates about the relations between trade unions,
employees, workers, and employers. 8.21-pound minimum wage is paid to the employees having
age over 25 years under NMWA, 1998 (National Minimum Wage Act). Various other rights are
provided to employees in working time regulations, 1998 under which 28 days holidays are
provided which are paid, the break is given to employees from work and an attempt is made for
limiting long working hours. There is a great impact of employment laws on business as the
employees will work with full productivity if they will be provided with good working
environment and working conditions. Employment laws should be followed by every
organization as the skilled and competent employees will stay with the organization for the
longer time period only when they will be treated well and not like slaves (Taylor and Emir,
2015).
Contract law- English Contract law is law’s body that regulates contract in E&W. Gradual
change is experienced in this due to the membership that of the UK in the European Union.
Contract is the agreement which is enforceable in court. It is ensured by the English Law that
high value is truly consented for the dealings due to which they bind in the court. Various civil
matters are solved in the contact laws. The law focuses on ensuring that the parties to an
agreement are safeguarded by their rights and duties and in case if there is a breach of contract
then the compensation will be paid to the aggrieved party. English Common law is termed as the
contract law in the UK. Most of the relationships of business are formalized through the
contracts. It is very significant for the companies to understand the impact of the contract laws
on the business organization. The business is affected by the contract law due to the fact that all
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the business are providing product or offering the services meaning that either they have to resell
or purchase or render services. a contract is required to be in place for every transaction.
To analyze the potential impact of regulations, legislation, and standards on business
Regulation- Regulation refers to the rule of order that have the law force which is prescribed by
the competent or superior authority. The issue of regulations is done by the different federal
department of government for carrying out legislation’s intent enacted by Congress. The taxation
policies are the government policies that impact the business directly as this is based on the
amount of money which is earned by the business. Proper implementation of the law is ensured
by the effective regulation application (Halder, et. al, 2012).
Legislation- Legislation refers to the statutory law that is enacted by the parliament. Before
becoming the law the legislation's item is known as a bill. It is the primary source of law that
focuses on protecting and promoting people's rights. There is the various purpose of the
legislation including authorizing, sanctioning, granting, regulating, restricting or declaring.
Legislation effect business in different areas including environment, consumers, employment,
health, and safety. It ensures that the employees are treated in a fair and un-discriminatory way,
business and suppliers are dealt with complete regulations. For ensuring fairness people’s duties
and rights are regulated for carrying out the business.
Standard- Standards refers to the technical documents that are designed with the purpose of
using it as guidelines, rules, and definition. All the interested parties are bought together such as
regulators, customers, manufacturers. It is mandatory for the different organizations to mention
the standards with respect to the quality of products and services that are offered to the customers
in its article and should be followed mandatorily. These work as a base for the company to work
with. Hence, it can be said that they play a vital role in business.
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Task 2 (LO 3)
JPM are the three partners who are already running a business in the form of partnership and
demands to expand the business. While this is considered that they all want to expand the
business and for this, the accountant of the partners has suggested them to form the company
type of business. Hence for this, there are various structures that have been suggested to them
which are discussed under:
 Corporation: It is considered as one of the most important types of business which helps
In identifying the business opportunity in the other part of the country. as this is
considered to be the business where the expansion opportunity is maximum. The benefits
that this type of firm has includes raising of the funds at large. It is seen that for the
formation of the business it is important to file the MOA and AOA so as to get
themselves registers in the registrar of companies. This helps in achieving the objective
of the formation of the company. the management is done by the directors and managers
that are appointed for the company. there is a various source of raising funds which
includes the shareholder's funds, debentures, bonds, bank loans, creditors, etc.
 Partnership: These are considered to be the form of business organization which is
formulated so as to perform the function of achieving the share profits among the
partners. This is considered that in this form the raising and expansion opportunity is
considered to be relatively low as compared to the company form of business (Ng, 2015).
It is also seen that it is considered to be the expansion of the owner of the business and
the partners of the business. The management of the partnership is done by the partners of
the firm. This is seen that there is a various source of raising funds which include the
owner on capital, bank loans, creditors, etc.
 Sole proprietorship: This is the type of business organization which is considered to be
the expansion of the owners of the business. This is easy to form and manage as the
management is done by the single owner who is the owner himself and formulated
through the submission of the documents that are filed to the registrar. It is considered to
be one of the easiest form of the business in case of formation. This is funded through
owners own capital.
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Difference between the unincorporated and incorporated business
There are various differences between the unincorporated and incorporated business which is
organized and formulated within the country. As incorporated business is considered to be the
legal business that has an existence in the eyes of law while on the other hand, the
unincorporated business does not have an existence in the eyes of law (Olsen, 2015). The
incorporated business can sue and can be sued. While the unincorporated business cannot be sue
or sued.
There are various advantages and disadvantages that are related to the company and the
partnership form of business. The government of the country defined the partnership and the
company under different laws. This helps in getting information about the different forms of
business that are functioning in the country (Akdeniz, 2016). It is seen that these are the main
and important form of the business that is done so as to achieve the objective earning profits in
the country. This is seen that there is various difference that exists in the partnership and the
company's type of formation. Hence some of the advantages and the disadvantages that are
existing here include the following:
Basis Partnership Company
Advantages  This is the type of firm
where there are two or
more than two partners
who enter into an
agreement so as to
form the business
organization having
the objective of
sharing the profits.
 These are created
through the process of
bringing the mutual
 This is the association
of the persons who
desire to invest the
money into the
business organization
so that they are able to
achieve the objective
of maximizing the
performance and the
book profits on the
share invested.
 The company form of
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agreement between the
partners of the
organization
(Dorresteijn, et. al.,
2016). Hence are easy
to be formed.
 The obligation of
making the registration
is considered to be a
mutual agreement
between the partners
and is considered to be
done voluntary based
on the partner's
discretion.
 The minimum number
of the person that is
required for the
purpose of the issue
includes the two or
more.
 The partnership firm
does not have the
obligation to use
partnership word after
the initial name.
business has the power
to be a separate legal
entity and is
considered to be a
separate entity in the
country.
 The minimum number
of the person that is
required for this is two
in case of a private
company.
 The audit of the firm is
mandatory to be done.
 The liability of the
shareholders is limited.
 The company has the
power to sue the other
person in its own
name.
Disadvantages  The partnership firm
does not have the
separate legal entity in
its own name.
 The audit of the firm is
 These are considered
to be created by
incorporation done
under the companies
act. Hence requires a
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not mandatory to be
done (Hayes, and
Wilson, 2018).
 The liability of the
firm is unlimited.
 The partnership firms
are not able to enter
into the contract in
their own name.
huge amount of paper
resources that are
considered to be a
time-consuming
process.
 These types of
business organization
are registered with the
companies act and
hence there is the use
of a lot of paperwork
which is required to be
done and hence
considers to be the
time-consuming
process.
 The company has the
obligation to use the
word limited or Pvt.
Limited words after
the initial name.
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