Business Law Report: Legal System, Business Formation, and ADR

This report provides a comprehensive overview of business law, encompassing the nature of legal systems, including criminal and civil law, and their respective purposes and sources such as custom, common law, Act of Parliament, and EU Law. It further examines the potential impact of law on businesses, particularly concerning employed and self-employed individuals, employment status checklists, and the gig economy, with a focus on cases like Pimlico Plumbers v Smith 2018. The report then delves into the formation of various business types, including sole traders, partnerships, and legal personalities, and the steps involved in registering a company, including the duties of directors. Finally, it recommends alternative dispute resolution (ADR) methods such as arbitration and mediation to resolve disputes efficiently and cost-effectively.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Describing the nature of legal system.........................................................................................1
TASK 2............................................................................................................................................2
Presenting the potential impact of law on business....................................................................2
TASK 3............................................................................................................................................4
Formation of different types of business.....................................................................................4
TASK 4............................................................................................................................................5
Recommendation........................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Business law is the body that is govern enterprise as well as mercantilism and it also
deals with issues of private and public law. The entire report is also based upon the business law
and report describe the nature of legal system and different sources such as Common law,
custom etc. further, Report will present the potential impact of law on employed, self- employed,
employment status checklist and into Gig economy. Then study will describe the formation of
different types of business organization and then recommended an appropriate legal solution in
order to resolve the area of disputes.
TASK 1
Describing the nature of legal system
Criminal law: It directly related to crime and it forbid conduct perceived as a
threatening, harmful and endangering to property, health and safety. It refers to the a body of
laws that is apply to criminal acts. For example, murders, assault and theft.
Civil law: It is the body that bound with rules which further defines and protect the
private rights of a citizen and offer legal remedies. For example, breach of contract, property
damage.
Particulars Criminal law Civil law
Purpose To maintain the stability of a state and
society by punishing breach.
To deal with disputes between
individual, organization where
compensation is awarded to
victim.
Case file by Government Private party
Type of
punishment
Compensation for injuries Imprisonment or fines, in
exceptional cases, the death
penalty
Sources of law:
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Custom: It is defined as a cultural ideas which is a regular pattern of a behaviour that is
further consider as a characteristic of life in a social system. It is one of the earliest source of law
and it is important for maintaining balance and peace in a society.
Common Law: It is that body of law that is driven from some legal decision of courts
and some similar tribunals . Further common law, as a body of law that is made by judges that is
adopted through a legislative procedure and modulate which are published by the enforcement
arm.
Act of Parliament: it is called primary legislation that is passed by the parliament. It can
creates a new law or change the existing law and that bill is passed by both House of common
and House of Lords.
EU Law: It is another source of law which is a body of treaties, law and court such that
whenever there is a conflict between EU law and national law, EU law takes priority over it and
bind all the national authorities.
Steps of bill becoming a law:
First reading: It is the first stage where bill is passage through the House of Lords in
which the content is read out by the members and after formally introduced, the bill is printed.
Second reading: in House of Common, the bill is presented by the government where
the view of opposition parties are heard and even they can vote against it (Procedure of bill
become law, 2019).
Committee stage: when bill is pass, then it comes to next stage, where a committee
consist of 16 to 20 MPs are seat and a new committee is also appointed for every new bill.
Report stage: This stage is quite lengthy and bills are also examined by the committee of
both houses and the report stage also follows a time period after the previous stage.
Third reading: in this, the final draft is reviewed and the House of Common cannot
amended substantially where House of Lord can made amended. After passing at previous stage,
the whole procedure is repeated to proceed for further stage.
The Royal Assent: It is the last stage where the Royal Assent is given by Queen to bill
that is completed by all parliament stages and that is declared to both houses. After reviewing
and with the assent of queen, the bill becomes law.
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TASK 2
Presenting the potential impact of law on business
Employed: In this, the employment law of UK states that employees should posses the
right regarding hiring, wages and benefits which are provided by the firm. In the same way, at
every working place, the employee should posses all the rights that are prescribe in Employment
law such as they should not discriminated, fair pay of work and they work under the company an
follow all the rules and regulations.
Self- employed: it is the state of working for their own rather than an employee. Such
that they are will provide own services but also sub-contract who work to others. Even for them,
the right of control for most of the aspect of the work is done.
Employment status checklist:
Factors Self- employee Employee
Condition of
equipment
They supply all small tools and hire in
workplace (Employment status
Checklist, 2019).
Company will provide all the plant and
machinery.
Tenure For fixed term or short term contract Done at open ended
Right of
termination
If any party breach law Prior notice is provided
Profit
criteria
If person performed efficiently. Employer provide profit in the form of
bonus and incentive scheme.
Reciprocalit
y of duty
Free to do the work if they are willing
to do
Employee has to perform duties as per
employer instruction.
Into Gig Economy: it shows that the concept of working is change and also reflect the
cultural change that is come through new generation of workers such as it is a temporary work
system that is based upon the short term relationship between the workers and companies. In
this, workers are employed for specific task and this is also done to achieve the advantage of cost
and quality. For example, Uber whose drivers are employed and perform their specific task as
per company and customer demand.
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Pimlico Plumbers v Smith 2018: In this case, the company want the employees of self-
employed but Smith who is an employee of a firm have a limited liability for his services such
that he is also treated as a employee in the company. Like, firm wants some requirement such as
to carry an identity card, wear branded uniform and drive the branded van so that Pimlico track
them. This all shows that they are worker as a employee rather than self- employed. After that,
when he fell ill, he claimed that he had been employed.
Thus, it concluded that his claim is right because he is performing the same duties which
an employee is performing. Because an employee under a contract has to perform all the duties
whereas, a self- employee can do the work by their own and no duties are imposed by the firm.
But in the case of Smith, firm is expecting the same duties which are performing by ane
employee.
TASK 3
Formation of different types of business
Sole trader: it is the simplest form of a business that is quite easy and inexpensive to set
up. In this, a person is only responsible for all aspect of a business and they only maintain the
full control of their business. Sole trader also retain all the profit of their business.
Partnership: in this, a variety or multiple owner are invested to run a business and they
all are agree to corporate to advance their mutual interest. Entire profit and loss is share equally
between partners. They all have limited liability (Adams, 2016).
Legal Personality: It effectuation that to be able of person all the judicial exact and some
work for the judicial group in order to get into into a parcel. Such that the directors are not liable
for any debts and they are enjoy the similar immunity. Such that in the case of Salomon v
Salomon in which it is confirm that the the institution is a removed judicial entity from the
directors and the directors are not liable for any debts because the firm is declared an insolvent
In Lee v Lee's Air Farming company which is another good example for legal personality
in which Lee was a director as well as sole trader and when he was killed, hid widow claimed
that she has to pay, but the court emphasized that company and Lee both are two different legal
entities.
Register a company: by registering a company, the business and some personal assets
are separated from each other and through registration, the business name is protected andd
secure and they also get access to funding as well.
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Steps needed to form a company:
 Choosing the name is the first step and if it is private firm then its name should end with
Ltd.
 Then memorandum of Association and Articles of Association should be done that shows
the objective of setting a business. Then all the documents should be signed and
stamping. A prescribe fees should also be pay to Registrar of Companies.
 If the company is registered then Certificate of Incorporation should be fulfilled that
shows that all the requirements of the Act have been met. In this way the company Is
formed.
Directors duties: In a company, the directors combine a number of duties and also be the
major shareholder as well. The duties are as mentioned below:
 they act in a good faith and to use the power for the purpose of a benefit of the company.
 They also promote the success of a company and they also have the duty to exercise
independent judgement and they should not delegate the powers.
 They should not gain any advantage from the use of position as a director.
 Further, the director of the company should not benefit personally from the transaction
which are entered on behalf of company fewer they declare it as a interest (Adams,
2016).
 They should posses the skills and judgement that will help to take better decision for the
success of a business.
TASK 4
Recommendation
Alternative Dispute Resolution: it is the simple procedure that is used to settle down the
disputes without any judicial proceeding. It is less costly and more prompt. This method allow
the party to understand each other's position and also allow them to come up with more creative
solutions that a court is not allowed to enforce. It is of three types such as:
Arbitration: It is one of the favoured method that helps to settle the disputes in
international commerce. It also apply the aid of a unmoral tertiary organization and it is akin to
an casual test. Such that later proceeding both side, the tertiary organization issues a conclusion
then the conflict party also united to be valid or not. Such that in valid, the determination can be
implemented by the court and that is also consider final. Further, it is often used for the
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resolution of a commercial disputes that is used particular in international commercial
transaction. It main principles are :
 the main purpose of intermediation is to return a just declaration of difference by an
impartial tertiary organization without any hold
 Both political party should be escaped to hold how their difference are resolute and to
such precaution as are essential in the national curiosity.
 In this process, the court is not interfere because both parties disputes are resolve with
the help of third party.
Apart from this, the expert is also an progressive assistant and will articulate a conclusion
and the procedure is also quite less ceremonial than an straight-out test because of many of the
regulation of information which are non applying.
Mediation: It is another informal alternative in which the intermediator are disciplined in
talk terms so that they convey hostile organization jointly and also effort to activity out a colony
in order to settle or agree the parties. Therefore, it is usually a non- binding and in this process,
the court is mendate but on the other side, the process is voluntary. Further, mediation is
completely confidential and parties are hold the correct to prosecute proceeding in this
negotiation process. In addition to this, in this process, the disputing party are work with some
third party i.e. mediator in order to resolve the disputes and they also ease the declaration of all
parties that is disputed by supervision the conversation of info and the negotiation procedure.
Even they also offer some creative solutions for settle down the disputes.
Negotiation: This process is always attempted first to resolve the disputes and this also
allow the political party to fitting together in order to resolve the disputes. The main vantage of
using this is that it allow the organization themselves to power the procedure and provide
answer. Further, in this type, there is no fair tertiary organization who come to compromise.
Moreover, the dialogue also happen when two organisation fit river the kind of redress which is
feeling by them, and they attempt to range any kind of an understanding which further satisfy
whole who are involving in it.
CONCLUSION
By summing up above report, it has been concluded that in UK, the legal system has its
different division of law that is criminal law, civil law, on the other side, it also have different
source of law which is common law, custom, Act of Parliament. Further, report concluded that
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the law ha its different impact upon employee, self- employee, employment status checklist and
Pimico Plumber v Smith. Apart form this, it has been concluded that there are different types of
organization and they all have their own rules and entities such as sole trader, partnership. It also
concluded that director and company both are separate entity and to resolve the areas of disputes,
Arbitration is used frequently.
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