Unit 7 Business Law Report: Legal System and Business Impact Analysis

This report provides a comprehensive overview of business law, exploring the nature of legal systems, including sources such as legislation, common law, and European law, along with the role of government in law-making. It analyzes the impact of employment and contract law on businesses, differentiating between legislation, regulations, and standards. The report further examines the formation of various business organizations, such as sole proprietorships, outlining their management, funding, advantages, and disadvantages. Finally, it suggests appropriate legal solutions for resolving disputes and compares different sources of legal advice, concluding with an evaluation of the effectiveness of the suggested solutions. This report, a valuable resource for students, is available on Desklib, a platform offering past papers and solved assignments.

UNIT 7
BUSINESS LAW

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1 Explain the nature of legal system...........................................................................................1
LO2 The potential impact of the law on a business.........................................................................4
LO3 The formation of different types of business organisations....................................................5
LO4 Recommend appropriate legal solutions to resolve areas of dispute.......................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business law governs businesses by dealing with different set of laws like private law and
public law (Reiners, and Wood, 2015). This report will lay emphasis on explanation of nature of
legal system. Different sources of law and role of government in law making along with common
law and statutory law will be explained in the report. This report also covers impact of laws on
businesses. The employment law and contract law will be explain in the report and their impact
on business will also analysed and explained. Difference between legislation, regulation and
standards for analysing impacts on business will also discussed in this report. Also, the report
will discuss about different business organisation formations. The management and fund of these
businesses will also explain along with specifying advantages and disadvantages of every type of
business organization. A critical evaluation will also be highlighted for choosing the best among
the all available business organisation. The report will highlight some recommendation for
appropriate legal solutions to resolve areas of dispute. The comparison and contrast of different
sources of legal advice will also be discussed in the report. Also, the effectiveness of suggested
legal solution will be explained in the report.
LO1 Explain the nature of legal system
A legal system is a systematic approach which resolves disagreement and disputes. It also
provides norms for people of society. Legal system protects from chaos which is created by
conflict between communities and the social groups (Forkert, and Lopes, 2015).
Different sources of law
 The legislation – It plays a significant role in law formation, the law which is formed by
legislature is called legislation. The legislative law is applicable all over the UK unless
stated (von Benda Beckmann, and von Benda Beckmann, eds., 2016). UK doesn't have
written constitution parliament is legal supreme authority. The legislation has power to
infringe existing law or enact any law. The legislation is important source of law
formation as they can not be forbid while formulation of law in any country.
 Common law – Decisions made by appellate courts are major sources of law of UK as a
legal system which is adopted by Wales and England. This law is formed for the basis of
principles which is established by appellate court and apex court. Therefore, this source
of law provided by higher authority and judicial for lower divisional representatives is an
vital law source while formulating law.
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 Act of parliament - An act of parliament is concerned with making changes in law
which is existing or making of new law (Guo, Krever, and Teoh, 2016). The bill is
approved by house of commons, house of lord and royal monarch. The bill become law
only when they all approve this bill by these authorities. It is most important and
mandatory source of law while formulation of any law by ministries of government.
 Convention and Treaties – UK is one of the signatories of European Convention on
human rights being a member of state council Europe. UK enact The Human Right Act,
1998 which enables all the UK courts to protect stated rights in European Convention on
human rights. UK is a part of United Nations, thus it enact laws which are in relation to
treaties and conventions signed by states which is forming UN parts. Therefore, the
convention and treaties are important source of law which is used while formulation of
any law in country. European law – This is a law system which is operate in state members of European
union. Also, the members of European union operate laws of UK (von Benda Beckmann,
and von Benda Beckmann, eds., 2016). European Union law is taken into consideration
while formulation of Laws in UK. European law is also a source of law making in UK
law. The European union law need to be followed for law formation due to this it is a
source of law.
Role of government in law making and common and statutory law are applied in court justice
 Identification of need – The ministry authorities of government analyse the legal system
for the process of identification of need. They also evaluate condition of country
according to requirement of need. The ministries of government properly analyses the
country conditions such an evaluation of crime rates, misconduct, etc. which helps them
in providing a basis of law making (Asche, Oglend, and Osmundsen, 2015). Also, the
ministry authorities analyse and compare the condition of country with the legal system.
The need of new law is identified by ministries of government authority after proper
comparison of new law or changes in existing law.
 Formation of bill – The ministers play a major role beginning from identification till the
implementation of new law or either any changes or modification regarding existing law
as per the requirement. The bill formation is step which comes after need identification of
new law or any changes in existing law (Lynch, Whitaker, and Cygan, 2019). The
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ministries of government authority then formulated a bill in form of a draft and execute
further process of law enforcement.
 First reading – A bill is draft which is made according to government instruction. The
title of bill and components in comprises is read in house of commons. Nothing is done
on this stage unless reading.
 Second reading – On this stage bill is discussed by members of parliament and debate
was executed on this stage for proceeding to further stage of bill or not (Manji, and
Cullen, 2016).
 Committee stage – At this stage bill is referred to committee of house of commons for
detailed and further examination. This committee suggest about need for amendment.
 Report stage – On this stage, report is prepared by committee by conducting a debate in
concern of these committee (von Benda Beckmann, and von Benda Beckmann, eds.,
2016).
 Proceedings in the House of Lords - After this bill is sent to house of lords for further
process. The amendments made by house of commons are further analysed by house of
lords.
 Royal Assent – At this final stage bill becomes an act by the approval of royal assent that
is monarch which has a final authority to make approval of an act.
Common law are performed from long time phase by a particular community. Common
laws are formulated by higher divisional court therefore it is applicable only to lower divisional.
On the other hand, statutory laws set down by legislature and used to define the laws which are
written and unlike common law, the statutory laws are applicable to the whole UK.
Effectiveness of legal system in terms of development and reforms
The law of Wales as well as England are reviewed by law review commission since 1965
(von Benda Beckmann, and von Benda Beckmann, eds., 2016). This commission is a body
which in independent for examine effectiveness and fairness of the law.
In 2010, the law commission act, 2009 aims at improving ratio of implementing the
recommendations. Further since 2016, there has a reform programme which is launched in 2016
(Jaycox, Langley, and Hoover, 2018). But on the other side of effectiveness, the legal system
has some limitation too. This law is not in written form which depletes their reliability.
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LO2 The potential impact of the law on a business
Impact of contract law and employment law on business.
Employment law – This law is related with employees and the companies in which they are
working. The employment law comprises of laws which are for the benefits of employees and
the company. Also, this law enables them to get updated about rights applicable by this
employment law.
Employment law has different set of laws stated which are Employment act, 2002, Anti
discrimination act, 1991, Minimum wages act, 1998, etc (Daniel, Cano, and Cervera, 2015).
This law controls and regulates employees activities as well as companies operations and
management. This law controls businesses by providing guidelines according to stated
provisions. Also, it make aware businesses about laws which can be beneficial and found
profitable for them. The employment law impact businesses in order to regulate them and all
business entity need to follow this law for smooth functioning.
Contract law – A contract law is an agreements which binds two or more parties to perform
their tasks which they agrees to perform in contract. This law governs while making of contract
and regulate all transactions of business within stated contract (von Benda Beckmann, and von
Benda Beckmann, eds., 2016). This law need to follow by all business entities who enter into
contract with other businesses. The activities of sales and purchase in business are done in
accordance with contract law.
Also, the companies follow this law in order to overcome financial uncertainty. The
businesses is obligated to follow this law of contract while performing business operations for
smooth functioning. The lawful activities such as sue on other member is also only possible
when the businesses follow contract law properly.
Difference between legislation, regulation and standards.
Laws are system of rules which is made by country government, state of city government.
The rules are enacted by a legislative body and signed by a ranking official such as governor or
president. In order to be legal every person have to follow law implemented by government
(Pozen, Nallareddy, and Rajgopal, 2017). Laws which are related to businesses like employment
law, contract law, etc. which need to follow by businesses to perform all legal activities and to
hinder factors which can affect their functionality.
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Regulations are different from laws as they are instruction for enforcement of laws and
how they carried out. The regulations are also called administrative laws or rules. The regulation
are carried the law force and the applications of regulation on laws are mandatory. Businesses
along with laws need to follow regulation so that they can get a proper guidance of the
application of laws in their business smooth functioning.
While Standards are different from all. They are requirement or guidelines which is
provided for make things work for products, system and service (Do, Cowling, and Blackburn,
2015). Standards are need to used consistently to ensure safety, efficiency and quality. The
standards are formulated in form of reference documents which provides a detailed guidelines or
criteria for involvement (von Benda Beckmann, and von Benda Beckmann, eds., 2016). The
standards affects business activities like in order to follow standards businesses need to set their
quality of products according to standards stated for their products. They did not go beyond the
standards formulated.
LO3 The formation of different types of business organisations
Sole proprietorship - A sole proprietorship is a business which is run by individual person. In
this business, individual person is responsible for investment and decisions making. The main
attribute which attract this form of business is control and management is in one hand. But on the
other hand there is unlimited liability of owner towards the business and risk is also bear by
individuals who run sole proprietorship (Sole proprietorship, 2019).
The sole proprietorship is managed by owner of business and also funds for investment in
sole proprietorship is the responsibility of owner's only (von Benda Beckmann, and von Benda
Beckmann, eds., 2016). The individual owner is responsible for management of operations as
well as funding of business.
Advantages of sole proprietorship
 Owner is able to control entire business activity on its own. The financial accounts of sole proprietorship is not need to disclose into public therefore,
confidentiality regarding accounts remains maintained by proprietorship (Reiners, and
Wood, 2015).
Disadvantages of sole proprietorship
 The owner faces unlimited liability towards sole proprietorship as the owner is only
responsible for managing and operating functions of business.
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 Sole proprietorship has one disadvantage too that the ability of owner is limited and
owner can't take decisions in all field of business (McCormack, and Anderson, 2017).
 The source of capital in business is also low because owner need to invest alone. The
owner manages their saving or take fund from their friends, family and peers.
Partnership firm - The partnership firm is a form of business which is run by two or more
members. The members came into partnership firm and execute their business activities by
pooling capital and make a collaborative decision making.
In partnership more than two persons work to form a firm of partnership and up to twenty
people join to undertake a business activities of partnership firm. The management and fund of
businesses are responsibilities of partners only (Galasintu, Supanit, and Chaiittivej, 2018). They
pool their money for investment in capital and also undertake activities of decision making for
the same.
Advantages of partnership firm
 By partnership, there are generally more innovative ideas and skills for judgement
contributed by partners in order to execute business decisions. The sole proprietorship need to bear higher rates of taxes while in partnership firm has
lower tax rates than proprietorship.
Disadvantages of partnership firm
 The partnership firm faces limitation by lack of continuity of business by any partner.
 Also, the partners have unlimited liability towards the firm (Pozen, Nallareddy, and
Rajgopal, 2017).
Limited company – The company offers share to public for raising funds for this these
companies disclose relevant information to public. So that they may able to gain interest of
investors in their company. Also, the investors becomes liable to share profit and loss with the
company. The contribution by public encourage the company to raise their capital as well as
investment (Do, Cowling, and Blackburn, 2015).
The directors need to follow all duties stated in companies act, 2013 for smooth
functioning of the limited company. The investors of limited company who holds share of the
company is liable for management and fund for the company (von Benda Beckmann, and von
Benda Beckmann, eds., 2016). They participate in decision making of the company and also
contribute their money for the investment in business to grow.
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Advantages of limited company
 The limited company is beneficial for the companies growth and expansion. These
companies attain opportunities by operating on large scale. Another advantage is that limited company can access better capital and investment than
sole proprietorship and partnership firm.
Disadvantages of limited company
 The company is wholly liable for directors activity in limited company in accordance
with the case of Salomon vs Salomon company (Solomon vs solomon company case,
2017).
 Also, the issues related to controlling and ownership is there in limited company because
they raise fund from outside the business (Lynch, Whitaker, and Cygan, 2019).
By critically analysing all the forms of business organisations. It has been drawn from the
study is limited company must be preferable among all other. As the limited company shares risk
and also capital investment is high in this company.
LO4 Recommend appropriate legal solutions to resolve areas of dispute
In order to resolve the cases such as claims, conflicts and disputes on which other than
the legal proceedings there has been use of alternative dispute resolution techniques (Jaycox,
Langley, and Hoover, 2018) . The legal advice is being presented by a legislative authority out
of court premises. However, types of ADR have been considered under the law such as:
Arbitration - It has been denoted as an informal trial on which influences of a neutral
third party to present a solution (von Benda Beckmann, and von Benda Beckmann, eds., 2016).
They analyse case and make a mutual agreement between the parties affected to resolve such
disputes.
It is executed and depended on judgement of third part. Companies can follow method in
order to resolve solve disputes in the business entity (Guo, Krever, and Teoh, 2016). The third
party hears all the issues of parties which are concerned with their problems and then provide a
judgement which need to be followed by the parties.
Mediation - It has similar aspects as compered with the jurisdiction followed in
Arbitration. However, in this case there are non-binding agreements on which parties mutually
agreed upon a relevant solution to the issues (Mc Cormack, and Anderson, 2017). Moreover, in
relation with this where court has provided a mediator who is a legal practitioner and they bring
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advises to parties by considering all the legal norms and regulations as incorporated by English
parliament (Galasintu, Supanit, and Chaiittivej, 2018) .
The another method of Alternative Dispute Resolution (ADR) could be adopted by
companies in order to solve their internal dispute (Galasintu, Supanit, and Chaiittivej, 2018).
The only difference is that in mediation third party's decision is only taken as suggestions and
following it or not is completely the choice of parties.
Negotiation – It is a resolution method on which both the parties agree with some adjustment
and resolve their disputes (Lynch, Whitaker, and Cygan, 2019). There is no involvement of
third party is there in negotiation just like arbitration or mediation. The parties agree at some
point in which they get agree to settle their internal dispute (Asche, Oglend, and Osmundsen,
2015).
By comparing and contrast of different sources of legal advise including mediation,
arbitration and negotiation and support for dispute resolution (von Benda Beckmann, and von
Benda Beckmann, eds., 2016). The Alternative Dispute Resolution is cheap and less time to
consume for members. Therefore, method of arbitration Alternative Dispute Resolution (ADR) is
best for companies who have issues with parties.
CONCLUSION
This report was discussing about business law. The report was started with nature of legal
system. After this, potential impact of law on business was been covered. Then comes different
types of organisation of business. At last, some legal recommendation were provided for
resolving areas of dispute in business.
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REFERENCES
Books and Journals
Asche, F., Oglend, A. and Osmundsen, P., 2015. Modeling UK natural gas prices when gas
prices periodically decouple from the oil price.
Daniel, J., Cano, E. V. and Cervera, M. G., 2015. The future of MOOCs: Adaptive learning or
business model?. International Journal of Educational Technology in Higher
Education. 12(1). pp.64-73.
Do, H., Cowling, M. and Blackburn, R., 2015. Barriers to exporting: new insights into UK
SMEs.
Forkert, K. and Lopes, A., 2015. Unwaged posts in UK Universities: Controversies and
campaigns. tripleC: Communication, Capitalism & Critique. Open Access Journal for a
Global Sustainable Information Society. 13(2). pp.533-553.
Galasintu, S., Supanit, S. and Chaiittivej, C., 2018. The issue of direct sales and direct marketing
law and enforcement in Thailand: A comparative study of the relevant UK and Malaysia
laws. Kasetsart Journal of Social Sciences. 39(2). pp.328-333.
Guo, W., Krever, R. and Teoh, J., 2016. Seconded UK Employees as a Permanent Establishment
in China.
Jaycox, L. H., Langley, A. K. and Hoover, S. A., 2018. Cognitive behavioral intervention for
trauma in schools (CBITS). RAND Corporation.
Lynch, P., Whitaker, R. and Cygan, A., 2019. Brexit and the UK Parliament: Challenges and
Opportunities. In Brexit and Democracy (pp. 51-79). Palgrave Macmillan, Cham.
Manji, A. and Cullen, D., 2016. Making UK aid work: why scrutiny is key–and how to achieve
it. British Politics and Policy at LSE.
McCormack, G. and Anderson, H., 2017. Brexit and its implication for restructuring and
corporate insolvency in the UK. Journal of Business Law. 7. pp.533-556.
Pozen, R. C., Nallareddy, S. and Rajgopal, S., 2017. Impact of Reporting Frequency on UK
Public Companies. CFA Institute Research Foundation.
Reiners, T. and Wood, L. C., 2015. Gami cation in Education and Business. Springer
International Publishing.
von Benda Beckmann, F. and von Benda Beckmann, K. eds., 2016. Spatializing law: an
anthropological geography of law in society. Routledge.
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Online
Sole proprietorship. 2019. [Online]. Available through.
<http://www.businessstudynotes.com/others/introduction-to-business/advantages-and-
disadvantages-sole-proprietorship/>.
Solomon vs solomon company case. 2017. [Online]. Available through :
<https://samples.edusson.com/solomon-v-a-solomon-co-1897-ac-22-case-analysis/>.
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