Business Law Report: UK Legal System, Organizations, and Disputes

This report provides a comprehensive overview of UK business law, encompassing various key aspects. It begins by exploring the sources of law in the UK, including legislation, common law, European Union law, statutes, and case laws, and then delves into the role of the government in law-making....Read More

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Sources of law in UK..............................................................................................................1
P2 Role of government in law making........................................................................................3
TASK 2............................................................................................................................................4
P3 Impact of contract, company and employment law on business............................................4
TASK 3............................................................................................................................................6
P4 Types of business organisations formed legally.....................................................................6
P5 Management and funding of business organisations..............................................................7
TASK 4............................................................................................................................................8
P6 Legal solutions for resolving business disputes......................................................................8
CONCLUSION................................................................................................................................8
.........................................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Legal system is the process that defines proper method of implementing various laws to
govern different sectors in the country. Legal system is required in country so that social and
business environment is maintained with peace and problems can be resolved in smooth manner.
It is a combination of science and art as various rules are regulations are defined in this together
with this some modifications are required based on different situations. Law is derived from
different sources and from previous cases results. Legal system defines a procedure that needs to
be followed and breach of this attracts penalties. Business in the country is most important part
that contribute towards overall growth of an economy. By considering importance of business it
is very much essential to have a law that regulates business activities (Bently and Sherman,
2014). Business law in UK is introduced to provide guidance for conducting business operations
in smooth manner.
In this project report different sources of law in UK and role of government in law
making is mentioned. Impact of company, employment and contract law on business and
formation of different type of business organisation. Together with this funding of business
organisations and recommendations of various legal solutions is given to resolve various
disputes.
TASK 1
P1 Sources of law in UK
Sources of Law are the constitutions of the laws which provides authority for the
decisions in any country. There are wide range of sources described by the UK Constitution
which are mandatory to be followed in the country. Parliament is the supreme authority which
formulate laws for the United Kingdom. The laws which are formulated and enforced by the
Parliament can not be revoked by any courts in the nation. No rights are given to any individual
or authority to formulate the laws for the country (Besley, 2015). For the smooth working of any
nation, various systems are formulated ans well as implemented to pass various laws by the
Parliament. Various sources of laws followed by the UK nation are Legislation, Common Law,
European Union Law, Statutes and Case Laws. The description is as follows:
Legislation: These are the laws described by the legislature of the nation. The important
pieces of legislation are the Acts of Parliament. The UK Parliament enforces the principal
1

legislatures which are based on the London. The UK Parliament is the only authority which has
rights to pass laws in all the UK countries. There are two houses in the UK Parliament, one is the
House of Commons and another is the House of Lords. Both the houses formulates acts as well
as passes laws through out the country.
Common Law: Common Law is the another branch of the law. The two European
Countries England and Wales holds the legal system based on the common law. Decisions made
by judgements of the higher courts against the lower courts in various cases becomes the
common laws. Thus, decisions of various cases are also considered as the important sources of
laws which UK system obtains (Sources of Law, 2015).
European Union Law: European Union Laws consists primary law, secondary law as
well as supplementary laws which are designed and enforced after the precedence of the UK law
as all these laws are formulated for the member states for applicability in the nation. It is
compulsory for all member states to follow such laws designed by the European Unions.
Statutes: These are formulated by the federal, state and local legislatures which declares,
prescribes and commands various specific laws are said as statutes. Statutes are the rules or laws
enacted by the legislative authority in written manner. The Act of parliament is sanctioned by
both the houses which includes royal consent becomes statutes. The legislative body approves
various statement of laws in systematic and codified manner which reaches in the statutes books.
Case Laws: There are various cases which occurs many times at different time period.
Such cases can be made as the standard laws which can be used as the guidelines for taking
effective decision at the time they occur. The standard laws can be named as the Case laws.
Thus, such standard laws or case laws can be considered as the sources of laws in the nation
(Craig and Campbell, 2012).
2

Illustration 1: Sources of Law, 2015
(Source: Sources of Law, 2015)
P2 Role of government in law making
Government in the country is backbone that helps in establishing legal system and takes
all possible actions so that breach of laws can be minimised in all the sectors. Laws in laws are
formed by parliament approval but for making that laws in the country and identifying
requirement of different laws is identified by government. Government in the nation works in all
the sector that consist all the economy of the country. Formation of law is easy when idea of
forming that law is very well defined and evaluated on the basis of advantages and
disadvantages. Government of UK plays important role in formation of laws as idea of designing
a law is served to parliament by government authority (Crane and Matten, 2016). In general
government has to deal with various circumstances and various situations for decision making
arises in form of government authority. While providing an idea for formation of law
government collects various information from statical data and also from real world situations.
3

Before keeping a proposal for requirement of any law in front of parliament houses all
the critical evaluation is done on the part of government. As government works by considering
favour of all nation and no single person is privileged that helps in designing a fair legal system
in the country. Representation of an idea for formation of law is made by government in form of
a draft. This draft gives through different stages before presenting to both the houses of
parliament. As draft includes information necessary by parliament is collected through surveys
and is verified by government (Folsom and et. al., 2012). Both the houses of parliament consider
it important and favourable for the country and after receiving royal consent as well then that
draft is turned as law for UK. A draft can become a law only after receiving royal consent and
without that is can not be termed as law. This process takes time and mean while when any
information required by parliament in decision making then it will be served by government in
specified time period.
In recent times when BREXIT is introduced that leads to shatter economic conditions of
all the related country. In this situation there is immediate need to take some legal action by
government so that effect of BREXIT on businesses can be minimised. In this government plays
important by designing policies and some laws that helps in reducing effect of this on economic
condition of the country.
In “Addie v Dumbreck [1929]” case involves an issue in which defendant owned view
park colliery which was situated in a field adjacent to a road. There was fence around the field
although there were large gaps in the fence (Addie v Dumbreck, 1929). This gap is used as
shortcut for railway station. After making several attempts defendant was not able to stop
viewers in moving through the land. A child come on the land and was killed when he climbed
onto a piece of haulage apparatus. In this case it was held by House of Lords that no duty of care
was owned to trespassers to ensure that they were safe when coming onto the land. The only duty
was not to harm anyone willingly.
TASK 2
P3 Impact of contract, company and employment law on business
When business activity is performed by owners and managers then together with business
law there are several other laws that needs to be complied while conducting business activities.
Different laws have their impact on business activity in a particular manner and all the laws
4

needs to be complied with to operate effectively. Impact of different laws on business activity are
as follows-
Company law: Laws that are defined to provide guidance to multi-pal business
organisations operating as company is specified under company law. This law specifies features
for business operating as company. As per company law company possess separate legal entity
distinct from its owners. This helps company to rise funds on its own name and any legal suit can
be file on the name of company (Frank and Bix, 2017). Businesses registered as company which
have management and ownership in different hands. Laws in formation of company,
appointment of directors, auditors and issue of shares and rising of funds for business is
governed as per company law. For Example- Auditor who is individual is appointed for one term
of five consecutive years is appointed as per company law.
Employment law: This law is implemented in the business organisations as human
resource to perform multi-pal activities is appointed. This law helps in keeping a healthy and
smooth relationship between management and employees. Businesses are guided as per
employment law to pay minimum wages to employees and fixed labour hours in a week is also
defined in this act. Each business organisation to avoid any difficulties needs to follow this law.
For Example- No discrimination in pay scale of employees on same profile is made as per this
law and business entities needs to follow this rule.
Contract Law: Businesses are established with the motive to conduct activity that will
help in generating revenues and profit motive will be achieved in long run. Business
environment is highly competitive and there is high chances of frauds. Whenever any operation
is conducted in business organisation there is no certainty in the market as it keeps on fluctuating
(Hawkins, 2012). To secure a business transaction a contract is undertaken, these are governed as
per contract law. Contract can be entered between two business organisations or between
consumers and businesses. For Example- A contract is made to purchase some quantity of goods
at certain price as maintained in the contract. When this is signed by both the parties it becomes
legal obligation.
5

TASK 3
P4 Types of business organisations formed legally
Business organisation is established in various forms that are available to them and most
appropriate is adopted from them. Formation of a particular type of business is selected at the
time of incorporation of business and even a running business can change its form by going
thorough some legal formalities. Various forms of business available in UK are as follows-
Sole Proprietorship: This is simplest form in which a business can be established
(Hayden and Bodie, 2012). As the name indicates this type of formation requires a single person
to establish business. The person in sole proprietorship acts as owner and manager of the
business. Their is no difference between owner and business. Formation of this business form is
simple with minimum legal compliances. Only a license to conduct business if required is
obtained and after that business activities started to conduct. This form of business is highly
preferred by small entrepreneurs. Selecting this form sometimes leads to financial crises as
resources are contributed by individual only.
Partnership: When two or more individuals come together to conduct a business
operation then this leads to creation of partnership form of business. Formation of business as
partnership is recommended as availability of resources in business increases. When business is
conducted as partnership then operations are conducted with more efficiency. Formation of this
business form requires to follow partnership act of the country. Together with this to make it
legal association a partnership deed will be signed by all the partners.
Corporations: A corporation is a business organisation that has a separate legal
personality from its owners. Business incorporated as corporation have minimum involvement of
owners of business in conducting business operations. This form of business is selected when
operations is conducted at very large base. Selection of this form is critically analyse as it comes
with the most regulations and a less favourable tax structure. This is preferred because it is the
only entity that can issue unlimited amount of stocks. Formation of this business form requires to
follow all the legal regulations imposed as per corporation law (Picciotto and Mayne, eds.,
2016).
Limited Liability Company: It is a hybrid form of business that have characteristics of
both a corporation and a partnership. A LLC is not incorporated and that is why it is not
considered as corporation. This form provides benefit of separate legal entity that shows owners
6

liability is different from business. LLCs enjoys flexibility in the way they are taxed. LLC with
one owner taxed as proprietorship and LLC as more then one owner is automatically taxed as
partnership. Formation of this required legal method described in the companies act.
P5 Management and funding of business organisations
Availability of different resources for funding in a business depends on form in which
business is established. Management and funding of business organisations are as follows-
Sole proprietorship: When management and funding of sole proprietorship is
considered the it is seen that management structure of business is quite simple as sole is only
person who is managing various business operations. Availability of funds with sole
proprietorship business is quite a difficult task as owner is only contributor of resources in
business. Availability of loan for business is not high and financial crises is faced by sole trader
in business (Rutledge, 2014).
Partnership: Business which is established as partnership is managed by partners. It is
not necessary that all the partners must be actively involved in business activity a partner who is
not involved in business activity will be considered as sleeping partner. Availability of funds for
partnership business is more the sole trader as contribution of funds will be made by different
partners. Together with this a sound image of one partner in business will help to take loan in
business. Financial institutions also preferred giving loan to business managed by partners as it
will give more certainty of refund then sole proprietorship business.
Corporations: Management of business operations is done with professional managers
who are appointed in business to manage various operations. As corporations can issue any
number of stocks for rising funds then it will be an opportunity to rise funds as per requirement
of business.
Limited Liability Company: Management of operations in LLC is different form
ownership and performed by directors that are appointed by owners in general meetings.
Company is privileged in rising funds required for conducting business operations through issue
of stocks to general public. Together with this funds can be raised through bank loan and through
issue of loans and other securities (Vagts and et. al., 2015).
7

TASK 4
P6 Legal solutions for resolving business disputes
When business is conducted in the environment which is competitive and full of legal
rules and regulations that needs to be complied with. While operating various activities in
business leads to involvement of different individuals and organisations. When involvement in
business of outsiders increases then it leads to disputes at internal and external level.
Employees working in an organisation demands that all the laws that are provided to
companies as per labour law needs to be complied effectively. Managing human resource in
business through laws and regulation specified in legal system of UK helps in avoiding any
internal conflict between management and workforce. For Example- Employee is removed from
job without serving any notice period and against legal rules. This will leads to dispute among
employees and organisation for rights of employees. These issues are resolved by union that is
established by all the workforce working in the company. When any dispute arises then union
acts as mediator between company an organisation. Both the parties are given opportunity to
prove their point and then solution that is best of all will be provided (Svantesson, 2016).
When dispute arises in relation to non payment of amount by company to its creditors
then also a solution needs to be provided for same. When business is not able to meet its debt and
this is going for long term then creditors can take help of legal system to resolve this issue. A
case will be filled against the company and court will take a decision for business and will
describe the manner in which payments will be made to liable creditors in prescribed time
period.
When any dispute arises between government and business entity then that will be
resolved through dispute resolution authority. Authority comprises of bench of judges who are
experienced and work for benefit of both the parties involved in the issue. An application for
solving an issue will be filled with them and a decision suitable for both the parties will be taken
and that will be binding on them.
CONCLUSION
From the above project report it has been concluded that laws in a country is very
important as they help in operating in business in most effective manner. Their are various
sources of law and all are consider to make a effective legal system in the country. Government
8

plays an important role in formation of required laws that make legal system highly effective.
Their are various forms of business organisations that be be selected for operating business
activities and among them most suitable on the basis of management and availability of funds
will be selected. Disputes in business keeps on recurring and needs to be corrected to get most
effective results.
9

REFERENCES
Books and Journals
Bently, L. and Sherman, B., 2014. Intellectual property law. Oxford University Press, USA.
Besley, T., 2015. Law, regulation, and the business climate: The nature and influence of the
World Bank Doing Business project. Journal of Economic Perspectives. 29(3). pp.99-
120.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Folsom, R. H. And et. al., 2012. International business transactions: a problem-oriented
coursebook. ThomsonReuters.
Frank, J. and Bix, B. H., 2017. Law and the modern mind. Routledge.
Hawkins, J., 2012. Credit on Wheels: The Law and Business of Auto-Title Lending. Wash. &
Lee L. Rev. 69. p.535.
Hayden, G. M. and Bodie, M. T., 2012. The Bizarre Law and Economics of Business Roundtable
v. SEC. J. Corp. L.. 38. p.101.
Picciotto, S. and Mayne, R. eds., 2016. Regulating international business: beyond liberalization.
Springer.
Rutledge, T. E., 2014. A Corporation Has No Soul-The Business Entity Law Response to
Challenges to the PPACA Contraceptive Mandate. Wm. & Mary Bus. L. Rev.. 5. p.1.
Svantesson, D. J. B., 2016. Private international law and the internet. Wolters Kluwer Law &
Business.
Vagts, D. F. and et. al., 2015. Transnational business problems. West Academic.
Online
Addie v Dumbreck. 1929. [Online]. Available through:
<http://www.e-lawresources.co.uk/cases/Addie-v-Dumbreck.php>
Sources of Law. 2015. [Online]. Available through:
<http://consumer.newbeginningsresources.co.uk/legal/the-english-legal-system/sources-
of-english-law/>
10