Business Law Report: Sources, Government, and Impact

This report delves into the multifaceted realm of UK business law, commencing with an introduction to the subject and a table of contents outlining the key areas of exploration. It begins by identifying the diverse sources of law in the UK, providing insights into customs, common law, European law, and acts of parliament. The report then analyzes the government's role in law-making, differentiating between statutory and common law applications within the justice system. It subsequently examines the impact of company, employment, and contract law on business operations, highlighting the importance of legal compliance. The report further explores the legal formation, management, and funding of different types of business organizations. Finally, it offers recommendations for resolving various legal disputes, thus providing a comprehensive overview of business law principles and their practical implications for businesses operating in the UK.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................3
ACTIVITY 1....................................................................................................................................3
P1 Different sources of Law in UK.............................................................................................3
P2 Role of government in law making and evaluating the role of statutory and common law
applied in the court justice..........................................................................................................4
P3 Company, employment and contract law impact on business...............................................6
P4 Different types of organisation are legally formed................................................................7
P5 Business organisation are managed and funded....................................................................8
P6 Recommending legal solutions for resolving range of disputes. ........................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business law is related to the trade law and commerce law which offens govern the
business activities. Companies can be public and private and law are related to civil and criminal
law. Business law are made for the smooth working in respect of society and employees working
in the organisation. It regulated corporate matters such as contracts hiring employees and
manufacture and supply of goods and services. It helps company to work within the legal rules
and regulation and also maintain ethical behaviour in the society. Thus, English law is the legal
system created by state and bound within the jurisdiction and enforces by the authority to act
within the state.
Report will include The different sources of law in UK. It also elaborates the role of
government in law making. Illustrating the company, employments and contact law has impact
on business. It also helps in identifying the difference between legislation, regulations and
standards having potential impact on business. It also examines different types of business
organisation which are legally formed. Further it examined how it can be managed and funded.
Lastly appropriate legal solution for resolving a range of disputes are identified.
ACTIVITY 1
P1 Different sources of Law in UK
In English Legal system various sources of law are implemented for employees and
company to behave ethically in the society.
 Customs: This law runs from the ancient times. As in this law the rights of the kings and
their implementation also designed according to the matters (Business Law and
Regulation, 2019). In this source, it depends upon the rights of public, their behaviour in
the society and companies and also the habits which they are addicted to it are engaged.
As principles of law are derived from the valid changes which helps in making the
effective customs of law.
 Common Law: Under this law the judgement is made by the judges sitting in court and
give decision according to the previous case study. They can refer the judgement of the
previous cases and apply the decision according (Bouch and et.al., 2018). If the same
case which is similar to the recent case is referred in the court previously they have the
power to judge according to the previous case law. Legal rules and regulations are bench

with the decision of Queens and are mentioned in the laws such decision are followed by
the courts. The procedure of this law is that decision made by superior court are bound to
be followed by the subordinate court. The rules and laws are mostly preferred if they
written in court decision paper.
 European law: European community has the source of law since 1973. This law operates
and examines within the member of the European community and European union. It
deals with all types of matter related to social, economic and political factors working in
the organisation (Westermann-Behaylo, 2018). Under this matter if any disputes are
arises in any such matters than judgements is made under this law. Judgement are made
under the court of European and decision are based according to the crime committed. It's
the duty of eh lawyers and judge to present the judgement within the rules and every
party is liable to commit the fair views.
 Act of parliament: Parliament has the right to create laws or amend the existing laws in
the rules of law. This helps in making the effective decision in the judgement procedure.
Acts of parliament are also known as statutory law which regulated in states (Lowe and
et.al., 2016). This provides support to the public to believes in law and behaves well in
society. As due to continuous changes in laws and by having serious matter's comes up.
Laws are amending from time to bring new development in society.
P2 Role of government in law making and evaluating the role of statutory and common law
applied in the court justice.
Role of government in making law:
A law is made through the parliament procedure but its start form being a draft legislation
formed by the public authorities of the electing parties who are served with various issues and
problems faced by the public. The parties and authorities select a matters over which a law is
need to be frame and with this draft legislation is framed with help of government authorities.
This is presented to cabinet ministers for approval of being presented in the parliament. Without
this permission a proposal can not proceed (Coulter and Hancké, 2016). With getting an assent it
becomes a bill and presented before both the houses of parliament get a consent. The bill is
present to either of the one house that is houses of lords or house of common. The bill is

introduced through first reading where title of bill is read out and is defined that what is bill is
about and matter which is going to be discussed in future stages.
From here bill goes to second reading where principles of the bill is read out and debate
is over it and then voting is done over acceptance or rejection of the bill. With approval bill goes
to committee stage where the house committee carry on detailed discussion and make changes in
the bill. From here bill goes to the report stage back to the house members where changes are
considered and forward the same or third reading (Hedley, 2017). At this stage a modified bill is
discussed and voted upon continuation of the bill to the next house. From here bill goes to the
next house where is follows same stages. Any changes if made by this house, it is referred back
to the first house for its consideration over it with approval form both the houses a bill is
presented to the Monarch for final approval. After getting consent from her Highness bill
converts to a law.
Application of statutory and common law:
Statutory law: the statues laws are made in UK through the parliamentary procedure and
have a unanimous applicability over the whole nation. The courts are required to interpret the
laws with the existing aids such as long titles, hansarad, dictionaries and other (Kraakman,
2017). No courts have a right to raise a dispute over the provision of a la as they are absolute in
nature and do not entertain discretionary power of the judges over its interpretation and
application. This can be stated with the example of the case of Lee v Lee air farming 1960, the
rules of the companies act, 1862 present at that time was used to determine the principle of
separate legal personality of the company.
Common law: are applied in the justice courts as getting a binding effect over the
decision of a court through doctrine of judicial precedent. The decision of higher court must be
referred by the lower court when deicing over the case of similar subject matter. Moreover, here
the judges can rule out to not to refer a previous ruling when it is of the view that the earlier
ruling lack interpretation of the law or consideration of evidence related to case (Bayern and
et.al., 2017). The court must give evidence of the same while pronouncing decision of present
case. Its applicable can be seen in the case of Indusstry v Bottrill 1999 the ruling of case Lee v
Lee air farming was also applied to defies that a sole trade can be employed by the company.
M1:

Various legal rules which are evaluated from the recent reforms and development are
firstly in terms of family court. Previously the judgement are made in the same court but now
due to new court establishment the judgement are differentiated. Now the decision related to
family matters are on speedy trail and the judgements are fair to initiated. This is the biggest
development in respect to court. Another one is in respect of ADR(Alternative Dispute
Resolution). Due to facing long judgement decision, people prefer to have the out of court
settlement. This changes bring the speedy decision of the disputes matters and they get the
judgement on time. Previously people have to wait long to get dates in the court but in recent
times the various new changes are amended for ADR and they provide fair decision to the
parties.
P3 Company, employment and contract law impact on business.
Company Law: Law relating to various rules and regulation affects the working of the
business. The major impact on business that come from company law in business is related to
taxation rates. As government impose different tax rates which is based on money that business
earned and they have to pay the appropriate ratio to the government (Yeoh, 2016). Tax is the
biggest issue as very company has different norms and services to deal with. Government impose
taxes according to the services which they are offering. Changes in norms results in impact of
business activities.
Employment Law: Employment law comes up when there is an employer and employee
relationship in the organisation. To engage in business work many rules and regulation are
imposed on the employee to behave ethically in the company or maintain loyalty. If employees
violates the rules they are charged under the offence and committed to punish under the law
(Lee, 2017). Due to strict rules of company, employees retention period are less which result in
less productivity in the company. This result in causing impact on business productivity and
working.
Contract Law: It is usually a document which may be oral or written agreement. It
comes up when there is an exchange of goods, services, money and property with some other
person. Sometimes contract law affects business if the contract made is illegal in perspective of
business entities (Tilba, 2017). Fraud contact made by one of the parties resulting in causing
huge losses or reputation loss to another party and also affect the financial matters of the

company. Usually contract are made between the parties to extend their business which
sometimes result in committing fraud to one of the party.
As the case of Pimlico Plumber V Smith Case, In this case Mr. Smith is working as
plumber in the Pimlico company from August 2005. In January 2011, Mr. Smith suffer with
serious heart attach which affect his life and he is half paralyse. After having rest for few months
he demanded to reduce the work timing so that he can continue working with the company. But
pimlico plumber refuses to do that and terminate him from job on grounds of not performing the
duty (Tombs, 2016). Mr. Smith file a case against not terminating him from the services on such
grounds. As per court decision the rules of lords not allowed committing such things.
M2
Legislation as per employment regulation, 1999 stated that it mandatory for all the
companies to work under the rules which are mandatory and stated by the parliament. While the
regularities such Employment Right Act, 1986 helps the companies to mange the rights (Willett
and Koutsias, 2016). According to the need of the employees and working issue and standards
are the set norms which company have top follow if they are facing any issue in fulfilling.
Theses have critical impact on business as it mandatory for business to follow the employment
rules but it if not fixed to maintain it for further use.
D1
The critical evaluation regarding the legal system of law is that in case of Pimlico
Plumber V Smith, it's the duty of Plimco to follow the rules of the company and have no right to
terminate Mr, Smith. But the results saris that Mr. Smith file case against the plimico which
affects the reputation of the company. They have to spend lot of time and money in finalising the
case. Under the employment Rights Act, 1986 it is the duty of the company to take care of their
employees and fulfil their needs so tat they can work freely to achieve target.
P4 Different types of organisation are legally formed
There are various types of legal organisation which are formed legally such as:
 Sole proprietorship: As this type of organisation are easy to formulate as it has only one
sole trader or partner to establish the business. It is the cost effective manner as it
contains no risk associates with the company (Four Forms of Business Organisation,

2019). To engaged in the sole proprietor business person need not have to mention their
name in the newspaper regarding the establishment of the business. They can start the
business by taking permission to incorporate the working of business. There is no
security for the creditors as business cost is high due to single owners and chances of risk
are more in this business. The main advantage is that profit earned have no sharing basis.
As owners single holder enjoy the profits earned similarly for losses also they only have
to bear the looses. They can't claim anyone to suffer the loss as he is the only owner of
the business who runs in effective way.
 Partnership: It consists of two or more person to form a company in terms of
partnership. Every partners in the company have to sign the partnership deed to enter into
an agreement in writing. In agreement they mention the profit and loss sharing basis in
the company (Picciotto and Mayne, 2016). If the company earns profit then they have to
be distributed equally similarly as with losses also every partner have to bear the equal
losses in the company. If the death of any partner arises than partnership deed is also
dismissed and company is closed. The main disadvantage is that if profit earned by the
single partner through their hard work still they have to distributed the profit with all
partner. As they are bound to follow the partnership deed.
 Limited Liability Company: The company limited by share have the liability to manges
the company internal matters under the companies Act, 2006. In this company can issue
their own memorandum and article of association (Jones and Sufrin, 2016). The profits
flow from company to members and then shareholders. It can be limited by shares and
limited by guarantee. They provide guarantee to the members of the company to protect
their interest. The liability of company debts are limited to the value of each shareholders
shares.
P5 Business organisation are managed and funded
Sole proprietor is not a separate legal entity they can be run by a single person or a
couple person to continue their business. Sole proprietor can enter the name of their own choice
and also use the fiction name to enter into the market. So the single person manges the complete
business entity and run the business according to their own terms and condition. They are not
liable to share the profits and losses with any person. They personally liable to overcome from

the issues raised in the working (Ahammad and et.al., 2015). Thus sole proprietor are easy to
start and manages its legal, financial and business risk. In terms of funding sole proprietor are
harder to get loans and no chances to get work from big clients. As they have no stability in the
business. To raise funds they can take help from investors to invest money in the company in
exchange of proving security to the investors.
Partnership are managed by the partner working in the organisation. They manage the
profits earned and losses incurred while dealing in crucial matters in the company. They made
legal agreement to manage their funds and other important matters which affects the company.
The biggest problems arises when death of one partner is initiated, this results in complete
closure of partnership (Partnership Grant, 2019). If the company having more than one partner
the ability to raise funds increased. All the partner equally manage the company internal and
external matters. The company can easy raise funds from the investors by raising shares in the
market or by taking loan for smooth working. Banks easily provide loans to the partnership
company.
In Limited liability company, the owners of company mange the risk and profits of the
company. The investors and members are not liable for company debts or liabilities. As LLC is
the separate legal entity responsible to manage their own income, gains and debts of the
company (Davies, 2016). They manage their funds by issuing share in the market and the
liability for company debts is limited to the fixed amount which can be called as the guarantee of
the company.
M3
The main advantages of Sole proprietorship is that all profits are with the owners of the
company and they have the flexibility to run the business as per their own terms and condition.
Its cons is that owner is 100% liable to debts occurs in the business and to transfer the ownership
of the proprietor is difficult in this case. In case of Partnership its advantages is its saves cost and
time to create a partnership firm and each partner brings the profit in the company (Rodger,
2017). Similarly, its disadvantages is that death of one partner results in termination of
partnership deed and all partner are personally liable for debts occurred in the company. The
advantages of LLC is that profits of the company are shared by the owners with tax benefits

while its disadvantages are that agreements which are made are complex in nature and they are
restricted by state laws.
D2
It is criticised that Sole proprietor is easy to establish but the partnership depends upon the
loyalty of the partner and in LLC liability of members are limited by shares and guarantee. To
establish sole proprietor very less cost involved to run the company and profits are enjoyed by
the single holder (Bouch and et.al., 2018). In case of partnership profits are distributed equally
but losses are managed easily. In LLC there is a high cost in respect of legal rules and laws.
P6 Recommending legal solutions for resolving range of disputes.
CASE 1: In the case of Foley V Classique Coaches, Foley states that they supply petrol to the
Coaches as price written in the agreement and will not change according to the time. But due to
changes in time the price of petrol are increased and Foley is suffering from huge losses. They
increase the price of petrol which coaches have to pay. Coaches disagree to pay the increased
price. They decide to appoint arbitrator to solve the disputes.
Legal Solution: Arbitrator is the person which are appointed by the parties mutually and they
are bound to follow the decision. The appointment of arbitrator is required when both the parties
not agree on single decision and they provide the fair decision. The duty of arbitrator is to listen
both the parties, analyse the facts and then give decision. To reach before the arbitrator both the
parties have to sign some agreement with the arbitrator and then cannot neglect the decision
(Effective Dispute Solution Limited, 2018). This is the specially to choose arbitrator that the
decision is final for both the parties and they have to follow it without any failure.
In this case arbitrator listen both the party's conversation and made judgement according
to the favour of both the parties. This case reflects the dispute between the parties regarding
increases of prices (Westermann-Behaylo, 2018). As Foley is suffering losses which he in not
agree with. Arbitrator decides that there is lack of clarity in prices which they have to be resolved
in the agreement. Thus, the decision is final between both the parties and are written as the final
decision and both the parties have to agree it.
CASE 2: As the case of Salomon V A Solomon & Co. Ltd, Salomon is engaged in the business
of leather shoe maker. Due to the force of 5 children to be the partner in the company, he

converts his business into the Solomon & co. Ltd. They purchase their business by paying
£39,000 and their deal was done in terms of £10,000 debentures and £20,000 in fully paid up
share with £1 share each and remaining balance in cash. Within a year the company become
insolvent and they started the liquidation process. The assets of the company are not sufficient to
pay the debts. Mr. Salomon is liable to clear all the debts.
Legal Solution: As per the Companies Act, 2006 all the debts which are incurred by the owners
of the company are liable to pay the debts. As company is the new legal entity and are liable to
follow the rules made by the parliament. The decision of court of lords are that it's the duty of the
companies to settle their debts and release the amount of shareholder and investors of company.
Directors of the company are not liable to take any action until the corporate veil is enacted.
M4,D3
The comparison of ADR and companies law is that both works under the legal system
and both the legal right to take decision against the parties. Arbitration is done in respect to
conducting the terms of fulfilment of decision whereas companies act are fulfilled to maintain
the owners interests in the matters of the company. To evaluate both the source they had
different perspective in solving the matters (Lowe and et.al., 2016). ADR is the time consuming
method and mostly the first choice of the public while to solve the matters of company act they
have to wait till the judges evaluate the facts. ADR saves cost expense and gives speedy decision
to the matters while court takes more time to give valid judgement which sometimes not in
favour of parties.
CONCLUSION
The above report can be completed with giving a conclusion that the various sources of English
legal system includes the act of parliament, EU directive, case laws and others. The legislation
are made through the parliamentary process with getting approval from both houses of
parliament and form her highness. The laws are applied with no modification and in absolute
manner rather common laws are applied with a discretionary power of the judge. The
employment, contract and company laws have different applicability over the business and binds
an organization to follow all the provision defined in respective act in its conduct and operation.
In case they are not adhered with legal consequences are imposed on businesses. Moreover, it
can be articulated that the legislation and regulations a have a compulsory requirement of

adherence while the standard possess a voluntary power over its application the various types of
bushiness entities in UK have been identifies as sole trader, partnership firm and company. All of
them have different sources of funding and are managed differently. For the last section of the
report it can be concluded that two of distinguish business problems have been taken and for
them legal solution have been provided with taking reference of statute and common law.
(Lee v Lee's Air Farming Ltd, 2018)(SECRETARY OF STATE FOR TRADE AND INDUSTRY V
PETER BOTTRILL, 2018)(How are laws made?, 2018)
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