Business Law: Sources, Government Role & Impact on Company Operations

This assignment delves into the intricacies of business law, exploring its various sources, including legislation and judicial precedents. It examines the pivotal role of the government in the law-making process, detailing how statutory and common law are applied in justice courts. Furthermore, it elucidates the potential impact of company, employment, and contract law on business operations, providing concrete examples. The assignment also evaluates the effectiveness of the legal system in light of recent reforms and developments, analyzing the differentiation between legislation, regulations, and standards. Finally, it compares and contrasts different types of business organizations, their legal formation, management, and funding, offering recommendations for legal solutions and analyzing the advantages and disadvantages of each type. The content is available on Desklib, a platform offering study tools and resources for students.

Business law

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................4
P1- Explain different sources of law...........................................................................................4
P2- Explain the role of government in law making and how statutory and common law is
applied in the justice courts. .......................................................................................................6
P3 – With the help of examples, illustrate how company, employment and contract law has
put potential impact on business.................................................................................................6
M1- Evaluate the effectiveness of the legal system in terms of recent reforms and
developments...............................................................................................................................8
M2 – Analyse the potential impact on business through differentiation between legislation,
regulations and standards. ..........................................................................................................8
TASK 2(REPORT) .........................................................................................................................9
P4 – Evaluate how different types of business organisation are legally formed. ......................9
P5 – Explain how businesses organisation are managed and funded.......................................10
P6 / M4 – Compare and contrast different sources of legal advice and support for dispute
resolution to make appropriate recommendation to legal solutions..........................................10
M3 – Analyses the advantages and disadvantages of the formation of different types of
business organisation................................................................................................................12
CONCLUSION ............................................................................................................................13
REFERENCES..............................................................................................................................13

INTRODUCTION
Business law is a set of rules and regulations assembled in the form of principles or
provisions that regulates the conducts of a business. It covers various concepts on business like
duties of organisation towards its shareholders in legal context wherein, directors role and their
accountability for their actions and contracted related provisions. Business law draws a legal
framework which states how a business should be commenced and run. Business law is a wide
concept and its sources can be tracked in international law and domestic or local customs. The
United Kingdom business regulations governed by the Companies Act 2006, Insolvency Act
1986, Case laws, Corporate Governance Code and European Union Directives (Macgregor2019).
The company in business law is considered the main entity to run business. Each business person
required to know all the legal landscape because it is a highly diverse field having various sets of
laws which are made applicable depending on the structure and nature of the business. This
include contract law, intellectual property law, employment law and limited liability. These laws
provide framework which protect the interest of all faculties involved in business (Mitkidis
2019). Legislation on business law is designed to stop business from doing unlawful conducts
towards customers, employees, suppliers, competitors and government as well and to maintain
healthy relationship between employees and employers and to treat their employees and other
faculties fairly. This assignment will consist of two parts, part one will be structured in essay
formate which will cover different sources of law, role g government in law making process,
impact of different laws on business and evaluation on effectiveness of legal system in respect of
recent reforms and developments. In part two, evaluation will be made on different types of
business organisation and how they are formed and how they are funded will be discussed in the
form of report.

TASK 1
P1- Explain different sources of law
The United Kingdom is a democratic form of constitutional monarchy. In UK the head of
the state is not the president but monarch. Monarch are empowered by convention and they are
kept politically neutral. The legal system of UK is having two distinct legal jurisdiction, England
and Wales both these share similar legal system including legislation and case laws. The law
making process of UK derives from the the parliamentary system of Monarch, which consists of
two house , the House of Commons and The House of Lords. Commons are the representatives
of the people as they are directly elected by the people through general elections and the prime
minister is the member of commons (Morgan). The judiciary is complete independent body
which is kept separate from the parliament and looks all the judicial and court system and case
laws. The sources of UK laws can be classified into two main categories. The primary sources
and secondary sources.
Primary sources of law: sources of laws are the routs from where laws are originated and has
played major role in development of laws, the primary sources of UK law includes legislation
and judicial precedents. Making law is not an ordinary task, it requires wisdom, knowledge, and
pure intention and a vision. The people who make laws are the elected members of the
parliament and to make laws it is must follow the procedures established by constitutional law.
No private person or an organisation can make laws. The parliament is the supreme legal
authority in United Kingdom having political power of the land and are constitutionally
empowered to make laws in the public or national interest only. Parliament consists of two house
and each house has important role to play in law making process. The process of law making
begins from introducing an intention in the form of bill in either of the house by any member of
the house, such bill has to pas through several stages in order to determine its status whether to
become a law or send back for consideration. Where a bill is passed all the stages and received
the royal assent such bill becomes an Act of the land.
The other primary sources of it is case laws or the decisions of Superior courts which interprets
the law and deliver judgment on grounds of justice and good conscious. Supreme court is the
highest court of UK, it is the final appellate court and its rulings is as effective as any law passed
by legislation. Case laws are also known as judicial precedents which are kept in the form of
judicial records. These rulings are the decisions and orders of the apex court and plays very

significant role in development of legal system, this laws are highly interpreted by the courts.
These precedents are used for determining the issues of similar nature by the lower courts like,
magistrates court, divisional courts or district courts.
Secondary sources of law: Secondary sources of UK law includes, encyclopedias, treatise, law
journal, law books, amendments, law reviews, restatement of law. These are the works of highly
intellectuals and eminent personalities in the field of law and research like judges of Supreme
courts, professors of prestigious institutions who contributes their knowledge and wisdom in
development of law. These sources are equally important for development of laws or to explain
the meaning of contents in primary sources through critical interpretation. Secondary sources are
relevant to some extent because they are well-researched and empirically tested.
P2- Explain the role of government in law making and how statutory and common law is
applied in the justice courts.
The role of government in law making process is very important, government is the only political
authority which collectively decides the rules of the society. It follows a procedure established
by constitutional principles on how to make laws for the nation. The parliament is the supreme
legal authority in UK, all the government representatives are the elected members of the
parliament and all these members collectively decides the laws of the land for national and
public interest. Although, the United Kingdom does not have a written constitution, but the
principles and objectives its constitution can be seen in the laws passed by the parliament. The
parliament of UK consists of two house, the House of commons and the House of lords. Any
member of either of the house can proposed a bill in either of the house. The first stage beings
with the reading the name of the bill in the house. At second stage the principle objectives of the
bill is discussed and debate is made on the nature of the bill and amendments are suggested. In
subsequent stage the bill is sent to committee for considering the suggested amendments and
voting is conducted on such amendments. After this, the bill is forwarded to the other house
wherein, the same process is repeated if the commons are not satisfied with the bill they can sent
back the bill to the lords for reconsideration. At last, when the bill is approved by both the
houses, it is sent for royal assent, if assent is given then such bill becomes an Act passed by
parliament.

P3 – With the help of examples, illustrate how company, employment and contract law has
put potential impact on business.
Business is a highly vast concept which often complex to understand because includes various
elements and factors in association with business and its faculties. Business law broadly can
classified into two categories internal and external factors which covers all the elements present
in business. A business is a set of arrangements organised to generate profits by manufacturing
or producing products or substances and commercialising them for trade. To run a business
without any barriers or problems it is necessary lay business on legal foundation. Business law is
entirely different major square having different set of rules for its regulation. There are many
other law which governs the conduct of businesses like contract law, company law, partnership
law and many more, all this laws put heavy impact on the functionality of the business and their
activities.
Employment law: the statute made on employment that covers, especially the interest of
employee and their rights. It is often argued that, employment law is more favour to employees.
Employees are important for an organisation, it is important to safeguard their interest at work
place. Earlier in organisations, employees and workers were ill treated by their employees, they
were kept deprived of many rights and benefits to which they are entitle. Considering all this
issues and problems, the government intended to bring a law with the view to regulate business
activities and to eliminate all these arbitrary practices. According to this statute the employees
are given numerous rights and benefits to improve their living standards. Employment law
imposed statutory duties on the employer to make sure that its employers are given proper work
environment. It is the duty of an employer to ensure that no employee is discriminated at work
place and treat them fairly. Employment law provides many other rights and benefits to
employees who are working in business organisations like, leave allowances, maternity and
paternity leave allowances, compensation, reward and recognition, health and safety measures,
bonus, extra pay for extra work and many more which helps in improving the standard of living
and gives them a chance to live with dignity.
Contract law: This law pertains to binding a party to fulfil its legal obligations constituted under
a valid contract. Contract is an agreement made between two or more living persons, wherein
one party signifies an offer to other with the view to obtain the assent of other party to do
something upon consideration. A valid contract is enforceable at law, to make a valid contract it

is necessary that it must fulfil all the essentials of a valid contract that is, there must be a
proposal, an acceptance, lawful consideration and intention to form a lawful contract (Poole
Devenney and Shaw-Mellors 2021.). Parties are bind in a valid contract towards each other, if a
party does not fulfil the contractual obligations then such party has breached the terms of
contract and liable for such breach. In the same way, company also makes contract with other
entities to establish legal relation for the company, such contracts are enforceable at law and are
valid and parties to such contract are bound to follow the terms of the contract. Where a party
fails to fulfil contractual obligations shall be subject to penalties.
Company law: In UK the law which governs business corporations are falls under the
Companies Act 1986, it is the foremost corporate law which provides various legal framework
for the companies constituted within the territories of United Kingdom and their respective
director. It provides process for creating a company from its incorporation to its winding up and
the roles of directors of a company (Siliquini-Cinelli,and Hutchison 2019). It also mentions types
of companies which a person can form like, partnership firm, sole proprietorship, limited liability
company, limited company. The companies Act 1986, provides 1300 sections and 16 schedules
covering all the important tenets relating to company. Thus, a companies Act is a statutory rule
book for business formation.
M1- Evaluate the effectiveness of the legal system in terms of recent reforms and
developments.
Law commission is a statutory body which works independently over the matter assigned
to it, it is constituted for the temporary period which consist of several members who are experts
of law. Government from time to time forms law commission for evaluating the exiting law and
their impact and how effective they are in present context. The role of the commission is to
prepare a report on the given task. The commission of UK was constituted in the year of 1965.
The primary objectives of the commission is to study the matter given to them and find out the
relevant issues along with effective solutions by conducting research and study. This commission
has to follow certain methodology in order to prepare the report (Smith 2022). After completing
the report, commission then, send the report to the government for consideration. This report if
approved by the government then changes are made and if not approved then, sent back to the
commission for reconsidering and order to bring more effective recommendations.

M2 – Analyse the potential impact on business through differentiation between legislation,
regulations and standards.
The term legislation, regulation and standards are the related to same square of law. The
difference is huge. The legislation is the key body of law which makes law as per the procedure
established by constitutional values. The process of legislation begins from the parliament which
is the supreme legal authority of United Kingdom. The law passed by parliament are the primary
law which are enforced throughout the UK. The subsequent stage after passing legislation is its
implementation. The government set its agencies for effective implementation of the laws by
publish in official gazette. All the government agencies and officials are begin to implement the
laws as per the directives of the government. Standards are the directions made by the
government provided with the laws in the same manner as prescribed by the law.
TASK 2(REPORT)
P4 – Evaluate how different types of business organisation are legally formed.
There are several types of business organisation which are formed within the legal
context, it is important for a business that it must fulfil all the essential requirement of a business
formation. A business entity is formed in order to carry out commercial enterprise. Such an
organisation are constituted based on the system of law which governs business conducts. There
are mainly three types of business structure – Sole Proprietorship, Partnership, corporation,
limited liability company.
Sole Proprietorship: This business structure is the most common arrangement as majority of the
people with limited capital prefers to go with sole proprietorship because, in this very limited
capital source is needed and no paper work is required. It is one of the simplest and easiest form
of business structure. It is a single owned business in which the owner is fully entitled to enjoy
all the profits alone. In order to establish sole trade company the owner needs get it register with
HMRC for attaining legal status.
Partnership: In this business arrangement, two or more persons mutually agrees upon the
partnership agreement to carry out a business and equally shares profits and loss form
partnership. It is necessary to register partnership firm with Companies House in order to
attained the legal status. Each partners in partnership are equally liable towards all debts and
loses.

Limited liability Partnership: It is a separate legal entity having unlimited capacity. The
limited liability partnership enjoys all the rights as a natural person does. Limited liability
partnership is given right to enter into a contract and can purchase or hold the property in its
own name. It has the perpetual existence in the eyes of law. LLP must be register with the
companies house to obtain legal status.
Limited company: It is a company commenced by individuals in order to carry out a business.
In UK, a limited company is one which must be registered at companies House. Such companies
are operative within the Companies Act 2006. Limited company are of two types limited by
shares and limited by guarantee. These companies are owned by shareholders who have certain
rights. At time of registration limited company needs to disclose company's documents which is
k own as charter of the company (Haines2018).
P5 – Explain how businesses organisation are managed and funded.
For a business inception, it requires funds, investment and capital. It is an essential
requirement for a business to establish and to survive. Without funding no business cam be set
up. In UK, there are various types of funding options available for business for enhancing
business ir expanding business like, retained earnings, equity capital, debt capital are the routes
through which a company can raise capital for its business (Teague and Donaghey 2018). In case
of small business the findings can be raised by personal investment, in other words, owner can
raise funds using their own personal assets or savings. As there are several types of business
organisations which are very different from each other, in the same way the process of funding
also changes.
Sole Proprietorship
Sole proprietorship is not a company, therefore there is no scope of selling shares to
investors in order to raise fund. Rather, in such type of businesses the source of funding is relied
on the personal assets or savings , bank loans, loan from friend or family.
Partnership:
Partnership firms in UK are funded by five internal sources of funding, owners personal
investment, sale of fixed assets, debt collection or by retaining profits. In partnership each
partners bring their share of capital for carrying out business which determines their ownership
in partnership (Vandich2022).

Limited Company: This business arrangement is a hybrid form which is very complex in terms
of its inception and management. Limited companies comprised of many departments because of
their large scale business operation. Such companies requires huge sum of capital and funding in
order to keep business stable. These companies manage funds through issuing companies shares
to the general public.
P6 / M4 – Compare and contrast different sources of legal advice and support for dispute
resolution to make appropriate recommendation to legal solutions.
There are cases when companies are struck in legal issues, there are many instances
where companies faces legal disputes relating to contractual obligations, employer employee
disputes. Such disputes are determined in companies tribunals. Unlike courts there are other
modes by which disputes can be resolved (Wesanko 2021). The parties can resolve matter by
instituting a suit in tribunals or courts and a proper legal proceedings can be initiate against each
other. Court system is the best way to resolve the issues without getting bias. The determination
is based on procedure which includes proper court procedure, the court in such cases decides the
facts in issue from the contentious of parties, court also orders to bring all relevant documents
pertaining to case and apply its mind by examining the evidence exhibits before the court
(Williams, and Paterson 2021). The court after considering all the facts and circumstances of the
comes to a final conclusion and adjudicate the matter on merits. Following are the case scenario
mentioned below which requires legal advice for solving issues.
Case Scenario 1
Legal issue: is the demand put by workers is justifiable in eyes of law ?
Legal Solution: the issue is to seek claim from their employer and it can be adjuged amicably
by way of negotiation.
Justification: the mode of negation is the best informal method by which party outside court can
settle their issues. In this process an independent person is appointed mutually by both the parties
and such person listens to both the parties and decides issues (Aguda 2018).
Case Scenario 2
Legal issue: in this matter, Janet was told to pay additional charges for the services including
phone line charges. Is it justifiable ?
Legal Solution: this case can be adjudicate by the method of mediation.

Justification: In this case, parties under an agreement agrees to appoint a person who will decide
the disputes of the parties by remaining independent and unbiased (Ali 2018).
Case Scenario 3
Legal issue: an application submitted by the creditors seeking winding up of a company can be
maintainable or not ?
Legal solution: By looking at the issue of the Black-Horse company, an arbitration can be the
most preferable option to determine the disputes.
Justification: Arbitration is the option given to parties before bring a case into court. This
process is far better than other options which enables parties to solve their issues outside court
without wasting time (De Girolamo 2022).
M3 – Analyses the advantages and disadvantages of the formation of different types of
business organisation.
Following are the merits and demerits of different business structures:
Advantages of sole proprietorship
 most easy to establish
 no need to get registered
 owner enjoys all the profits. (Akhtar2020)
Disadvantages
 Owner individually liable for all the losses
 there is no tax benefits given in sole trade
 thin funding
Advantages of partnership
 simple process for its formation
 liabilities are shared between partners
 there are lots of tax benefits
Disadvantages
 profits shared between partners
 all the liabilities and losses are upon the partners.
Advantages of limited company
 it keeps partners separate from company
 there are ample sources of funding available in limited company.

 The liability of company does not transfer to its shareholders (Butler 2022).
Disadvantages
 management is complex to handle
 high charges for registration at companies house
CONCLUSION
From this above report, it has been concluded that the UK legal system is unique and
complex and provides comprehensive legal system to secure the rights of the parties. The
common sources of law is International Convention, treaties, customs etc. that helps in
identifying the rights and interest of the citizens
The management of funds are necessary to meet the day to day requirement of a business and
meet the uncertainty in the future. The financial soundness of a company highlights their overall
performance and brand value in the market. The dispute resolution mechanism of ADR gives the
quick and speedy remedy to the parties and assist them to amicably settle the dispute. Under the
UK company law, several rights an power has been provided to the shareholders, employees and
directors of the company to brings transparency and efficiency in their working system. The
Employment law safeguards the interest and legal right of the employees and employer, and also
improves better interaction among them. The contract law of UK is derived through principle of
Common law and has uncodified legislation. It creates legal obligation over the parties who are
legally binding through the terms of the contract and enforce their rights towards each other.
Therefore, the functioning of an organisation are comply with the certain legislation, standards
and regulation that are binding upon them.
REFERENCES
Books and Journals
Macgregor, L., 2019. Remedies for breach of contract in Scots law. In Research Handbook on
Remedies in Private Law. Edward Elgar Publishing.
Mitkidis, K., 2019. Development of transnational contract law?. In Transnationalisation and
Legal Actors (pp. 97-111). Routledge.
Morgan, J., 2022. THE THIN END OF THE WEDGE: MORALITY, CONTRACT LAW AND
LAWFUL ACT DURESS. The Cambridge Law Journal, 81(1), pp.17-20.
Poole, J., Devenney, J. and Shaw-Mellors, A., 2021. Contract law concentrate: law revision and
study guide. Oxford University Press.

Siliquini-Cinelli, L. and Hutchison, A., 2019. Comparative Constitutional Contract Law: A
Question of Legal Culture. In More Constitutional Dimensions of Contract Law (pp. 1-
13). Springer, Cham.
Smith, A.M., 2022. An empirical study of the effects of regulatory systems on the collection of
late payment of commercial debts owed to micro and small businesses in the
UK (Doctoral dissertation, University of Plymouth).
Teague, P. and Donaghey, J., 2018. Brexit: EU social policy and the UK employment
model. Industrial Relations Journal, 49(5-6), pp.512-533.
Vandich, A., 2022. Seven reasons to open a company in the United Kingdom.
Wesanko, J., 2021. A Corporate Compliance and Ethics Program Compliant With the Foreign
Corrupt Practices Act and the UK Bribery Act: Mission Impossible.
Williams, A. and Paterson, C., 2021. Social Development and Police Reform: Some Reflections
on the Concept and Purpose of Policing and the Implications for Reform in the UK and
USA. Policing: A Journal of Policy and Practice, 15(2), pp.1565-1573.
Aguda, O., 2018. The Legal Regulation of Receivables Financing: The UK and International
Perspectives. The Gravitas Review of Business & Property Law, 9(3), pp.50-67.
Akhtar, Z., 2020. Low Skilled Jobs, Free Movement Migration and Employment in the
UK. Labor Law Journal, 71(3), pp.144-153.
Ali, S.F., 2018. Mediation in the UK courts: Efficiency, Confidence and Perceptions of Justice.
In Court Mediation Reform (pp. 65-84). Edward Elgar Publishing.
Butler, L., 2022. Reform of the UK Single Source Contract Regulations: A Regulatory Weapon
in the Defence and Security Industrial Strategy’s Arsenal. Available at SSRN 4130092.
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resolution processes. In Research Handbook on Intellectual Property and Cultural
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Haines, A., 2018. UK considers closer links between employment and tax rules. International
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