Business Law Report: Legal System, Business Impact, and Solutions

This report examines the core aspects of business law, beginning with an introduction to the legal system, including sources of law such as domestic legislation, common law, EU law, and the European Convention on Human Rights. It then delves into the role of government in law-making and how statutory and common law are applied in justice courts. The report further explores the impact of company, employment, and contract law on businesses, using specific examples to illustrate their potential effects. It also investigates the legal formation of different business organizations, including sole proprietorships and partnerships. Finally, the report offers recommendations for legal solutions to resolve disputes, providing practical examples of how parties might seek legal advice and support. The report uses the case of Mrs. Sheigman and Mrs. Tunstall as a real-world scenario to demonstrate key legal concepts.

Business Law

Contents
INTRODUCTION.....................................................................................................................................3
LO 1............................................................................................................................................................3
P1 Explain different sources of law.........................................................................................................3
P2 Explain the role of government in law making and how statutory and common law is applied in the
justice courts............................................................................................................................................5
LO 2............................................................................................................................................................6
P3 Using specific examples illustrate how company, employment and contract law has a potential
impact upon business...............................................................................................................................6
LO 3............................................................................................................................................................7
P4 Explore how different types of business organizations are legally formed.........................................7
P5 Explain how business organizations are managed and funded............................................................8
LO 4............................................................................................................................................................9
P6 Recommend legal solutions for resolving a range of disputes using examples to demonstrate how a
party might obtain legal advice and support............................................................................................9
CONCLUSION........................................................................................................................................10
REFERENCES........................................................................................................................................12

INTRODUCTION
Business Law comprises of all the laws that direct the formation as well as operation of a
business. There are different laws that govern how to start and manage any kind of business. It
also includes all the rules that businesses should follow in order to run their operations in a
smooth manner.
Business Law is important as it helps in maintaining order in businesses that are alike.
Not only this, the law also protects the rights of companies as well as their employees in order to
establish a standard as to how different processes should be run (Batlan and Bass, 2018). One of
the major functions of business law is to resolve disputes among businesses.
The main purpose of business law is to protect the rights of individuals so that each of
them is allowed for their constitutional rights. The report is based on the of case Mrs. Sheigman,
who ran a pork butcher’s shop and leased the shop next door to Mrs. Tunstall and wanted to end
the lease.
The case comes to the court but before this happens, Mrs. Sheigman turned her business
into a company. The report explains different sources of law and the role of government in law
making and how statutory as well as common law is applied in justice courts.
There is also an explanation of the impact of law on a business and how different types
of organization are formed legally. Lastly, the report also explains how business organizations
are managed as well as funded along with some recommendations regarding legal solutions for
resolving disputes.
LO 1
P1 Explain different sources of law
In today’s world, it is considered to be important to have a legal system that is effective
and ensures an orderly function in order to avoid any kind of unethical behavior (Beatty
Samuelson and Abril, 2018). There are four major sources of law in the United Kingdom, which
are domestic legislation, European Union (EU), common law as well as the European
Convention on human Rights (ECHR). Mrs. Sheigman, Mrs. Tunstall, Larry and Chris need to

know the different sources of law that organizations must comply with. The same are explained
below –
Domestic Legislation – This source of law covers both primary as well as secondary
legislation. The UK Parliament, based in London, is the only body in the nation that possesses
the power to pass laws. Primary legislation is passed by the Parliament and includes bills of the
Government as well as the private members. On the other hand, secondary legislations can be
introduced by the Government and its is generally done by issuing regulations that are called
statutory instruments.
Common Law – The common law has been developed over the years by judicial
precedents and is commonly referred to as case law (Beatty, Samuelson and Abril, 2018). The
decision of a judge in a case becomes a precedent and is binding on similar cases. In simple
words, common law is legal model that is developed by the judges of a court. It is an important
source of law in those areas that are reserved for the states to regulate.
European Union (EU) – The European Union can require governments of the Member
states to introduce the legislation in certain areas. The United Kingdom is a Member state of the
EU, which means that the EU law comes before the UK law.
European Convention on human Rights (ECHR) – The ECHR is an international law
that was incorporated into domestic legislation by the Human Rights Act 1998. The act came
into force in the year 2000. It enables all the courts in the United Kingdom to protect the rights
that have been identified in the ECHR (The Legal System of the United Kingdom, 2020).
Statutory Law – This is another source of law that applies to and regulates both
individual as well as private action. It can be defined as a written law that that is passed by a
legislature body or another other official body. Most statutes are written into law by the
legislative branch of the UK government.
Therefore, these are some sources of law in the United Kingdom that govern human
conduct that can come into existence in different ways (Block-Lieb, 2018)

(Bonnitcha and McCorquodale, 2017). The United Kingdom comprises of four countries,
England, Wales, Scotland and Northern Ireland. There are some laws that apply to all the four
countries, while some apply to only one or two of them.
P2 Explain the role of government in law making and how statutory and common law is applied
in the justice courts
The government plays an important role in law making and has two main functions
related to the same. All the legislative proposals are brought before the government in the form
of bills. A bill can be defined as a statute in draft that cannot become a law until the government
has approved it. The two key functions of the government in law making are described below –
Drafting the Legislation – The government plays a role in drafting the legislation as
some parliaments enable the different committees to develop draft of different laws. On the other
hand, there are some parliaments that allow the citizens to introduce draft laws (Davis and
Geyfman, 2017). It is the responsibility of the executive branch of the government of the nation
to develop new laws as well as policies. Once the policies have been developed, they are
approved and given a legal effect.
Reviewing Legislation – This is another important role of the government is to review
the legislation. It is not necessary how a legislation is introduced into the Government; it is
important to review as well as study the draft before it is approved. A draft for a legislation
undergoes various stages before it is approved. All of this helps the government in making sure
that the law is not passed very quickly. The different stages involved in reviewing legislation
include committee stage, approval of the draft law in principle, reviewing the different clauses
and then final adoption of the draft. This helps in ensuring that the law is implemented in an
effective manner and also protects the rights of the people.
The statutory laws are the new laws that are issues by the different agencies of the
government. It is also known as the written law and is prescriptive in nature. The statutory law
confides certain rules and regulation, whereas the common law provides interpretations. New
statutory laws keep forming in order to meet the needs of the citizens and resolve any issues that
are outstanding (Common Law vs. Statutory Law, 2020). Since these laws are written laws, there
is not much difficulty when it comes to applying them in justice courts. Therefore, these are
applied to a specific case and there not any process of doing so. On the other hand, common law

is developed on a daily basis without creating any kind of expense for the state. It is a legal
precedent that the judges within a court use. It is also not in a written form and helps in
implementing the new legislation. The facts of the law are applied to the case that is being heard
prior to making any decisions and judge decides which precedents apply to the case. Therefore,
this is how the two laws are applied in the justice courts.
LO 2
P3 Using specific examples illustrate how company, employment and contract law has a
potential impact upon business
Company law primarily regulates how a company is incorporated and how it conducts its
business operations (Zhang and Li, 2017). Any change in the law can lead to changes in the way
businesses in the nation. It can have an impact on the employer as well as employee. In the given
scenario, the relationship of Larry and Chris with their employer Mrs. Sheigman might get
affected. It is mandatory for all organizations to adhere to all the rules and regulations in the
company law in order to run their business operations in an effective manner (Faulconbridge,
2019). This is because the Company Law in the United Kingdom forms the base for organizing
and running a business efficiently. On the other had, employment law regulates non-
discrimination as well as non-exploitation among employees, workers at the workplace.
This can be done by maintaining weekly working hours, providing the employees the
minimum wages, ensuring their health, safety and working conditions to ensure a high level of
productivity. For example, in the given case, the weekly working hours for both Larry as well as
Chris were increased and also, they were paid a flat rate for the hours that they worked.
Employment law is basically formulated in order to protect the rights of the employees working
in a business. It is necessary for the employer of a business to comply by this law if they want to
avoid any kind of costly claims related to employment. This is also important because not
complying by the employment law can create issues for the business, like lack of discipline
among the employees, age discrimination, equal pay etc. these issues can further lead to affecting
the overall operations of the business in a negative way.
Contract law is another kind of law that can potentially affect a business, this is because
the law regulates how different legal entities like companies should execute their contracts in
order to avail services as well as maintain the different documents (Gurrea-Martínez, 2018).

Under a contract, an offer is made by the seller and accepted by a buyer. A contract comprises of
certain terms and conditions that apply to the purchase that is being made by the buyer. If for
example, there is no contract in the given case of Mrs. Sheigman and Mrs. Tunstall, there would
not be any legal binding document. It is important that Mrs. Sheigman gets a contract drafted and
approved by her lawyer. This is because the contract will act as a proof between the two parties
and also avoid any kind of misunderstanding. Not only this, Mrs. Sheigman will be able to keep
her information secure from any kind of fraud in the future.
LO 3
P4 Explore how different types of business organizations are legally formed
There are different forms of business organizations and each of them has different
characteristics as well as features. Also, they have their own advantages and disadvantages. The
different types of business organizations and the way in which they are legally formed is
explained below –
Sole Proprietorship – A large number of small businesses start their operations through
sole proprietorship. Such organizations are owned by a single person who is responsible for
managing and running the business on the whole (Hill, 2019). Sole proprietorship organizations
are formed by the owner of the business himself and there are no legal conventions involved in
their formation. But in some cases, legal formalities can be required or the owner is expected to
have a particular certificate or license in order to run the business smoothly. Advantages of this
form of organizations is that it is the easiest and least expensive.
Partnership – In organizations of this form, two or more people share the ownership of
the business. In order to form a partnership, two or more people come together as partners and
form the entity. The profits and losses made by the business are shared personally among the
partners. It can be formed by a verbal agreement without any requirement of documentation, but
this can lead to misunderstandings. Therefore, it is important for the partners of the business to
enter a legal partnership agreement in the written form. This helps in carrying out the business
activities smoothly. Partnerships are legally governed by the state law.
Corporation – Corporations are another form of business organization that are legal and
separate from their owners (Hjelmeng and Søreide, 2017). They can be held legally liable, can be

taxed and can make a profit. This form of business organization offers the most protection to its
owners. The formation of a corporation involves a legal process, which is called incorporation.
In this process, legal documents that contain the primary purpose of the organization, its name
and location as well as types of stocks and number of shares are represented. Before
commencing its business operations, a corporation is required to have a bord of directors who are
responsible for making important decisions.
Limited Liability Company – The Limited Liability Company or LLC is another form
of organizations, that are designed in order to provide limited liability features of a corporation
as well as flexibility of a partnership. LLCs are separate entities wherein liability is limited to the
share capital contributions of the shareholders (Keay and et. al., 2020). The legal formation of a
limited lability company, an operating agreement has to be submitted to the state’s Small
Business Association. This also involves the formal paperwork as well as a filing fee.
P5 Explain how business organizations are managed and funded
Managing and funding a business organization are most important components to ensure
that the activities run smoothly. They also ensure the growth and success of the firm which leads
to an increase in the overall profitability. In order to ensure an effective management of the
business organization, it is important to focus on different areas. Firstly, customers are one of the
major components for a successful business organization and the management of the firm should
focus on providing the best possible service to the customers. This is because if the customers
will be loyal to the company, they will contribute to its overall success (Kubasek and et. al.,
2020). Besides this, in order to ensure that the business activities are being managed in an
appropriate manner, the market activities should be increased. By increasing the marketing
efforts, a company can create awareness about itself and reach to as many people as possible.
Any kinds of unnecessary costs should be cut down so as to make sure that the business
processes take place efficiently. Business organizations should keep revising their respective
business plan in order to make sure that that the activities are in line with the goals as well as
objectives. The employees within the organization should be treated equally and they should be
encouraged to share their suggestions and ideas during the decision-making process. This will
make them feel involved and also, they will be comfortable in working with each other as part of
a team. Funding on the other hand, is one of the most important for setting up a successful

business. There are a lot of different ways in which a business organization can be funded. The
various funding options that are available for business organizations are explained below –
Self-funding – A lot of small businesses fund themselves, which means that the owner of
the business uses their personal savings. Also, they can sell some assets in order to raise funds
for the business.
Family and Friends – This is another option of how a business can be funded, wherein
either friends of family members of the person support them by providing some funds (Romanis,
2020). It is important for the owner to let the investors know about the different risks in the
business beforehand.
Crowd Funding – It is referred to as the process of funding a business which involves
raising small amounts of money from a large number of people, like through the internet. This
form of raising funds for the business is more efficient than traditional methods.
Banks – Banks are most common source of raising funds for a business. The owner of
the business can apply for a bank loan and use the same for setting up the business.
LO 4
P6 Recommend legal solutions for resolving a range of disputes using examples to demonstrate
how a party might obtain legal advice and support
There are different legal solutions available for resolving various disputes that may arise
between two parties who do not agree with each other. The different appropriate methods that
can act as legal solutions for resolving a range of disputes include negotiation, mediation,
litigation and arbitration. Negotiation is one of the most basic means that is used for settling
disputes and finding a common solution that is beneficial for both the parties. For example, in
context to the given case study, the court can opt for a direct negotiation between Mrs. Sheigman
and Mrs. Tunstall in order to resolve the dispute between them. If the negotiation is successful, it
will fulfil the needs of both the parties.
Another legal solution for resolving a range of disputes is mediation, which can be
defined as a voluntary process wherein the mediator assists in communication and promotes
reconciliation between the two parties that are involved in the dispute (Stim, 2018). The mediator

does not make a decision for the two parties, but helps in facilitating negotiation between them.
Arbitration can also act as another method to resolve a range of disputes. The process is
controlled by an arbitrator who listens to both the parties and then makes a decision that is in
favor of both of them. Lastly, litigation, which means going to the court in order to find a legal
solution for a dispute. It is very important that the specific rules of procedure, presentation of
evidence etc. are followed. For the given case, both the parties are recommended to opt for
litigation in order to resolve the dispute.
Legal advice or support can be obtained by a party either through litigation or any other
dispute resolving solution that are described above. If both the parties reside in the same country
and speak the same language, as in the given case study, it is easier for them to obtain the legal
advice or support without any kind of misunderstandings. Any party who wants to seek legal
support, can speak to the legal authority or committee through submission of an application (Yu,
2018). The application can either be sent in a written form or by filling up required forms. The
applications and forms should state the cause for seeking legal support or advice. It can also be
described orally to the concerned legal officer.
CONCLUSION
From the above report, it can be concluded that business law is an important component
for the smooth functioning of business organizations. The main purpose of business law is to
resolve various disputes, maintain order, protect the rights of employees working in the
organization, establishing different standards etc.
There are different sources of law like common law, ECHR, statutory law etc. and the
government plays an important role in the process of law making. It ensures that the draft of a
particular legislation is reviewed thoroughly before it is approved and implemented.
Also, different laws like the employment law, contract law as well as company law can
have a significant impact on the operations of a business. If a business organization fails to
comply to these rues and legislation, they will have to deal with the consequences of the same.
There are different types of business organizations like sole proprietorship, corporations,
partnerships and limited liability company. All of them are formed through different ways as

each one of them has different legal requirements. Also, there are many ways in which an
organization can be managed effectively.
These include ensuring a great customer service, revising the business plan of the
company from time to time etc. Funding is necessary and can be done in different ways like
through bank loans, family and friends, investing personal savings etc. a party can obtain legal
advice or support by submitting an application or filling out a form and submitting the same to
the concerned authority.

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