Business Law: UK Legal System and K Company Expansion

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UNIT 7- BUSINESS LAW
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Table of Contents
Introduction................................................................................................................................3
TASK 1......................................................................................................................................4
Principles and sources of legal system...................................................................................4
The role of government in law framing and application of statutes and common law in
judiciary..................................................................................................................................5
The efficiency of English legal system..................................................................................7
TASK 2......................................................................................................................................8
Impact of company law, employment law and contract law on corporates...........................8
Difference between regulation, legislation and standard.......................................................9
Evaluation of the legal system with relevant examples.......................................................10
TASK 3....................................................................................................................................11
Explore how different types of business organisations are legally formed.........................11
As per the advice provided by the K’s accountant to set up the limited company and this
context, there are several types of business organisations that are formed legally are as
follows:.................................................................................................................................11
Explain how business organisations are managed and funded............................................12
Assess the advantages and disadvantages of the formation of different types of business
organisations........................................................................................................................13
Legal solutions for K company during its expansion...........................................................14
TASK 4....................................................................................................................................15
Recommended legal solutions..............................................................................................15
A comparison of different sources of dispute resolution.....................................................16
Effectiveness of legal solutions and legal advice.................................................................17
Conclusion................................................................................................................................18
References................................................................................................................................19
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Introduction
The establishment of the KANGO (K) company was done in the year 2016 by Jay and Alex
with the aim of delivering food and related services at the threshold. The business was
confined to West London initially but now the company is planning its expansion in other
regions. But before proceeding the company needs to educate its employees regarding the
existing legal framework which is in force in the region where the expansion is to be
implemented. Hence the presented report provides for the description of legal system of the
United Kingdom which shall be applied on the functioning of the K company in the new
regions.
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TASK 1
Principles and sources of legal system
The UK legal system is divided according to the geographical area and jurisdiction of the
countries which consists of three main areas which are:
 England and Wales
 Scotland
 Northern Ireland
Each of these jurisdictions have its own laws, courts and judges. But laws which have the
sources common are applicable equally to all the jurisdictions.
Further the judgment of the courts may vary in cases as per the jurisdiction but the final
appeal for all the cases is done in the UK supreme court.
Primary sources of law:
Primary sources of law include-
 Legislations
 These includes the Acts of parliament, statutes, orders and regulations.
 Case laws
 This includes the decision of the higher courts and courts of record and these
decisions are binding on the lower courts (Hart and Green, 2012).
Secondary sources of law:
Secondary sources of law include-
 Text books and commentaries given by legal writers
 The opinions of the law experts
 Decisions of foreign courts
The courts consider the secondary sources when there is question in the primary sources
while making a judgment. But the court is not bound to take into consideration these sources
(Hart and Green, 2012).
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The role of government in law framing and application of statutes and common law in
judiciary
There are mainly three main organs of the government which are the executive, the
legislature and the judiciary. The legislature is the body which is responsible for the framing
of laws. Hence the role of government in law making process is through the legislative body
of the UK.
The Parliament of the UK is the supreme legislative body in function which is responsible not
only for the drafting of the laws but also for the approval and rejection of the drafted laws
(McLaughlin, 2014). there are two houses of the parliament namely:
 The House of Lords
 The House of Commons
The House of Lords is the upper house of the parliament where as the House of Commons is
the lower house. Apart from the enacted legislations the regulations passed by the European
Union is also applied on the United Kingdom as the UK is the member of the EU under the
European’s Committees Act 1972.
The following is the procedure of law making in the UK Parliament:
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First Reading Arriving of the bill
Second reading Discussion on purpose and key areas of the bill
The committee
stage Changes are recommended in this stage
Voting is done to propose change or not.
The Report
stage Detailed discussion is done for amendment and changes
Royal Consent In this stage the bill is approved by the Queen and becomes law.

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Statutory law and common law
1. Along with the above-mentioned sources, the statutory laws are also made applicable
in the courts as the complete judgment of the case is according to the prescribed law.
The legislature enacts certain Acts and provisions for particular purpose and hence,
the court and judges are required to interpret these Acts and laws while giving
judgments (MacCormick, and Summers, 2016).
2. Further, common law is also a source of law in the United Kingdom. Common law is
the law which is declared by the judges and is derived from customs and precedents.
a. The common law principles are based on the Latin phrase ‘Stare Decisis’
which means ‘let the decision stand’. The judgments rendered by the senior
courts or courts of records are binding on the lower courts who come across
the case having same circumstances (Common laws, 2017). Hence the
application of the common law is seen in the judicial functioning.
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The efficiency of English legal system
Though there are many reforms made in the recent years in the legal system of UK, still there
is concern regarding the delay in justice specially in civil and corporate cases. Due to this
reason there are some more reforms implemented in order to make people access justice in
less time.
Lord Woolf, the former Chief Justice imposed certain reforms in the civil justice system in
one of his report named “Access to Justice” released in 1996 (Anderlini, 2019). He
emphasised in his report that the civil judges be just and fair in their judgments. He also laid
down the foundation for the formation of the Civil Procedure Rules (CPR) in 1999 with later
on proved to be an effective measure to fasten the litigation process.
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TASK 2
Impact of company law, employment law and contract law on corporates
As per the facts of the case the K company has made its couriers signed a contract with the
company in which they have assented to abide by the couriers’ code of standards. The signing
of the contract acts as an evidence that they are employees of the company and are not self-
employed. Hence the K company shall have the responsibility of securing the rights of the
employees and provide them with healthy working conditions.
Company law
 In the United Kingdom, the corporations are subjected to the Companies Act 2006
which provides detailed description from the formation till the dissolution of the
company.
 Hence the K company shall also be subjected to these laws when it shall be extended
to other regions of UK. This Act of 2996 also provides for the company’s liabilities to
pay debt and that the members are only liable up to the extent of their investment.
Employment laws
 Along with the company law the K company shall also be subjected to employment
laws like the Minimum wages Act 1998 under which it is required to pay a minimum
of £7.86 per hour. This wage varies according to the age of the employees.
 Along with this the company shall also be subjected to Employment Rights Act 1996
which shall provide security of rights of the employees (Countouris, 2016). These
rights include the right of paid leaves, leaves for parenting and maternity, protection
against unfair dismissal, etc.
Contract law
 The influence of contract law shall also be seen on the functioning of the K company
as the company is required to abide by the principles of contract law while making
business transactions.
 These laws protect the rights of the parties and also provides the way in which a
business contract shall be enforced in the court.
 It also contains provisions regarding the redressal procedure in case the rights of any
party are affected due to breach of contract (McKendrick, 2014).
The application of these laws on the operations of K company is an accepted evidence that
the couriers of the company are within the category of employees and are not under self-
employed.
Hence the K company is at a liability under the enacted statutes to protect the rights of the
employees.
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Difference between regulation, legislation and standard
The legal system of the United Kingdom contains regulations, enacted legislations and
certain accredited standards which are required to be followed by the companies operating in
the UK.
The following is the difference between the three:
Legislation Regulation Standard
 These are enacted
statutes by the
legislatures.
 These are enforcing
rules of the
legislation.
 These are not drafted
by the government
but are made by the
organisation itself.
 This provide
description of legal
requirements and
also punishment for
violation.
 This is one step
ahead which aims at
implementing the
legislation.
 These are the
principles behind a
work.
 This provides for the
basis of law.
 This provides for the
details of how the
law is to be
implemented
(McLaughlin, 2014).
 These serves as a
guideline while
performing a work.
 The publication of
the legislation is
required in gazette.
 The publication is
only required in form
of a notice in cases
of amendments.
 There are a number
of standards for
different fields. For
example, a separate
set of standards is
drafted for
accountants,
employees, auditors,
presiding officers,
etc.
The impact of legislation is such on the K company that the company shall get itself
registered under the Companies Act 2006 after it executes its expansion.
The regulations shall also be applied on the K company as these regulations shall demonstrate
how the legal principles shall be made applicable on the company.
The company shall also be required to form a set of standards internally in order to maintain
effective working among the employees.
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Evaluation of the legal system with relevant examples
One of the oddest things about the English legal system is the constitution of England is
unwritten. Along with this there is also a parliamentary form of government in the UK it
means parliament is the sovereign body in the UK and the supreme legal authority
empowered to create and end any existing law.
The following is the analysis of the English legal system with that of the United States of
America:
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Basis of
Comparison
Constitution
Form of
government
Tribunals
Legal authority
United Kingdom
Unwritten
Parliament is
supreme
Relies on decision
of tribunals
Derived from
legislation
USA
Written
President is
supreme
Absence of
tribunals
Derived from case
laws particularly
law reports

TASK 3
Explore how different types of business organisations are legally formed.
As per the advice provided by the K’s accountant to set up the limited company and this
context, there are several types of business organisations that are formed legally are as
follows:
Sole proprietorship
A sole proprietorship is the business where the business is administered and controlled by one
single person and the whole business is owned by the owner of the business. This type of
business is operated at a small level where the proprietors own the trade in many industries.
Company
Company is a separate body corporate or the groups of individuals who are engaged in
operating a business enterprise. Company is managed by the directors and controlled by the
shareholders of the company. The company abides with the provision of Corporations Act,
2006 (Kraakman and Armour, 2017). The company divided into several categories includes
private or public company, limited or Unlimited Company, a company limited by guarantee
and company formed for community interest.
Partnership firm
A partnership firm is a firm where two or more partners get combined to share the profits and
losses in an agreed ratio as per the provision mentioned in the partnership deed with mutual
consent.
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