Report on the Legal Framework and Legal Solutions for Businesses

This report offers a comprehensive analysis of the English legal system, including its sources and divisions, and its application to business operations. It examines the employment status of drivers, concluding they are employees based on control and lack of self-employment characteristics, using the Pimlico case as a reference. The report then explores different types of business organizations, such as sole proprietorships, partnerships, and companies, along with various methods for raising capital, including venture capital, crowdfunding, and bank loans, and details the steps involved in registering a business. Furthermore, it discusses the legal implications of business registration, including corporate identity and the roles of directors. Finally, the report focuses on alternative dispute resolution (ADR) methods, particularly arbitration, advising Pegasus to utilize arbitration to resolve commercial disputes due to its cost-effectiveness and efficiency compared to litigation.

The Legal Framework and
Legal Solutions

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2 ...........................................................................................................................................3
TASK 3............................................................................................................................................3
TASK 4............................................................................................................................................5
CONCLUSION................................................................................................................................6

INTRODUCTION
In a nation, for operations of the business and other legal works laws, statues, legislation
and regulations are provided by the government and other regulatory bodies and this is termed
as legal framework of that country. The framework also proved the ways and remedies through
which commercial disputes can be resolved, and this is referred as legal solutions. In the present
report Pegasus is presented with detail about the English legal system with its sources and
division. Employment status of drivers is ascertained along with presenting legal status business
gets once its get registered. For resolving disputed advise is given to how they can solve
commercial issues.
TASK 1
English legal system [ELS]:
This is one of the oldest law system of the world as its roots are being connected with
12th century. In the older time law were based on customs which is still one of the sources of law
in UK. The legal system was reformed in legislation in 19th century. This system is still different
from the structure of various nation around the globe.
Division of law:
Civil law: It is that branch of the UK laws that deals with cases of civil wrong done to a
person or organisation by other. This includes cases related with claims for personal injury, tort,
negligence, breach of contract, employment disputes, family disputes etc. In this no one is hurt
physically or suffered immense level of damages. The injury is usually meta rather than physical
and remedies are given in from of claims for the damages.
Criminal law: It is the branch that deals with case involving damages and harm related
with personal injury along with those crimes of serious nature. This includes cases related with
rape, murder, theft, sexual assault, battery etc. The offender is punished with imprisonments,
imposition of penalties or community services.
Sources of law:
Customs: Common laws are based on the customs which can be defined as the habits n,
beliefs and general practices of the people or community which becomes ritual and on the basis
of the laws are made.
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Act of parliament: through primary legislation the Parliament enact the laws or statures
which are enforced by the government (What is an Act of Parliament, 2018). This is needs to be
interpreted in its full sense without any changes.
European law: UK is a member nation of EU so the regulations, legislation and laws
made for EU are also applicable in UK.
Case laws: with doctrine of judicial precedent the decision of case laws given by higher
courts gets binding effect lower court to refer the same in cases of similar matter.
Act of parliament:
An act of Parliament is a process through which status are formed in UK. It is
responsible for making new or amending existing laws (How does a bill become a law?, 2018).
The laws made are enforced by the government by that are enacts thorough procedure set up for
the parliament. A statute comes into force after following the below process:
The bill is presented to one of the house of parliament either house of common or house
of Lords:
First reading: a short tile of bill is read out and copy of bill is given to all members
Second reading: bill is considered and all put froward their opinion on principles of the
bill and debate is carried out.
Committee stage: each parts of the bill is considered separately and changes in the bill
are suggested.
Report stage: voting is done of incorporating the suggested amendments.
Third reading: the final bill is considered and voting is done for approval of the bill
with changes.
The bill is presented to another houses of parliament and it goes through same procedure as
mentioned above.
Consideration of amendments: When a Bill has passed through third reading in both
Houses it is returned to the first House (where it started) for the second House's amendments
(proposals for change) to be considered.
Royal assent: This is an agreement of monarch to make bill into agreement and with
royal a bill becomes a law.
Problems associated with ELS:
1. Non availability of the UK constitution written format.
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2. Parliaments is sovereign as all laws and reforms are made through it only.
3. More reliability on the customs to make the laws.
TASK 2
Pimlico case: this is a popular case which gave a clear definition with defining the
employment status of the people working of business. In this case the court made a
pronouncement that though plumbers were working on contractual basis buy they fulfilled basic
requirement to be employee and one of them were having a contract with business. The plumber
in this case were given a status of workers of the Pimlico organisation and entitled for sick, leave
and holiday pay.
Employee and their rights: as per the employment act of UK, employee on an
organization are is one who have an employment contract and work for the definite working
hours of the business and get for the paid for the same all material and thing to do the work is
provided by the employer. The employee work as per term and condition of the employer and
leaves and pay rules are also set by organization, Eg: Manager of a firm.
Self employed: A professional who works for an employer on contractual basis. They do
not have a written agreement. The person work as per own terms and condition and bring in all
material and equipment with him/her to carry out the work. They even can hire someone else to
do their work.
Employment status: For the given it can be seen that drivers are working in accordance
with condition of Pegasus, all equipment are provided by business as well. Moreover, they can
not hire someone else apart from drivers of Pegasus and are controlled by control system of
Pegasus. Hence, here absences of freedom of self employed can be established and drivers have
been defined as employee of Pegasus.
TASK 3
Types of business organisation:
Sole proprietorship: business is owned and operated by a single person having full
control over the business as well on the revenues earned from it. The assets and property of the
business belong to that person only and he/she is liable for all liabilities and obligations related
with the firm.
Partnership: A business formed and operated by two or more person who are referred as
partners. They bring in capital to run the business and shares the profits of the business in a
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predetermined ratio. The extent of liability is limited to the percentage of the capital
contribution.
Company: A company is formed in accordance with provision of company's Act, 2006.
It has is own legal personality separate from its members and owners. Capital is raised by
issuing shares of by mes as well. Liability of shareholders in is unlimited in this type of
organization.
Limited liability company: this is also a type of company, the main difference is that
liability of the shareholders and members in case on insolvency or dissolution is limited to a
fixed extent.
Sources to raise capital and their advantages and disadvantages:
Venture Capital: this investigation is huge an investor demand strong financial reporting and
management information.
PRO: A strong measure for ambitious businesses.
CON: the investors can demand safeguards in case the business do not go as per the plan.
Crowdfunding: The process involved speaking to investors offline in preparation for the
campaign, pulling together our video and other pieces of the campaign to put forward a
compelling message, and communicating the opportunity to our community.
PRO: Possibilities to access cash and increase the profits.
CON: need more efforts in order to raise the funds and invest them.
Bank loans: this means to borrow money from the banks in exchange of giving some securities
regarding the borrowed funds.
PRO: easy to raise loan in case a strong security is available.
CON: involves higher interests rate putting burden on the operating overheads of the business.
Steps needs to register a business:
 Decide the name of the organisation which must not resemble or identical to any other
name, do not depict any national and international logo or flag and must not hurt
sentiment of anyone.
 Defines the adders of the registered office of the organization.
 Appointment of directors of the business.
 Subscription to memorandum of the association by the members of the firm.
 Preparation of Article of association defined the provision to run the company.
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 Describe the share structure of the company. In the statement of the shareholding.
 Presenting statement of the compliance stating that all legal requirement are complied
with.
Status of a business on registration:
On being registered as company in accordance with Company's Act, 2006 a business
get corporate identity as a corporate legal person in the eyes of law. It gets an identity of its own
as a separate legal entity apart from its members, directors and owners. It gets a right to have its
own property and assets and liabilities along with rights and obligations (Adam, 2016). The
doctrine of corporate legal personality was first established in case of Solomon V Solomon as a
company is separate from its owners. Directors can not be held liable to pay the amount due on
behalf of the company. In case of Lee V Lee the concept of separate legal entity was set, which
means is business is separate from its owners having its person assets and liabilities along with
rights and obligations. The organisation can be sues in its name and also it can sue others.
Role of directors:
 To exercise the powers in limit as they are empowered and to go beyond them.
 To exercises skills, diligence and care in business practice.
 Do not take interest in any proposed transaction of the business for person benefits.
 Do not take any benefits from third party in the capacity of the directors.
 To promote the success of the organization.
TASK 4
Alternative dispute resolution: ADR can be defined as an alternative method to solve
the business problems with avoiding the court processing and litigation processes. The ADR
process are less time taking and expensive as compared to court proceedings. This is not formal
in natures and parties get to involve in the process for reaching the solution to solve the
problems between them. Thees are different types of ADR methods which mainly includes:
Arbitration, negotiation and Mediation.
Arbitration: this is most preferred method in the preset times by the business
organization to solve the commercial issues and problem arising between them. The major
reason behind opting this method is this involves less times and cost. The process start with
inclusion of arbitration clause in the business agreement stating that each and every dispute will
be referred to arbitration this means none parties to agreement can go to court and file law suit.
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In this am impartial third party is appointed as arbitrator and after taking in to consideration all
facts evidences and investigation details carries out a final decision is passed, the decision have
biding effect to all parties to disputes and they do not have right to appeal in the court against
such decision.
Advise: Pegasus is her be given an advised to choose arbitration methods of ADR to
refer its business disputes. Th advises is recommended with considering the facts of cost of
litigation involves time taken and taking mutual consent of parties which is more preferably
arbitration.
CONCLUSION
From the above report on legal framework and legal solution it can be concluded that
law system is UK is many centuries old but it got its authentication in 19th century. It has two
major division and specifically 4 sources of the law. Further more the status of the drivers who
hired van from Pegasus has been articulated as employees as they do not match with the
conditions for self employed. Moreover, Pegasus has been advised to register its business as
with this business gets a status of legal personality having its own identity. In the last section o f
the report Pegasus is recommended to opt for arbitration to resolve its commercial disputes in
order to curb the cost and time of litigation.
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REFERENCES
Books and Journals
Adam, A., 2016. Law for business students. Pearson.
Online
How does a bill become a law?. 2018. [Online]. Available
through :<https://www.parliament.uk/about/how/laws/passage-bill/>.
What is an Act of Parliament. 2018. [Online]. Available through
:<https://www.parliament.uk/about/how/laws/acts/>.
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