Unit 7 Business Law: Legal Framework and Solutions

This report examines the legal framework and legal solutions within the context of UK business law. It begins by outlining the various sources of law in the UK, including constitutional, statutory, common, and EU law, as well as the role of the government in law-making. The report then delves into the application of contract, employment, and other relevant laws within businesses, including the Company Act, copyright law, and health and safety regulations. Furthermore, it explores different types of business organizations such as sole proprietorships, partnerships, private companies, limited liability companies, and NGOs, discussing how firms are funded and managed. Finally, the report addresses legal solutions for resolving business disputes, offering a comprehensive overview of the legal landscape for businesses in the UK.

The Legal Framework and
Legal Solutions
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Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1 Explain different sources of law.............................................................................................3
P2 Role of government in law making and how common and statutory law are applied...........4
LO 2.................................................................................................................................................5
P3 How contract, employment and other laws are applied.........................................................5
LO 3.................................................................................................................................................6
P4 Different types of business organizations...............................................................................6
P5 How firms are funded and managed.......................................................................................7
LO 4.................................................................................................................................................7
P6 Legal solution for solving business disputes..........................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
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INTRODUCTION
A law consists of several rules and regulations which are to be followed by individual as
well as businesses. There is a proper legal framework in which entire structure of legislation is
defined. This gives insight on rules to be followed. The legal framework differs in nation as per
the government formed (Baillie,, 2019). They play crucial role in it as government govern and
monitor all laws and regulations. It is also implied on business in order to be formed and operate
in that country. However, laws need to be properly governed so that no business run in illegal
way.
the report will lay focus on sources of law in UK and role of government in making of it.
Moreover, it will describe about how contract, employment laws are applied in business and type
of business which exists. furthermore, it will be discussed on sources of funding and ways of
solving dispute in legal manner.
LO 1
P1 Explain different sources of law
In UK there are various sources through which laws and regulation are formed. The
sources enable in governing of laws as well. However, each source is having its own duty and
role in it. Thus, in UK they are defined as below :
Constitutional law- It is foremost law that is to be followed by government as well. In this
various rights and acts are mentioned in it. This is applicable to every citizen as it protects their
rights. Moreover, constitution is written in various languages as well. Along with it, law is
applied to public place and other institutions as well (Guild, Grant. and Groenendijk, 2020).
Statutory law- It is applicable to individual as well as private business and company. The law
enact in different way. The statute is mainly written law which always enacted in the different
manner. Many statutes are voted as well as written into the specific law by other government
branch. It is the simplest way to determine the group of individual that are elected for purpose.
Each and every state must follow the legislation and codify their criminal statues into penal bar.
The statutory law is generally inferiors to other constitutional law. It means that statute never
conflict with another supersede right of constitution. At that time, court plays significant role to
resolve the conflict issues . If in case, it has found the invalid unconstitutional statues which
automatically control to use the judicial power.
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Common law- this is applicable when judge make a statement or decision in court related to any
case. thus, they have to review it before taking decision and enact in that way. However,
statutory is applied as well in court. but on contrary this law is opposite of civil system. the
system relies on status. This law is applied in both England and Wales.
Case law – it consists of social principles of legislation as in this guidelines are issued by court.
in UK the state government is having right to form case law according to their requirement.
Basically, laws are related to criminal cases in which state can deal it in their own way.
European Union law: United Kingdom has been a part of European Union which basically
means that EU takes control over UK law (LeBaron and Rühmkorf, 2019).
The European Convention on Human Rights: In this the country is been engaged in making
sure that all rights are been protected which has bene given by the ECHR. In this UK is having
right and duty to protect this law.
P2 Role of government in law making and how common and statutory law are applied
In law making government plays crucial role. They form laws in parliament and then govern
it as well. Also, they are having power to modify or dismiss any law and maintain it as well. So,
in UK laws are formed by government in parliament. There are two houses in it they are house of
lords and commons. Thus, laws are made into these and passed by them. All political party sign
bill and then it becomes a law. Alongside, both federal and state government needs to be ensured
that laws are applied by them. Besides that, it is analysed that by discussing with parliamentary
committee government make law. The Legal draft is prepared and then it is presented into
parliament for discussion. Then representative of government pass that law.
A legal system contains various elements that needs to be applied by government in
effective way. It has to ensure that laws are properly formed and applied. In UK, law is applied
in England and Wales. so, there is common and statutory law applied. The common law is
related to judicial system where statutory is state one. Each state is responsible for applying of
laws at state level. in this change can be made by state according to crime. etc. (MacNeil,. and
Esser, 2020)
Thus, in UK all laws are formed within parliament and law is formed by passing it into both
houses. Then, designated authority of government signs it to make it law. The state authority
form state law based on crime and other one. The govern and regulate laws as well to ensure that
all businesses and individual follows it in effective way.
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LO 2
P3 How contract, employment and other laws are applied
As discussed above there are some other laws as well that is applied to businesses. These
laws are related to operation of business. It regulates and govern conduct and behaviour of firm
operating in UK. However, the laws differ in nation as it is formed by government. Besides that,
laws contain policy that needs to be adhered by businesses in effective way. So, the laws applied
are contract, employment and company. It is briefly explained as below
Company act- as name shows it is followed by company and business in UK. they have to get
register themselves so that duties as well as roles of director, shareholder, manager etc. are
defined into it. In addition, it provides license to company to operate within nation. in law there
are some rights mentioned as well that protect business confidential info. the director burden is
reduced as his duty is specifically defined by act. Moreover, act was formed and applied in 2006.
Contract law- The law is applied between an agreement of employer and employee. In this it is
stated about roles and duties of both parties which they have to follow in legal way. Alongside,
contract is made between supplier and company as well. Thus, law obliged duties of both parties
towards each other. Besides, it also includes terms and conditions that are mentioned into
contract which abide them. So, in case of breach of contract legal action is taken (QC, 2020).
Copyright law- the law is applied by business in context of copyright of things. So, when a
business develop product then law is applied. It contains policies and guidelines issued by
government in regard to use of patent and trademarks. So, act enable in protecting copyright of
business.
Health and safety – The act formed in 1974 state various elements regarding health and safety of
employees. It states guidelines and rules to be adhered by employer at work place. They need to
provide proper health and safety environment to staff. Moreover, the act contains standards,
guidelines etc. to be followed by business. Besides, it is mentioned about tools and equipment
that needs to be installed at work place. It has to be obliged by company and provide training to
staff as well.
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Employment act- this act state relation between employee and employer. Here, the duties and
roles of both are defined which they have to adhere. Besides that, it sets accountability of
employer towards employee and vice versa. The guidelines related to working hours, salary, etc
are defined in it. Alongside the act protect and safeguard rights of employee by giving them legal
power (Tachmatzidi, 2019).
LO 3
P4 Different types of business organizations
A business is a legal entity which is engaged in developing products and services and with
aim of generating revenue. However, every business differs from each other in terms of size,
concept, type, etc. along with it, there are many ways on basis of which business differs. thus,
structure is formed on basis of type of business. It is defined as below
Sole proprietorship- in this business is owned and managed by single owner. The person is
responsible for taking decisions and handling of entire business activities. Moreover, profit
earned is not distributed and individual is responsible for loss as well. This types of business is
easy to set up. The cost required is not huge as well. Moreover, it has to be legally registered by
under Company act (Themistocleous, 2019)
Partnership- As name shows there are 2 or more than 2 partners in this business. They start for
same purpose that is earning profit. However, an agreement is signed that falls under Partnership
act. In this it is mentioned about duties of partners and profit sharing ratio, decision making
power etc. Here, liability of partner is limited as it is based on investment made by them.
Basically, a deed is signed which specifies duties, terms and conditions of both partners.
Private company – This business is started by group of people who are having mutual goals. the
business is registered under company act as it is separate legal entity than others. Thus, here
liability of partner is limited. The shareholder with mutual interest decides and select BOD. So,
entire decisions are made them on behalf of shareholder. furthermore, there is no dissolution of
firm even when it dissolved but however its ownership changes (Webster, . and Webster, 2020).
Limited liability company – this type of business is having feature of both partnership and
company. they are not incorporated as owner is having limited liability. It can be either a sole
proprietorship, partnership etc.
NGO- In this a business is set up for social cause. there is no aim of earning profit in it.
moreover, NGO are formed by private companies or an individual. the laws and regulations
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applied in it are different from normal business. besides, they are run via funds obtained from
various sources.
P5 How firms are funded and managed
The basic requirement for starting a business is funds. It is needed to buy resources, raw
materials, etc. and to run operations. Moreover, funds requirement depends on type of business
and its size. It is necessary to acquire sufficient funds otherwise it can lead to failure or loss. so
there are different sources from where funds can be acquired. They are as follows
Bank loan – this source is common as funds are easily available from it. Here bank gives loan on
value of security deposit. They charge moderate interest rate and loan given is for particular time
period. However, process is highly time consuming as it has to follow a long procedure.
Personal income – It is source that is easily obtained. here, it contains cash, asset, land, etc. that
can be used to fund business. but in this only limited amount is available (Wilke and
Macpherson, 2019).
Financial institution- they are those companies or firm that provide loan to business. they are
similar to bank loan. but difference is interest rate charge is high and procedure followed is
quick. Besides that, funds are easily available in it. however, fund acquired depends on security
deposited. There are many NBFC and institutions that provide loans.
Investors- There are many investors who are ready to invest in business. But in this case the idea
or concept needs to be unique so that investment is available. the investors analyse idea and
accordingly invest amount in it. but if business is successful, they buy stake in it. through it, they
get high return on it
Friends- the funds can be easily acquired from them. however, amount is less as compared to all
other sources. however, it is less risky source as well.
LO 4
P6 Legal solution for solving business disputes
It is necessary to resolve any dispute which occurs in business. It is because if dispute is
not solved then it impacts of entire operations. thus, there are certain legal solution available for
solving dispute. In this concept of ADR that is alternative dispute resolution is applied. In this all
disputes are solved outside court. this enables in taking effective decision to solve dispute. the
process is less costly but consume more time. however, ADR method can be either is
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commercial or labour dispute. ADR is procedure of solving dispute by an independent person.
there is no involvement of court in it (Yu. and Moskal, 2019).
So, there are many methods in ADR through which dispute is solved. they are defined as
below
Negotiation- It is a method in which dispute is solved with through negotiation. here, both parties
listen to opinion of one another and then with mutual understanding decision is taken. there no
mediator appointed in it.
Mediation- in this method a mediator is appointed who solve dispute by hearing both parties
views and then taking decision. this process occurs when there is no outcome obtained from
negotiation (Baillie 2019).
Arbitration- it is similar to mediation method but here an arbitrator is appointed. it is highly
effective ADR as compared to above methods.
CONCLUSION
Hereby, it is summarised that legislation is formed on basis of law and regulation. There are
many laws which is adhered and followed in business. In UK it consists of different laws that are
statutory, case, etc. Each one is having different complications in it that is applied in state and
federal. The government form laws in parliament and then govern it as well. Also, they are
having power to modify or dismiss any law and maintain it as well. Moreover, there are several
laws like employment, contract, copyright etc applied in business. it contains guidelines and
rules that needs to be adhered by organization. Besides that, there are several types of businesses
such as partnership, private company, NGO etc Its structure and size vary as per its type. in
addition, sources of funds for firms are bank loan, investors, friends and others. However, there
are certain legal solution that can be followed by business to solve disputes. They are mediation,
negotiation and arbitration.
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REFERENCES
Books and journals
Baillie, K., 2019. Regulation of Crowdfunding in the UK: Past, Present... and Future. Business
Law International, 20(2), pp.147-92.
Guild, E., Grant, S. and Groenendijk, K., 2020. Unfinished Business: The IOM and Migrants’
Human Rights. In The International Organization for Migration (pp. 29-51). Palgrave
Macmillan, Cham.
LeBaron, G. and Rühmkorf, A., 2019. The domestic politics of corporate accountability
legislation: struggles over the 2015 UK Modern Slavery Act. Socio-Economic
Review, 17(3), pp.709-743.
MacNeil, I. and Esser, I.M., 2020. The Pandemic Response in the UK in the Context of
Corporate and Financial Law–within and without Law. Available at SSRN 3636292.
QC, M.R.H., 2020. Dr Folarin Akinbami, Lecturer in Commercial Law in the School of Law,
Durham University, UK. Mr Andrew Campbell, Director, Ashridge Strategic
Management, Lon-don, UK (Doctoral dissertation, Google).
Tachmatzidi, I., 2019. Comparative analysis of takeover defenses in strong and weak economies:
the paradigm of the UK and Greece.
Themistocleous, C., 2019. Employment status in the UK: implications for business
owners. Journal of Aesthetic Nursing, 8(2), pp.92-94.
Webster, G.D. and Webster, H.K., 2020. The Law of Associations: An Operating Legal Manual
for Executives and Counsel. LexisNexis.
Wilke, M. and Macpherson, A., 2019. Liability of Banks for Aiding Tax Evasion: A
Comparative Analysis of German and UK Law. European Journal of Risk
Regulation, 10(1), pp.148-163.
Yu, Y. and Moskal, M., 2019. Missing intercultural engagements in the university experiences of
Chinese international students in the UK. Compare: A Journal of Comparative and
International Education, 49(4), pp.654-671.
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