Business Law Report: Legal Aspects for Pegasus Company

This report delves into the realm of UK business law, examining its various facets and implications for the fictional company, Pegasus. The report begins with an overview of the UK's legal system, dissecting its sources, including European Union Law, Common Law, and Statutory Law, along with the roles of the government and courts in law-making. It then proceeds to illustrate the impact of company, employment, and contract law on Pegasus, using real-world cases like the Pimlico Plumber case to highlight potential legal challenges. The report also explores the formation of different types of business organizations, guiding Jay and Alex, the owners of Pegasus, through the process of legally registering their company. Furthermore, it discusses the management and funding aspects of these organizations. Finally, the report concludes by offering recommendations for legal solutions to resolve potential disputes within Pegasus, covering legal aspects of employment and business operations.

BUSINESS LAW

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different Sources of Law and problems associated with UK’s system.................................1
P2 Role of government in law making and how statutory and common law is applied in courts
.....................................................................................................................................................2
TASK 2............................................................................................................................................3
P3 Examples of company, employment and contract law's potential impact on Pegasus..........3
TASK 3............................................................................................................................................4
P4 How different types of business organisations are formed....................................................4
P5 How business organisations are managed and funded...........................................................5
TASK 4............................................................................................................................................6
P6 Recommendations of legal solutions for resolving range......................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business law includes various laws that deals with management and operating of
businesses in a country. It has a set of rules and regulations that has to be followed in order to
legally run an organisation (Roper and Campbell, 2015). This helps in prevention of problems
and disputes that can potentially affect a business. Jay and Alex are owners of Pegasus, a small
goods delivery partnership company which was founded in 2014. It is based in Ashford, Kent
and has over 20 employees with 35 delivery vans. This assignment will cover the nature of UK's
legal system and will illustrate various laws that can potentially impact Pegasus' business.
Examination of the formation of different business organisations will be done and
recommendations will be given for appropriate legal solutions that can help resolve disputes at a
company.
TASK 1
P1 Different Sources of Law and problems associated with UK’s system
English law's sources are: European Union Law: State members are present in the European Union and discussions
are done on political, social and economic policies (Backer, 2015). The national law is
overruled by this system, when conflicts occur between them. The European Convention on Human Rights: ECHR system makes sure that citizens
that are identified, are given human rights and protected from any sort of discrimination.
 Common Law: This source includes laws which are made through principles that have
been established in cases at the time of standardisation of law in England (Kraakman and
Hansmann, 2017). They are generally flexible and other laws can overrule them. These
have to be followed by all courts present in UK.
 Statutory Law: This is a source of law that is written and set down by the legislation.
Bills are passed by members of parliament.
House of Commons are a part of legislation or parliament of UK. They are responsible
for accepting or rejecting bills that are introduced for the purpose of creating a new law (Olsen,
2015). Members scrutinize and give their opinions on the policies that are to be addressed. The
House of Lords: This part of legislation generally acts as advisory councils (English Law: An
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introduction, 2018). They investigate upon the laws and try to implement improvements that
may be required. The legislation cannot pass bills and laws without the monarch. Final approval
is given by the queen after deliberation about these acts.
UK's law system was developed in 1991 and its common law is generally classified into
civil or criminal law. This system does not have codifying constitutions documents and the
constitution is founded by doctrine principles of parliament. Civil Law is a part of the English
system law in which disputes and issues between 2 or more parties occur and need to be resolved
(Croxford and Raffe, 2015). Claimants provide burden of proof and if successful, they get
compensations in forms of money or other suitable methods. These include family disputes and
contract breaches. Criminal law is when a person feels that a crime that harms the safety of
public and its welfare, has been committed and is reported to police. Cases are resolved at court
and a judge makes decisions on what verdict has to be taken. These generally consist of murder,
fraud and assault.
UK's legal system has some problems associated to it as well. These include delays and
inefficiencies in performance for a long period. Cut back of costs has led to inability of courts to
deliver justice and increase in crime in past few years (Chemerinsky, 2016). New technological
changes do not get implemented on time and various non-profit services have stopped providing
legal help to those who require it.
P2 Role of government in law making and how statutory and common law is applied in courts
Legislation is a part of the government of UK that plays a vital role in law making. The
government drafts bill that have to be made into laws and follow a series of steps which include:
The first reading
First step of law making starts with the arrival of bill and is distributed to parliament
members.
Second reading
Second reading is then initiated, where in discussions about key principles and purpose of
the bill is done (Lang and et.al., 2018). It ends with a voting of all members and moves on to the
next step.
Committee stage
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This stage includes examination of bill and modifications are made accordingly.
Report stage
Report stage comes next, where critical scrutinization is done and reports are given for
further amendments and suggestions are given by members.
The third reading
Third reading takes place in which parliament debates and votes for finalisation (Singer,
2018). Once the amendments are considered by every person in the legislation,
Final agreement
The Queen steps in for final agreement along with The Houses (Making Laws, 2018).
This is a royal accent and she gives final approval which makes the bill a law.
UK's legal system allows common and statutory law to be applied in the courts during
disputes and their settlements. They utilise general principles and provide flexibility during cases
that take place at the Supreme court (Solomon, 2017). Lowers courts have to follow the laws or
acts of parliaments that have been chosen by higher courts. Modifications can be made by
statute, when and if they feel like changes are required in the law. Judges and lawyers have to
apply and abide to these laws when practising in UK.
The acts of parliaments can influence Pegasus' business in many ways. Modifications of
business laws are done regularly by legislations and can heavily affect operations of business.
Company has to implement these changes accordingly and prepare their financial reports
according to the new standards that have been set (Jones and Sufrin, 2016). The regulatory laws
that are concerned with business environment have to be also taken into account as it will
influence business operations of Pegasus. Employer- employee relations keep changing due to
modifications in labour, contract and employment laws.
TASK 2
P3 Illustration of examples of company, employment and contract law and their potential impact
on Pegasus
UK's legal system consists of contract, company and employment law. These are a major
part of business law. Contract law consists of an agreement between 2 or more persons that have
decided to exchange any form of property or transfer of services and sales. Examples are
documentations with business agreements, employment agreements. Employment act consists
of the law that gives importance to employers, employees and trade unions relationships. The
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UK law system provides many benefits to individuals under this act. Examples are right to
proper wages and right to privacy.
Pegasus has to oblige to employment act as it will help protect themselves as well as their
employees. But if illegal practices are done by workers, the whole company will have to suffer.
They will have to provide proper working hours along with wages that employees are satisfied
with (Raz, 2017). They have to ensure that there is prevention of discrimination of worker in
company.
Employees have to sign Pegasus' contract and have to agree to the following points
 Pegasus' vans will be hired by drivers and they are entitled to a percentage of delivery
charge.
 Substitution of driver is allowed, but only with a Pegasus' staff and permission is
required.
 Pegasus van with trackers, uniform and identity card has to be utilised by drivers.
 Drivers will be controlled from the centre and schedules will be allotted accordingly.
Pimlico Plumber Case showed that an Mr, Smith was self employed and not a worker of
the company. Under the employment act, he was allowed sick and holiday pay but not the right
to unfair dismissal. Pimlico Plumber lost in this case as even after many requests , Mr. Smith,
who was suffering from various illnesses was denied leave and the rented van was taken into
company's possession along with dismissing him. UK's court was in favour of him under
employment act rights and compensation had to paid by company. This Pimlico Plumber Case
shows that Pegasus can be heavily impacted if they do not take care of their employees and the
rights that they have. Company has to ensure that they provide them with holiday and sick pays
as well as take their health into consideration, when working for Pegasus. The employees of
Pegasus are provided with rights under employment act. Their employee status has to be
identified in order to avail the benefits and rights (Backer, 2015). In case of unfair dismissal,
claims can be made whenever it is needed. These laws help in preventing lawsuits which may
damage the reputation of Pegasus.
Employment act can have a positive impact as it increases discipline at Pegasus, which
will enable them to understand responsibilities towards their employees and provide them with
facilities that will retain them. It will also allow privacy for staff members and protect their
rights. But employees can take advantage of these acts and cause gross misconducts, which can
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lead to a negative impact in company. For example, the contract of Pegasus states that there will
be provision of work and remuneration will be given to drivers in return. The drivers at Pegasus
are self-employed, that means they are independent contractors and will work when they are
provided with packages that have to be delivered. They are not entitled to rights under
employment law and if any disputes occur, court will not be in their favour (Singer, 2018). At
times, people may work as a casual basic, which means that their work only lasts for a duration
of time and employers are not required to provide them with work.
Regulations Legislation Standards
These are detailed instructions of how laws are
enforced.
These are principles used to implement
required laws.
It helps in carrying force of law. It helps in maintaining quality and efficiency.
Application is mandatory. Application is not mandatory.
TASK 3
P4 How different types of business organisations are formed
Pegasus was founded in 2014, and has not yet been registered legally. They have become
a major customer of Amazon, which can create many threats for them in the future. For this
purpose, Jay and Alex have decided to register their company through proper legal formation.
They have to prepare a list of documents and send them to registrar office of Ashford, Kent and
follow their rules and regulations for registration (Chemerinsky, 2016). They will have to apply
for a partnership company as there are two owners.
Partnership deed:
A partnership deed will be drafted and it will include various documentations that has to
be sent to registrar office. This consists of capital invested by partners and their profit-loss
sharing ratio.
Articles of association:
This will include documents of rules and regulations for running the business along with
capital contribution of each partner, authorities and responsibilities of Jay and Alex and
composition of organisation. Names and address of company and owners, accounting period and
date of commencement will be mentioned in the partnership deed.
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Memorandum of association:
Memorandum of association includes details of Pegasus' owners' names and signatures
along with their profit-loss sharing ratio will be mentioned.
Obtaining a local license:
Pegasus has to obtain a local license in order to run business. This is done through
submission of relevant documents at registration office, which will enable them to proceed with
business activities.
Determination of tax obligations:
Pegasus will have to determine their tax obligations so that they can register themselves
at local and state level (Jones and Sufrin, 2016). Registration for a state employer identification
numbers has to be done as well.
Opening separate bank account
Pegasus will need a separate bank account as businesses are a separate entity. Alex and
Jay are required to open an account in the name of the business, so that transactions can be done.
This can be done by providing bank with a copy of partnership agreement and tax ID number of
Pegasus.
It is important for Alex and Jay to register Pegasus as it will be of benefit, when and if
disputes arise in the future. The process of legally forming a company is time consuming and
highly complex (Solomon, 2017). Registrar officials may not always be convinced with
information provided and can reject them.
Alex and Jay are the directors of Pegasus and they have certain roles and responsibilities,
which include creation of strategic plans and decisions which will lead to achievement of
business goals. They conduct meetings with managers, discuss about ideas that can help in
growing and expanding company (Olsen, 2015). They have to ensure that products of their
customers are delivered on time through proper operation functions.
P5 How business organisations are managed and funded
Pegasus is a partnership company which was founded in 2014. In order to grow and
expand, they will be in need of funds (Kraakman and Hansmann, 2017). These can be attained
through the followings methods:
 Addition of partners: Pegasus can increase their capital by asking new partners to
invest in their company and join them as managing or silent partner .
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 Loans: Alex and Jay can apply for loan under Pegasus' account as it is easily
available and can re pay the loan in their profit-loss sharing ratio.
 Working capital: The difference between current liabilities and current assets can
be used as a source of fund for expanding and growing Pegasus. This is a quick
method for short term finance, when required.
 Retained Profits: Pegasus may have retained their profits that have been earned in
the past (Raz, 2017). This can be used to fund their business and invest in growth
of organisation, without any external investments.
Management is present at all types of organisations. Alex and Jay work together in
Pegasus, which is a partnership firm and have to ensure that there is proper planning, organising,
coordinating and controlling of business activities. They have to discuss with their managers
about strategic plans that have to be made and implemented, so that they can work effectively
and efficiently while delivering products to people (Roper and Campbell, 2015). This will help
Pegasus in successfully managing marketing, finance, accounts and operational functions that
have to be carried out. They can fund themselves from various sources so that they can grow and
expand in the city.
TASK 4
P6 Recommendations of legal solutions for resolving range
Pegasus is a company that delivers packages of customers at various locations in the city.
They can face legal issues during operations and it is essential for them to analyse various
solutions in order to prevent or resolve range. ADR or alternative dispute resolutions can be used
for resolving disputes between an organisation and customer. This method avoids the process of
hiring a lawyer and going to court. Arbitration is a type of ADR, where in parties mutually have
to submit their dispute to arbitrator(s), that will be responsible for making a decision and settling
it (Lang and et.al., 2018). Mediation is the other type of ADR, where both parties work together
with a 3rd party or individual, who is called mediator. This method aids in fast and cost efficient
settlement of dispute with proper justice.
Pegasus will not be able to afford high rates for legal advice regarding commercial
disputes as £350 per month is very expensive for them. There are alternative methods for legal
advice which include:
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 Online services: There are multiple online services that Pegasus can opt for, that are
cheap and quick (Backer, 2015). Their rates start from £7 per month and these services
have helped many individuals in UK to resolve disputes. Legal clinics: These are institutes that have been set up by law schools in order to train
students that aspire to be lawyers. They have affordable and free services that can be
availed by persons who are unable to afford lawyers.
 Non-profit organisation: Lawyers, paralegals, investigators and social workers come
together and work at non-profit organisations (Croxford and Raffe, 2015). They aim at
providing legal advice to people with average incomes.
CONCLUSION
This assignment can conclude that UK has a law system in which The House of
Commons, The House of Lords and The Monarch makes decisions related to passing of acts of
parliaments. Common law has been divided into civil and criminal law, in which accused
persons will have to go to court to settle disputes. Employment, contract and company law
highly influences business operations of Pegasus. They have to establish themselves in a legal
method, so that they can stay safe from various threats that can cause harm to their company.
Pegasus can use alternative dispute resolution for solving legal disputes and can opt for
affordable legal advice from various alternatives.
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REFERENCES
Books and Journals:
Backer, L.C., 2015. Moving forward the UN guiding principles for business and human rights:
Between enterprise social norm, state domestic legal orders, and the treaty law that might
bind them all. Fordham Int'l LJ. 38. p.457.
Chemerinsky, E., 2016. Constitutional law. Wolters Kluwer Law & Business.
Croxford, L. and Raffe, D., 2015. The iron law of hierarchy? Institutional differentiation in UK
higher education. Studies in Higher Education. 40(9). pp.1625-1640.
Jones, A. and Sufrin, B., 2016. EU competition law: text, cases, and materials. oxford university
Press.
Kraakman, R. and Hansmann, H., 2017. The end of history for corporate law. In Corporate
Governance (pp. 49-78). Gower.
Lang, M., and et.al., 2018. Introduction to European tax law on direct taxation. Linde Verlag
GmbH.
Olsen, T.D., 2015. Law, Business and Human Rights: Bridging the Gap, edited by Bird Robert
Raz, J., 2017. The rule of law and its virtue. In The Rule of Law and the Separation of
Powers (pp. 77-94). Routledge.
Roper, V. and Campbell, E., 2015. Creativity and Commerce: The rise of the experiential
business law clinic in the UK.
Singer, L., 2018. Settling disputes: Conflict resolution in business, families, and the legal
system. Routledge.
Solomon, L.D., 2017. The privatization of space exploration: business, technology, law and
policy. Routledge.
Online:
English Law: An introduction. 2018. [Online]. Available through:
<https://www.inbrief.co.uk/legal-system/english-law/>
Making Laws. 2018. [Online]. Available through:
<https://www.parliament.uk/business/lords/work-of-the-house-of-lords/making-laws/>
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