Comprehensive Analysis of UK Business Law: Regulations & Solutions

This report provides a comprehensive overview of business law in the UK, beginning with an examination of the UK's legal system, including its various sources of law such as jurisdiction, legislation, and common law. It discusses the government's role in legislation, the effectiveness of the legal system, and critical developments within it. The report then analyzes the effects of the law on businesses, covering aspects like business impact on sole traders and limited liability companies, employment implications, and contract effects. It differentiates between legislation, regulations, and standards, and assesses different types of business organizations. Furthermore, the report explores the formation of different types of organizations, focusing on administration and funds, and discusses the advantages and disadvantages of each type. Finally, it addresses legal dispute resolution solutions and evaluates the effectiveness of the UK legal system in resolving business disputes.

Unit 7: Business Law

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO1 - TYPE OF LEGAL SYSTEM:...............................................................................................3
D1 – CRITICAL DEVELOPMENT OF THE LEGAL SYSTEM :................................................5
LO2 - EFFECTS OF THE LAW IN THE COMPANY:.................................................................6
• BUSINESS IMPACT:...................................................................................................................6
M2 : DIFFERENCE BETWEEN LEGISLATION, REGULATIONS AND STANDARDS :......7
D2 – CRITICAL ASSESSMENT OF DIFFERENT TYPES OF BUSINESS
ORGANIZATIONS:........................................................................................................................7
LO3 - FORMATION OF DIFFERENT TYPES OF ORGANIZATION:......................................8
ADMINISTRATION AND FUNDS OF BUSINESS ORGANIZATIONS :.................................8
M3 – ADVANTAGES AND DISADVANTAGES OF DIFFERENT TYPES OF BUSINESS
ORGANIZATION:..........................................................................................................................9
ADVANTAGES .............................................................................................................................9
LO4 - LEGAL DISPUTE RESOLUTION SOLUTIONS:............................................................10
D3 – EFFECTIVENESS OF THE LEGAL SYSTEM:.................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
The business has a direct impact on the law and is very important and extensive for a
company. There are different types of business models in the UK that play a very important role
in business. To understand the depth of this subject we will go through from the nature of the
legal system in the UK and the source of the law, the government's role in legislation, the impact
of different laws on each type of business and the formation of different types of business
organizations with their funding and management who have the best fit for the UK business
model and its legal sources. As we cover the entire subject point by point, we learn about serious
legislative changes in the UK and their main scenarios within your organization's sources. In
addition, this important information provides a better overview of the legal system in the United
Kingdom and the role that the government plays in the same legal system in the country.
MAIN BODY
LO1 - TYPE OF LEGAL SYSTEM:
The UK has four countries, namely Scotland, England and Wales and Northern Ireland,
each of which has its own jurisdiction and court laws applying different jurisdictions have been
derived through acts of parliament and statutory instruments. They have different jurisdictions
and courts that can decide matters according to their court order, but all matters rest with the UK
Supreme Court. The country's legal system works well and there is still no written constitution
for the country as the Queen is the head of state but all major powers reside within the
government which has all executive functions. Since the Labour government came into force in
1997, there have been important constitutional rules. They immediately start the decentralization
process, which means that some areas of government are transferred to countries that make up
the United Kingdom.
VARIOUS LEGAL SOURCES:
In the UK there are mainly 3 sources of law before 31 December 2020, but after leaving the EU
the UK has 2 sources of law which make them unconstitutional laws:
JURISDICTION :
The decision of the magistrate or higher court made by the judge is binding on any lower court in
the country. Going through precedents in previous cases helps the court make a decision on the

same facts when the same case has already been decided in the past. As soon as a case has to be
decided on the same facts as a new case, the case will be dealt with in the same way as before,
since according to the principle of "stare decisis" this means "standing by what is decided", the
lower court follows the established precedence previous case with similar facts and if facts were
similar sufficient and not exactly the same as the judge has options:
1) Distinguish: When the facts are different, the judges have the opportunity to distinguish 2
cases and they do not have to refer to the decision of previous cases.
2) OVERRULE: If the decision in a case is made by a lower court, the upper court can
overrule the judgment of the lower court in the same case.
3) RECOVERY: Upon appeal to a higher court, the judges can overturn the judgment
rendered by a lower court.
LEGISLATION :
This is the primary source of law in the UK, this is the only body that makes or breaks
legislation and this means making a new law or amending an existing one. The bill passed by
Parliament must be approved by both houses before the bill becomes law. There are steps that
create new law. The rules laid down by law refer to statutory provisions. The parliamentary act
or statute is an essential source for creating new law or destroying older ones, as it is one of the
main sources for the country's legislation, along with the judge's decision in court.
ROLE OF GOVERNMENT IN LEGISLATION:
This has a large government role in legislation in the UK as it is only one way of making
legislation in the country through Parliament. Legislation is made by Parliament, which has 2
houses, one is the House of Common and the second is the House of Lords, the parliamentary act
applies to all 4 countries of the UK.
There are two types of bills submitted to Parliament:
1) PUBLIC LAW: The law that is introduced when the general public needs to amend laws
passed by the Cabinet in the Legislative Government's program.
2) PRIVATE LEGISLATION: The bill is introduced by non-ministerial MPs, the bill has
priority some days but not regularly due to the lack of parliamentary time.
COMMON LAW :
The decision of the Court of Appeals or previous precedents, called jurisprudence or
common law or jurisprudence, gives precedence to common law as it is considered unfair when

the same fact is treated in different ways. Judges referred to cases that happened in the past to
make decisions in current cases that would be enforced in future court rulings. If in the future a
case similar to the previous one comes before the court, the court will make the same verdict.
LAW :
This is a written document or act that is considered the will of the legislature. This is a
command statement formed by law that must prohibit or obey some actions of people. This is a
rule of law, or a system of principles established by the legislature that governs the citizens of the
country. If the bill passes both houses for all citizens to obey, and if they fail, a citizen will have
to go to court. The court must follow the law or act passed as legislation.
M1 – EFFECTIVENESS OF THE LEGAL SYSTEM :
The UK legal system is based entirely on precedent which was clear as it is substantive
common law. Having left the European Union, the UK has now become a fully independent
judiciary with the rule of law and that fact attracts business confidence, bringing stability to the
trading world and changing at a rapid pace. Arbitration in the UK has become the most common
legal factor in settling a dispute, which is a great thing for the court's time efficiency and for the
citizens of the country or the people in dispute. The organization of Great Britain grows over
time and becomes one of the leading insurance, commercial and financial centres around the
world, affecting business across Great Britain.
D1 – CRITICAL DEVELOPMENT OF THE LEGAL SYSTEM :
The UK has common law in the country, but it does not have a written constitution that
makes much of a difference and an unstable situation that leaves the legislature unbalanced or
even following them. In court, they apply the rule of stare decisis, which must be described
above for the project. However, as they depend on judgments made before the application of
judgments in similar situations which have been the crux of the matter in UK courts, it is against
legal harmony where the situation is related but not exactly the same. Yet they have loopholes in
the UK legal system that need to be tended to for the betterment of citizens.
LO2 - EFFECTS OF THE LAW IN THE COMPANY:
UK law applies to all areas of business and every business has legal obligations and rules
to keep its organization or business running smoothly and this means that from employer to

employee from contract to company all are affected by industry and business laws are . Make
sure the company complies with legal requirements that encourage this and can protect the
company from massive mistakes.
• BUSINESS IMPACT:
When companies make profits or revenue there must be a legal obligation affecting the business
by paying taxes for HMRC which depends solely on the company structure:
• ONLY DEALER :
In three months self-employment a sole proprietor must register himself with HMRC, if
registration fails the hundred pounds fine must be imposed by the sole proprietor and once
registered the business must complete an annual self-assessment duty and pay taxes.
• LIMITED LIABILITY COMPANIES:
There are some requirements for their company, the company must register in the
company house which lists all directors as well as significant influence over the company. Filing
annual tax returns with HMRC and paying corporation tax is mandatory.
• EMPLOYMENT IMPLICATIONS:
According to the Employment Act, the company has a legal duty to the workers by providing
them with pension, liability insurance, minimum wages, etc. If they have legal requirements, an
employer will shut down their business, and if they don't, the company faces a huge loss:
HMRC: The company must register with HMRC through an employer before paying any of the
workers.
WORK: The legal obligation for a company is to check whether the worker has the right to work
in the UK or not.
WAGE: The employer must pay their employee according to the national minimum wage set by
the UK government.
SALARY: The employer must provide the employee with a payslip showing how they are
earning during their tariff period.
CONTRACT: Every employer must provide the employee with a written legal contract that
includes the work accommodation, salary, duties and contractual rights to the employees.
• CONTRACT EFFECTS:

The contract basically affects the business as the organization or company has to make
the contract before starting the business even though they are selling products or providing
services. The right of contract is included in each scenario to buy, sell and resell the product.
There will be a legal factor that a contract must have for any employer or employee in the
business world.
M2 : DIFFERENCE BETWEEN LEGISLATION, REGULATIONS AND STANDARDS :
LEGISLATION: This is a legal entity for the government that governs a set of organizations or
corporations, an industry, a community, or an entire country that has a systematic ability to make
laws in the country for every citizen, followed by every corporation must be.
REGULATIONS: Regulations are a set of legal imperatives that must be followed by an
organization for business or other business that, because of protection, reasonable security and
other factors in the public interest, making regulations in administration, with a legal obligation
for the country must be connected.
STANDARDS: These make specifications for products or services by organizations, they can
have a long list of policies for business modules that ensure safety and quality. These are
business requirements that must be in place or must be followed by a company.
D2 – CRITICAL ASSESSMENT OF DIFFERENT TYPES OF BUSINESS
ORGANIZATIONS:
Turning a company into a sole proprietorship, a GmbH or an LLP is not that easy. The
person needs to invest more time and money than they can ever imagine, a successful business
wants investment in different types of people and different types of time management lead to
growth in business that is not possible for everyone given their tactics and skills need in-depth
understanding of the corporate world for a business owner to survive in the corporate
organization world and change their profit in the industry, but want to make sure they are
prepared in an calculative way to handle losses as well.
LO3 - FORMATION OF DIFFERENT TYPES OF ORGANIZATION:
Incorporating a company is a process of registering a company with a firm house, which
is a registrar for a company in the UK. Anyone registers a company by filling out the online

application form. Once registered, a company enters into a contract in its own name or takes
ownership of its assets.
1) PERSONAL ENTREPRENEUR: As a sole proprietorship, sole proprietors wish to register
with HM Revenue and Customs to make a business after registering with HMRC. A sole trader
must file a self-assessment tax return to fully qualify as a UK company and file one tax return
per year.
2) LLP: There are few ways a limited liability company needs to be registered. It can register a
corporation online without approval of registration by the corporation house and through a
professional corporation representative, or send a mail directly to the corporation house by
proposing the corporation name and address of office, director details, PSC information, MOA
and AOA. Everything must be present in the information list in a good manner for forming LLP.
3) SPS: These want to have good investments and resources for the company. In order to form a
PLC they must make an AOA which clearly states the purpose of forming a company, assets and
capital together with a shareholder as no business need take place in the UK without registering
with the company house.
ADMINISTRATION AND FUNDS OF BUSINESS ORGANIZATIONS :
There are many ways a business owner manages the establishment of an organization
from which a business can grow in the marketplace and increase its value. Some of the many
ways a corporate fund can be managed by a company:
• SMALL BUSINESS GRANTS are to be provided by the UK Government with private
organizations and local authorities providing funding and opportunities for small business
owners available for new or existing businesses.
• CROWDFUNDING provides a platform where a company raises funds through a number of
investments by individual buyers and investors. Companies give equity in exchange for
investments, or they must provide rewards and grants to investors in exchange for their capital.

• VENTURE CAPITALS invest capital growth and high risk start-ups, resulting in great
potential for founding an organization. They have large capital with enormous risks and
knowledge that allows them to expect substantial returns and ensure an organization has a good
business plan for investments that support economic growth in an area or across the country.
• MERCHANT CASH ADVANCE is financing from which a business receives financing in
exchange for a percentage of its daily credit card income. This only applies to businesses that
generate the bulk of their revenue from credit cards. MCA provides prepayments in the form of
an average monthly card spend.
M3 – ADVANTAGES AND DISADVANTAGES OF DIFFERENT TYPES OF BUSINESS
ORGANIZATION:
ONLY DEALER :
ADVANTAGES
1) This is easy to set up due to little legal need. Sole proprietors have full control over corporate
benefits to keep all profits for themselves.
2) There are sole proprietors who are decision makers for a company where the essential
information stays with them only, unlike others.
DISADVANTAGES
1) As sole traders, they run a business after their own demise. This takes some time before they
start making money and start making gross profits.
2) This is a slow win process, so a negative thing that has no liability protection with the
company.
LLP (LIMITED LIABILITY PARTNERSHIP):
ADVANTAGES
1) This gives the most flexible partnership structure due to the smooth management system in
this type of company.
2) In this type of company there is no confidentiality, the report must be private as all owners
information must be public.
DISADVANTAGES

1) The sole proprietorship tends to cost more compared to LLP firms, with the downside of their
cumbersome process and expensive bookkeeping.
2) Each member of the company gets a limited liability according to the investment in the
partnership and the tax deducted according to the share of the profit.
PLC (PUBLIC, PVT. LIMITED COMPANY):
ADVANTAGES
1) These offer protection against risk and offer limited liability as no other company takes
advantage of a tax reduction.
2) This has good value as there are specialized staff in a company that offers good financing and
good business opportunities.
DISADVANTAGES
1) This is complicated and not easy to do like other legal businesses and organizations due to the
complex legal formalities required to create the PLC.
2) You have another owner in a company, which creates an obstacle to discussing the lack
of ownership of a company.
LO4 - LEGAL DISPUTE RESOLUTION SOLUTIONS:
Alternative Dispute Resolution is an effective legal system in the UK as it is cheaper,
more flexible and faster compared to court, making it more convenient for people. There are
three ways provided by the UK government to resolve the dispute more effectively:
1) ARBITRATION: Arbitration proposes an arbitrator who makes an independent determination
of his dispute. The decision of the arbitrator is legally binding on every people and later they
cannot go to court if they are satisfied with the decision of the arbitrator. The decision made in
the arbitration will be made through submitted evidence and papers sent by both parties. Most
people use arbitration as a legal solution for business owners as they do not want to go to court to
represent the company as it can damage an organization's image.
2) MEDIATION: This is the dispute attempt to consider a solution for both sides impartial to all
persons in a dispute. This creates a healthy legal environment as both parties must resolve the
issue in the most reasonable manner. Mediation seeks to find a solution that will help both
parties and get them to agree to the deal that benefits the agreement and both sides would be
legally binding if that is a signed mediation agreement.

3) ARBITRATION: If we compare it with the other dispute resolution procedures, it is generally
a free solution and also compared to the other resolution procedures it is to a lesser extent formal,
it is the same as mediation but they are different legal ones obligations attached. Basically, it's
about focusing on what both parties want and then coming to a mutually beneficial deal based on
the fact.
ADR is considered to be one of the quickest and easiest ways to resolve disputes between
parties. The parties choose ADR to solve their problems because it saves time, hassle-free and
resolves the dispute in private.
M4 – COMPARISON AND CONTRAST OF DIFFERENT SOURCES OF LEGAL ADVICE:
After analysing the different dispute resolution methods, the best dispute resolution
depends on the situation and the contract clauses that the parties are more comfortable with. If
the individual can afford arbitration then they will surely move towards it as it is one of the
quickest ways to resolve the dispute and its decision is both binding on the party and both parties
cannot appeal the same matter. Some of the people may choose mediation as it is a solution
process that tries to come to a decision that will be in favour of both parties and few may choose
the arbitration process as it is sometimes free and less formal and In comparison, arbitration
allows the parties to appeal the decisions if they are not satisfied with the decisions.
D3 – EFFECTIVENESS OF THE LEGAL SYSTEM:
There are several legal systems to get justice, but compared to the courts, ADR is
considered to be the most effective way to resolve the issues between two parties and the court
process is also time-consuming. People must opt for Alternative Dispute Resolution when they
are willing to save time and the other is that the person does not want to go to court because it
would damage their organization's reputation.
CONCLUSION
This report concludes that the UK legal system is bifurcated into different sectors, which
is easy to understand and also very complex. It depends entirely on the facts of the scenario on
which the precedents of the various courts and the entire UK legal system are based. The nation
module of the company has a legal obligation although there are different business owners like
sole proprietorship, LLP or the PLC and each of them should ensure their business legality. In

terms of following courts to seek justice, there are several judicial bodies in the UK such as ADR
through which individuals can seek justice quickly compared to the traditional courts. Depending
on the circumstances, you can choose between ADR, mediation or arbitration.