UK Business Law Report: Government's Role, Impacts, and Organizations

This report provides a comprehensive overview of business law in the UK, encompassing various critical aspects such as the sources of law, the government's role in law-making, and the application of statutory and common law. It delves into the potential impact of company law, employment law, and contract law on businesses, highlighting the significance of compliance with regulations like the Companies Act 2006 and the Employment Act 2002. Furthermore, the report examines different types of business organizations, including sole proprietorships and partnerships, discussing their formation, management, and funding. Finally, it addresses legal solutions for resolving disputes, offering recommendations to navigate legal challenges effectively. This document serves as a valuable resource for understanding the intricacies of mercantile law in the UK, providing insights into the legal framework that governs commercial activities and business operations.

BUSINESS
LAW

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different sources of law........................................................................................................1
P2. Role of government in law-making and application of statutory and common law in
justice court.................................................................................................................................2
TASK 2............................................................................................................................................5
P3. Potential impact of company, employment and contract law on a business.........................5
TASK 3............................................................................................................................................6
P4. Different types of business organizations formed legally.....................................................6
P5. Explanation as to management and funding of business organizations................................8
TASK 4............................................................................................................................................9
P6. Legal solution for resolving disputes along with recommendation......................................9
CONCLUSION..............................................................................................................................10
REFERENCES:.............................................................................................................................11
.......................................................................................................................................................11

INTRODUCTION
Business law is the legislation that governs commercial transactions or dealings in trade.
It has two distinctive areas: (a) regulation of commercial entities through company, partnership,
agency and bankruptcy and (b) regulation of commercial dealings by laws of contract and related
rules. In UK corporations are required to follow various Act, rules and code for smooth
functioning of business (Cownie and et. al., 2013). These regulate sales and purchase of goods
and services within the national boundaries of UK. This report exhibits various aspects regarding
business law in UK such as sources of law and role of government, potential impact of company,
employment, contract law, different types of business structure, their raising and management of
funds and recommendation legal solutions for solving disputes. By the end of this file, one will
understand entire mercantile law in UK.
TASK 1
P1. Different sources of law
English legal system is based on the common law of England and Wales and is divided
into criminal law and civil law. UK has judicial precedents which have been developed over the
years through decisions of judges. Every ACT that exist in UK has been made by the
Westminster Parliament. There are various sources of law which are as follows:1. Primary Sources: These are the first hand information that have not been used in the
past and are usually order, decisions or regulations given by a court, legislature, President
or state governor. Case Law: These are the decisions taken by judges in UK courts and are published in
“law reports”. A case law contains reliable facts, issues and determination along with the
principles on which case has been concluded (Collison and et. al., 2014). In English
Legal system, doctrine of judicial precedents has a great role and are of binding nature for
future legal decisions.
 Legislation: UK Parliament has the supreme authority to pass a law and enact it as ACT.
UK has a partially written constitution and for written part various Acts have been made
applicable throughout the country. These are render superior to all other sources, hence,
can not be on the validity in courts.
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2. Secondary sources: These are the data and information that have been explained,
interpreted and analysed before. Such sources include encyclopedias, law reviews etc.
These are as follows: Legal Encyclopedias: Halsbury' Laws of England is the only authentic source that is used
in England and Wales and is arranged alphabetically (Llewellyn, 2016). It provides
inclusive information about various laws applicable in UK. The information so contained
has been written by or in consultation with leading lawyers who have expert knowledge
in the field. Parliamentary and Non-Parliamentary publications: Former is a set of command papers,
debate of Parliament, House of Commons and house of Lords papers. Latter is report and
consultation papers that have been provided by government departments and agencies.
These are important to know the history as to why an ACT has been enacted. Law commission: UK has constituted an independent body to monitor and review the
implementation of law and recommend the areas where new legislation or amendment is
required. Committee consult with public at large and interested parties together with
experts before taking any decision. Law Journals: These are the source of extensive information which covers general as
well as specific area of law. Further, these include academic arguments and news letters
in order to update the knowledge of practitioners regarding laws. The legal issues are
described in detail.
 Textbooks: These are treated as one of best sources before proceeding for a research on a
legal topic. The matters are written by various authors for students. Some examples of
textbooks on legal areas are, Chitty on Contracts, Smith & Hogan's Criminal Law etc.
P2. Role of government in law-making and application of statutory and common law in justice
court
UK has a partially written constitution on which various ACT have been passed to give
legality for the actions of UK people (De Lacy, 2013). Every citizen in the country is bound to
comply with the provisions of laws that been made applicable by the government. The major
reason for such legislations is that government has a responsibility to run the economy. The lives
of people are governed by the enactments made by government. Hence, it has a vital role in law-
making in UK. Government assess the areas of a state in terms of taxation, health, welfare,
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environment etc. and make laws that will be in good favour of UK people by taking into account
national interests. Further, plans are formulated and implemented in different areas, which is then
monitored by Westminster Parliament to determine effects and outcomes of such plans.
Furthermore, it is the duty of government to give its suggestions and recommendation for
making amendments (Conley, 2014). Along with this, government shall prepare draft law which
is to be presented before both the houses of Parliament. The opinions of government formed on
research and analysis conducted by it in various fields of economy forms the basis on which
further enactment should be decided. Hence, the role of government is very important and
primary before making and implementing an ACT.
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Common law is the body of law that is based on the doctrine of judicial precedent. These
are based on decisions passed by judges of courts in UK. It has an underlying requirement, that
lower courts are bound to follow decisions of superior courts and should not reply or take into
account any statutory laws. These are developed on everyday basis without creating any
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additional expense to the state. These are updated version of already existing law whose process
begins with research analysis, judgement of previous relevant cases, determination of
judgements so passed. Amendments is Common law can be made by Statutory law. It is termed
as procedural law which comprises various rules that regulates court proceedings in various
lawsuit. Further, relevant facts and evidences shall be taken into account on the basis of prior
decisions made by courts in similar cases.
Statutory law refers to written laws that have been enacted by legislative body. The
interpretation and enforcement such law depends on judiciary. These are codified which means,
that all different laws are compiled in one place and given numbers for reference (Sokol, 2015).
These can be repealed by a future enactment or if found unconstitutional by a court of competent
jurisdiction. These are already written which just need to be applied to a specific case. They are
made by government which is then organized or interpreted into law codes. It is wider in scope,
as it also covers those areas which is outside the ambit of common law. In order to make
modification in existing law, a separate statute must be established. It defined rights and duties of
UK citizens as well as the punishment for offences or non-compliance of provisions.
TASK 2
P3. Potential impact of company, employment and contract law on a business
Laws are made to provide a guideline that can be followed by every business
organization. There are many Act, that are applicable on an entity. Hence, UK government has
enacted laws that are required to be complied with and these are as follows:
 Company law: The provisions of Companies Act, 2006, is applicable on all the
companies operating in UK. The laws and rules govern activities of company, duties of
its directors, rights of shareholders etc. (Hoppe and Schmitz, 2013). A company is an
artificial judicial person having separate legal identity with common seal and perpetual
succession comes into existence only when it is registered under Companies Act. Further,
every corporation is required to comply with this legislation for its smooth functioning. It
is mandatory for every company to comply with this act in order to avoid any legal
consequences. For example, amendments have been made in duties of directors, so if any
of the director does not comply with such updated provisions, then he will be held liable
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for his acts and may also be removed from his position along with paying loss to the
company caused by him.
 Employment law: Employment Act, 2002, governs relationship between employers and
employees. The main aim of the provisions of this law is to protect workforce against any
kind of unfair treatment. Further, it provides for leaves, minimum pay, dismissal process,
protection against discrimination, working hours, redundancy etc. It promotes equality
and uniformity in all UK organizations. A person who has faced any kind of harassment,
bully, or he has denied leave or for any other matter, that is covered in the ACT can apply
against such an employer in Employment Tribunal (ET). Manpower is one of the most
important assets for any company, hence, they should be treated in a just and fair manner.
For example, new provisions regarding salary and leave have been added in the existing
law, in such a case, employer is required to abide by such changes (Kaya and
Vereshchagina, 2014). If he fails to follow such law, and dismiss his employee for
seeking leave or his part of salary, then personnel may go to ET and file a case against his
employer together with compensation of loss that has to bear by employer.
 Contract law: A contract means an agreement between two parties that involves some
consideration and can be enforceable by law. Also, it must be made with legal intention.
In UK, contracts entered into by companies are governed by Sale and Supply of Goods
Act, 1994. These are usually executed between a buyer and a seller. Further, the Act
provides for various relief and actions that can be sought by either party in case a term or
clause has been breached or a party has acted in contravention of contract. For example,
there is a company called A, which has entered into a contract with its creditors. The
company failed to repay the amount within the specified time. In such a case, creditors
have option to file for its winding up as the entity has breached one of the major clauses.
TASK 3
P4. Different types of business organizations formed legally
There are many types of business organizations that are formed according to the laws in
their specific Act (Akpan and Amran, 2014). Each type of structure has their advantages and
disadvantages which should be considered before choosing a form. They are as follows:
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 Sole Proprietorship: This structure is suitable for starting a business at small level.
However, it does not have legal identity and refers to a person who is solely responsible
for profits and losses of the business. The owner has the absolute right to employ his own
members as workers or hire from outside. The formation process is simple and set-up
cost is also very low.
Advantages:
- Absolute control over the management of business.
- Easy dissolution.
Disadvantages:
- Difficulties in raising funds.
- Unlimited Liabilities. Partnership: It is an agreement between two more people who wish to carry business for
mutual benefits. Operations should be managed by all the partners or any of them, acting
for all. Registration is not compulsory, however, in order to seek legal solution to
disputes (Beatty and et. al., 2018). The profits and losses are distributed among the
partners in the ratio as mentioned in partnership deed.
Advantages:
 The income of partnership is taxed for once only that is also in the hands of
partners.
 Fund raising is comparatively easy.
Disadvantages:
- Partners are held jointly and severally liable for actions of each other.
- Life of a partnership firm is limited to the death of a partner. Company/corporation: It is a legal entity referred to as body corporate registered under
Companies Act, 2006 (Besley, 2015). It is separate from its members having a common
seal and perpetual succession. It can be limited by shares or guarantee or even an
unlimited company. Further, a corporation can sue and be sued in its own name. Also,
the property owned by company is different from assets and properties held by its
members.
Advantages:
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- The liability of shareholders (owner) is limited up to the nominal amount paid or
the amount that has been guaranteed.
- It is very easy to raise funds and for this purpose, it may also, sell its own stock.
Disadvantages:
- Formation procedure is time consuming and expensive as compared to any other
form of business.
- The income of company are generally taxed at higher rates. Limited Liability Company: It is a hybrid business structure that combines the features
of a company and partnership. It provides limited liability characteristics of an entity and
operational flexibility and tax benefits of a partnership. Its life time is decided when all
the formalities and papers of organization are filed (Hanrahan and et. al., 2013). Hence, it
has a date of expiration which can be extended with appropriate number of votes.
Advantages:
- It can be formed by a single person as well as number of people.
- The records keeping formalities and administration are less.
Disadvantages:
- High chances of problems due to very less inference by Acts or rules.
- Higher taxation rates in the hands of members.
P5. Explanation as to management and funding of business organizations
 Sole proprietorship: It is the easiest form of business structure as all the matters will be
decided by the owner. The sole proprietor takes all the decisions ranging from finances,
goods or services to be traded, accounting etc. In case of any loss, he is held personally
liable. It is very difficult to raise funds because it does not have any legal identity. The
best source to finance it through own money and capital as it is not easy to get loan from
branks or Fis.
 Partnership: The partners when sign the deeds undertakes the responsibility to manage
the affairs of the firm. If a partnership firm wants to enter into a contract with an outside
party, then consent of all partners is required. Hence, the authority to take decisions is
with all partners (Terra and Wattèl, 2012). Firms are funded through capitals of partners.
Also, new partners are admitted to meet the increased required in order to achieve goals.
However, there are other sources through which it is funded such as bank loan etc.
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 Company: A company is an artificial person who does not have eyes, ears or brains,
hence, it can not act by itself. In order to manage its affairs, it appoints directors which is
collectively know as board of directors. There is a separate distinction between company
and its members. Further, directors are divided into two categories viz. Executive and
non-executive for managing the day-to-day operations of company. A company is usually
funded by retained earnings which are also the savings of company after paying dividend.
The other ways through which is it funded are debt capital and share capital by issuing
debentures, shares and stocks.
 Limited Liability Company (LLC): Under this structure, each member is considered as
agent and participate in decision-making. Further, managers are appointed to manage its
matters. It is usually funded by short-term financing along with financial companies and
banks.
TASK 4
P6. Legal solution for resolving disputes along with recommendation
Disputes are inevitable, hence, there prompt solution is compulsory. Some of the methods
through which disputes of employees in company can be solved are as follows:
 Negotiation: It is considered as one of the most amicable ways of settling disputes. The
disputes are resolved by undertaking a communication between parties to the dispute.
One person negotiates directly with other one or may appoint an attorney in consultation
with other party. For example, two employees go into verbal spat regarding the
assignment of work within the organizational premises. Then it can be solved through
this method.
 Mediation: It a voluntary process under which a third person in hired who helps in
carrying communication and promotes reconciliation between parties so that they can
reach to a conclusion (Methods for resolving conflicts and disputes, 2015). It is used
when matter cannot be resolved with negotiation. By continuing the above example, one
of a person starts to act in a very violent way, then this way can be use.
 Arbitration: A person called Arbitrator is hired to listen to both the parties and make a
decision. The conclusion so made by arbitrator is of binding nature and treated as final.
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However, it should be fair and just. For examples, a case of absenteeism can be solved
through arbitration. It is a simple, cost-effective and less time consuming method.
 Litigating: Under this, cases are decided by courts on the basis of evidence and various
principles. It is generally used to restrain or compel opposing party to participate in the
solution. For example: an employee has accused his employer for unfair dismissal, then
he can file a case against him.
These are some of the most popular methods which are used to resolve conflicts related
to employment. Before choosing an appropriate solution way, various considerations must be
taken into account such as time, costs, maintaining relationship, enforceability etc. Every
situation is different, hence, methods should be chosen according to situation which will provide
the best solution.
CONCLUSION
From the above report, it has been concluded that business law is necessary for dealings
made in business. These promotes uniformity and legal protection against breach of provisions.
Further, an organization has to comply with many legislations which are applicable to it. Any
contravention of law will make the company face legal consequences which incurs huge costs,
time and there may come situations of winding up. Furthermore, choosing the right business
structure is very important to avail the benefits and minimise risks associated. Along with this,
appropriate resolution method plays an important role for reaching a conclusion which will end
disputes promptly.
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