Business Law in the UK: An Analysis of Legal Frameworks

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Unit 7 Business Law
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Table of Contents
Introduction................................................................................................................. 3
SECTION 1................................................................................................................. 4
TASK 1........................................................................................................................4
Sovereignty of Parliament and sources of UK laws.................................................4
Law-making process by the government and application of common and statutory
laws......................................................................................................................... 5
Figure: 1 Passage of a bill through Parliament........................................................6
Application of statutory laws in courts......................................................................7
Application of common law in courts.......................................................................7
Impact of company law, employment law and contract law on businesses in UK. . .7
Difference between legislation, regulation and standard.........................................8
TASK 2......................................................................................................................10
Types of business organisations in UK..................................................................10
Difference between incorporated and unincorporated business............................12
Advantages and disadvantages of partnership firm and limited company.............14
SECTION 2............................................................................................................... 16
CASE 1..................................................................................................................... 16
Appropriate Legal solutions to Champion Ltd........................................................16
CASE 2..................................................................................................................... 17
Legal solutions for dispute between Mr. Anderson and Amber Ltd.......................17
Conclusion................................................................................................................ 19
References................................................................................................................20
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Introduction
The corporations in the United Kingdom are at a mandatory obligation to abide by a
wide business law rules and regulations which are in force in the region. These
business law provides provisions regarding the registration and incorporation of the
companies operating. It also contains provisions for the protection of intellectual
property like patent and trademarks. Further the laws protect the health and safety of
the employees by providing for safety measures and standards.
Hence this report is drafted in relation to provide explanation regarding the different
cases given in the scenario. The report deals with the nature of the legal system of
UK including the sources of law and government in law making. Further the report
emphasises the structures of business organisations which can be operated in the
UK and also its management and funding. At last the report provides the various
legal solutions in option with the corporations in order to resolve their corporate
disputes highlighting particularly the alternate modes of dispute resolution. Hence,
the report shall serve as a piece of comparative study of business law enforced in
the UK.
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SECTION 1
TASK 1
Sovereignty of Parliament and sources of UK laws
The sovereignty of Parliament is considered as the principle of the UK constitution.
By virtue of this the Parliament is the supreme authority in the UK which is
empowered to make or end any law which is inconsistent with the UK legal
principles. The UK does not have a single written constitution like the US but the UK
law is completely on the Acts passed by the Parliament and judgments given by the
courts. Hence, it is settled fact that the supreme law-making body is the UK
parliament which enjoys extensive sovereignty in the land.
The UK law is the result of the exercise of parliament’s authority in the law-making
process. The UK law is derived from two main sources namely the primary sources
and the secondary sources.
The primary sources include:
1. The Acts of Parliament:
 These laws include the statutory laws i.e. the Acts which the parliament
pass by getting approved by both the Houses.
 These laws are considered as the most reliable sources of law as they
are framed by the official bodies.
 The courts at first priority depends on these laws for its judgments
(Kaczorowska, 2012).
2. Delegated legislation:
 The parliament gives authority to other bodies to draft laws under
delegated legislation.
 These are also considered as the reliable sources of law as they are
also passed by authorised bodies under the direction of the Parliament.
3. The judgments of courts:
 The judgment of courts is called as the common law.
 In case there is absence of statutory provisions or there is question
arising regarding the language or interpretation of statutory law, the
court depends on previous judgments for decision making.
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4. The European Union law:
 The directives issued by the EU is automatically applicable to the
member states.
 Since the UK is the member state of the European Union, all the
directives, laws and regulations are mandatorily applied on the United
Kingdom.
The secondary sources include:
 The opinions of expert: The opinions given by law experts and jurist is also
considered a source of law as it contains citations to primary sources of law.
 Law reviews: These are also a source of law as reviews regarding the
applicability and constitutionality of the prescribed provision is given
consideration.
 Treaties entered by the government: The treaties are also a source of law
as they contain the extent and scope regarding the applicability of
international law (Kaczorowska, 2012).
Law-making process by the government and application of common and
statutory laws
The Parliament in UK is considered as the supreme body of the land which is
empowered to draft and end laws. The UK follows a prescribed procedure for law
making in which at first the bill is introduced in the parliament and is approved by
both the houses with majority (Civilservant, 2019). At last the bill has to get royal
assent that is the queen’s signatory in order to become a law.
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Figure: 1 Passage of a bill through Parliament
(Source: Civilservant, 2019)
Application of statutory laws in courts
 The statutory laws are considered as the foremost sources of law as they are
passed by the supreme authority of the region that is the parliament.
 They are in form of codified statute, Acts or codes which is interpreted by the
courts for the delivery of fair and impartial judgment.
 Statutes are made applicable in the court at first priority as the parliament has
prescribed the way in which the statutes shall be made applicable along with
the extent of its applicability (Dixon, 2013).
 Hence, the statutes are the prime concern of the judges and the presiding
officers while giving judgments.
Application of common law in courts
 The common law serves as judicial precedents as it is the judgments of the
courts which serves as source of law when there is question regarding the
applicability or reliability of the statutory laws.
 These judicial precedents are binding on lower courts for future decisions on
cases under the same circumstances.
 Hence, the common law also serves as a source of law in the absence of
statutory laws and its applicability is seen in UK courts (Dixon, 2013).
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Impact of company law, employment law and contract law on businesses in
UK
The establishment of corporations in the United Kingdom are subjected to the legal
structure and framework operating in the region (Craig and Campbell, 2012). The
legal structure comprises of the employment laws, company law and the contract law
which is to be compulsorily followed by the corporations working in the UK.
Company law
The corporations operating in the UK are subjected to the provisions of the UK’s
Companies Act 2006 which is the statutory legislation enforced in the region (Lipton,
et. al., 2014). The companies of the UK are required to get its name registered and
incorporated under Section 7 of the Companies Act 2006. Under Section 14 of the
Act if the registrar is satisfied that the requirements of the provisions are fulfilled, he
shall proceed with the registration of the documents.
Employment law
The UK employment law is governed under various Acts among which the major
ones includes the National Minimum Wage Act 1998. This Act provides for the
payment of minimum wage to the employees working in the company. The minimum
wage is prescribed to be paid as per the age of the employee. The employees above
the age of 25 shall be paid £7.83 as per the provisions if the Act ( Barnard, 2012).
Further the companies shall also be subjected to the provisions for the Working Time
Regulations 1998 which give the right to the employees to get paid holidays of 28
days, break from work, and regulate the excessive long working hours.
Contract laws
The contract law in UK is governed by certain basic principles which includes the
enforcement of a contract and obligations which arise after the contract is formed.
The formation of a contract includes three main principles in the UK which are
agreement, intention and consideration. The agreement shall come into existence
when one party offers and the other accepts. Hence, offer and acceptance is also
considered as an essential of a valid contract (Poole, 2016).
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Difference between legislation, regulation and standard
The difference between legislation, regulation and standard can be understood
through the following chart:
Legislation Regulation Standard
o Legislation are the
enacted laws by the
Parliament.
o Regulations are the
enacted method for
the implementation of
the legislation.
o Standards are the
accredited and
approved way of
dealing with a
particular issue.
o Legislations are the
primary source of law.
o Regulations are the
sources for the
application of the
legislation
(Safetylineloneworker,
2019).
o Standards are not a
source of law but it is
the officially permitted
norms for the exercise
of powers.
o Legislations includes
the permitted or
omitted behaviour the
public is required to
maintain.
o Regulations includes
the procedure by
which the legislation
shall be applied.
o Standards includes
the permitted norms
which are required to
be followed by the
corporations like the
safety measures,
environment
protection, etc.
o Legislations are
codified laws which
requires publication.
o Regulations are also
codified laws but there
is no publication done.
o Standards are also
codified norms whose
publication is required
among the internal
management of the
company
(Safetylineloneworker,
2019).
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Hence the corporations shall be at a mandatory obligation to follow the legislation
like the Companies Act 2006. Further the regulations for the applicability of the Act
shall also be applied on the corporation operating in the UK. Along with this the
corporation shall be required to publish standard of care taken to be published within
its internal articles (Talbot, 2015).
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TASK 2
As per the facts of the case provided the JPM Publishing is a partnership firm
established by three partners Jane, Penny and Marie. They now wish to expand their
business and have been advised by their accountant to expand as a limited
company. Hence, the following is the description of different types of business
organisations which can be formed in United Kingdom.
Types of business organisations in UK
The JPM Publishing can expand its business under the following types:
1. Sole trading company:
 The sole traders are the individual owners of the company.
 They are required to get themselves registered as sole traders with Her
Majesty’s Revenue and Customs.
 They are personally liable for all the debts and payments of the
company.
 They are the sole decision makers of their business and responsible for
tax payments.
 Sole traders can also hire employees on their own for their assistance
to do work for them.
2. Partners in business firms:
 In a partnership firm the partners personally share responsibility for the
profits and losses of the business.
 The partners are required to get their business firm registered under
the HM Revenue and Custom.
 The partnership business is governed under the provisions of the
Partnership Act 1890.
 They are also responsible and liable for the purchases they make in
the firm name like the stock or equipment.
 They are liable to pay taxes on their share and profits.
 Partners and firm are not considered as a legal person unlike a limited
company.
3. Limited company:
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 The limited companies are considered as a legal person and comprises
of a separate legal entity who can function as a separate company as
well as in partnership.
 The limited companies in UK are governed under the provisions of the
Companies Act 2006.
 The limited company need to get its documents registered under
Section 9 of the Act.
 On the completion of the registration requirements, the registrar shall
provide the company with the certificate of incorporation and the
company shall stand registered under the Act.
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Difference between incorporated and unincorporated business
Before the JPM Publishing proceeds with its expansion, the members and partners
of the firm need to get acquainted with the difference between an incorporated and
an unincorporated company.
Hence the following is the description for the same:
BASIS OF
COMPARISON
INCORPORATED UNINCORPORATED
LEGAL
PERSONALITY
 An incorporated company
has separate entity from
its members.
 An unincorporated
company are mostly
sole traders and
partnership firms.
NATURAL RIGHTS  Incorporated companies
have natural rights and
distinct personality not
relying on its members.
 Unincorporated
companies do not
enjoy such natural
rights.
LIABILITIES  Members in this business
structure are not
personally liable for the
debts of the company.
 Sole traders and
partners are
personally liable for
the debts of their
business.
TAX RATES  This business is subjected
to corporate tax at fixed
rate.
 This business is
subjected to
individual tax rates.
MANAGEMENT  This business structure is
managed by means of two
different structure:
o Management by
member:
 In this
structure the
day to day
 Sole proprietorship:
o This business
type is
managed by
the only owner
of the
company.
o He shall be the
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