Business Law Report: UK Legal System and its Impact on Businesses

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ROX: BUSINESS LAW
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Table of Contents
INTRODUCTION...........................................................................................................................3
SCENARIO 1(LO1 AND LO2)......................................................................................................4
NATURE OF LEGAL SYSTEM................................................................................................4
DIFFERENT SOURCES OF LAW.............................................................................................5
ROLE OF GOVERNMENT IN LAWMAKING........................................................................6
APPLICATION OF STATUES..............................................................................................6
EFFICIENCY OF LEGAL SYSTEM EVALUATION AND RECENT PROGRESS...............7
IMPACT OF DIFFERENT LAWS ON BUSINESS...................................................................8
DIFFERENCE BETWEEN LEGISLATION, REGULATION AND STANDARD..................9
SCENARIO 2(LO3 AND LO4)....................................................................................................11
FORMATION OF BUSINESS ORGANIZATIONS (LEGAL FRAMEWORK)....................11
MANAGEMENT AND FUNDING OF BO.............................................................................14
EVALUATION OF ADVANTAGES AND DISADVANTAGES OF THE FORMATION OF
BUSINESS................................................................................................................................15
BUSINESS DISPUTES AND RANGE OF SOLUTIONS.......................................................17
LEGAL MODE OF DISPUTE RESOLUTION....................................................................18
COMPARISON OF SOURCES OF LEGAL ADVICE............................................................19
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................21
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INTRODUCTION
This report focuses on the legal system of the UK and its impact on business (manufacturer,
consumers). It also focuses on the potential impact of the law on business and formations of
different types of business organizations. In the end, after the in-depth analysis of the legal
system, few recommendations are provided to improve the present system. The legal system is
the processes, methods, and procedures for inferring and enforcing laws. It gives details of the
rights, duties, and responsibility of individuals. It derives its authority from the constitution that
is law of the land; some nations have codified constitution and some have a non-codified
constitution.
A constitution is the law of the land has each law derives its legitimacy from it. Every public or
private structure has a defined structure, authorities, functions, and responsibility in it. The legal
system is comprised of common laws, and civil law, statutory law and religious law. Business
laws are part of the civil law. Complete processes, functions, operation of the business are
demarcated in the business laws and if any business unit breaches the law, strict actions can be
taken against it. These provisions can be punitive and impose monetary charges on the business.
The business units of the UK are regulated by European Union laws as well as laws of the
government of the UK. They are also regulated by legal standards, regulations (Schütze, 2015).
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SCENARIO 1(LO1 AND LO2)
Being a legal practitioner has been assigned the task to provide effective legal advice to the
companies of the UK and ease their doing of business.
NATURE OF LEGAL SYSTEM
The legal system is comprised of common laws, and civil law, statutory law and religious law.
Business laws are part of the civil law. Comprehensive processes, functions, operation of the
business are defined in the business laws and if any business unit breaches the law, penalty
provisions are also there. These provisions can be punitive and impose monetary charges on the
business and can be rigorous at times. The business units of the UK are regulated by European
Union laws as well as laws of the government of the UK. They are also regulated by legal
standards, regulations (Bacon, 2017).
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DIFFERENT SOURCES OF LAW
Laws of the land derive their legality from different sources and they can be people in
democracies, religious principles in case of the monarchy. Source of the law is the entity that
supports the existence of the law. In the UK, the laws that are in practice are European Union
law, common law and legislation of the parliament of the UK (Bacon, 2017).
The legislation is also called laws of the parliament, legislated by the parliament and it is
followed by the wide-ranging discussion in the parliament about each provision of laws, its
effectiveness to solve emerging problems and the ability to offer effective solutions. Both the
houses of parliament provide their consent and then the law receives the assent of the head of the
State. Meanwhile, it is also put for public discourse to make effective changes in it, for instance,
Human Rights Act, Companies Act, Consumer Protection Act, etc. to ensure the hassle-free
working of companies and also to protect the rights of individuals (Banks,2015).
European Union laws are also called regulation of the EU that put into practice due to the
enforcement of EU treaties. These are trade-related laws, trade treaties, consumer protection, and
laws to avoid discriminatory treatment to the products of other countries.
EU convention on HR is in force to protect the rights of individuals and also to take punitive
actions if they are violated in doing business or in general. The HR act mentions many actions
that can be taken against the culprit. Implementations of the EU convention on human rights also
prevent any corrupt practice in the supply chain and eliminate the outbreak of modern forms of
slavery (Kim, and Ozkan, 2016).
EU non-discriminatory law eliminates the discriminatory practices in the business and ensures
the protection of domestic goods as well as exports. It protects local markets and local
manufactures.
Common laws are laws of parliament of Britain, Scotland to ensure order in the society and
offer an effective framework for the business. These laws derive their legality form Magna Carta
and other earlier laws. Companies Act, consumer protection act, labor acts are the example of
common laws, their potential impact is of them on the business and consumers (Banks, 2015).
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ROLE OF GOVERNMENT IN LAWMAKING
The role of government plays a significant role in the formulation of legal structure. In any type
of administration, legislature, executive and judiciary are organs of the government. The
legislature is responsible for the formulation of the laws, rules, and regulations; Judiciary is
responsible for the interpretation of the laws, rules and regulations and the executive is
responsible for the enforcement of the laws, rules, and regulations. Executives provide
suggestions to the parliament for the formulation of new laws and legislature can ask for
effective enforcement of laws (Schütze, 2015).
After receiving a proposal, government parliament formulates bills; these are passed by both the
houses of parliament with simple, effective and special majority depends on the type of
legislation and then, it receives the assent of Head of the State and put into the practice. Process
of making law differ for counties but in each country, government participates actively in the
formulation of laws as it is being the political representative of the people interact directly with
the society and provides valuable suggestion to reform the process of lawmaking.
APPLICATION OF STATUES
Laws are enforced by the executives for achieving some objective and they are regulated by
them also but the validity of their provisions is assessed by the judiciary in the court. It evaluates
complete law according to the need of the case and suggests relevant changes or sometimes also
provides different meanings to the existing acts in order to improve the efficiency of laws and
regulatory agencies. Laws and the rules are enforced by agencies of the government and their
effective regulation is also ensured by them in order to improve the legal system of the UK (Kim,
and Ozkan, 2016).
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EFFICIENCY OF LEGAL SYSTEM EVALUATION AND RECENT PROGRESS
The efficiency of the legal system can be measured in terms of its ability to reduce the problem
for that it was formulated, its stability and acceptance by society. Reforms in the system are
necessary to increase the efficiency and productiveness of the system. List of reforms are
undertaken in the legal system in recent years and these are:
An alternative dispute resolution mechanism is devised by the government of the UK to reduce
the burden on the judiciary and also to ensure the fast delivery of justice or resolution of the
disputing between the parties (Banks, 2015).
Consumer courts are statutory bodies and derive their legality form the Consumer Acts. They are
constituted to protect the rights of the consumers and provide necessary compensation in case of
violation of their rights. Compensation is also provided for the damage endured by them.
Companies Act (Amendment) is done to improve the quality and effectiveness of the doing
business and protect the rights of both employees and employers and support them for any lose.
This act provides a complete guideline for the organizations of different size (Company Act,
2019).
Legal advice is supported by the legal rights advocacy group to offer free and fair legal
consultants to those who cannot afford it due to lack of money. It is a very significant move to
ensure free, just and fair legal standing for all.
Crime agencies the formulation of crime agencies and network of criminals is proposed to ensure
preparation of database to identify suspicious elements in the society and also to protect society
in general from the outbreak potential crime in future.
These are the reforms that are undertaken from the year 2005-2015 to in order to reform the
system and increase its efficiency and productivity and yield desired results for consumers.
Reforming the system is necessary to ensure the productivity of the system (Bunn, 2015)
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IMPACT OF DIFFERENT LAWS ON BUSINESS
Companies Act, Contract Act, and employment Act have immense potential to affect the
functioning of business and these acts have defined various provisions for performing business
activities and these provisions can be punitive and impose monetary charges on the business and
can be rigorous at times. The business units of the UK are regulated by European Union laws as
well as laws of the government of the UK. They are also regulated by legal standards,
regulations.
Companies Act, 2006, is formulated to meet the structural, functional and organizational needs
of the organization and also to ensure the protection of the rights of the consumers, workers, and
employers. This act is amended to add some more provisions due to the dynamic nature of the
business. This act ensures the fulfillment of CSR and efficient CG to meet the objectives of the
organization (Company Act, 2019).
Contract law, 1994, is formulated to define the contract, its characteristics and objectives and it is
defined as a mutual agreement between different parties for doing business along and sharing of
profits, obligations. It is also enforced to protect both the parties form potential damage in case
of breach of some provision. One party can demand monetary compensation in case of breach by
the other party (Bunn, 2015)
Employment law formulates to define the rights, responsibility, duties, and functions of
employees and employers and working conditions, health and safety at the workplace and non-
discrimination of employees at the workplace, creation of the inclusive environment. It also
recommends the constitution of women safety cells and equal treatment to all employees.
These are the acts that impact the businesses directly or indirectly and also ensure efficient
performance of the business, fast resolution of disputes and effective management of conflicts if
any. They have a positive impact on meeting the gaps, protecting rights and fast delivery of
justice to the concerning parties. Other than them, consumer protection act and labor laws are
there that affect doing the business to some extent and has potential to affect the decision
making, and policy formulation of the business (Bunn, 2015)
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DIFFERENCE BETWEEN LEGISLATION, REGULATION, AND STANDARD
Legislation is also called laws of the parliament, legislated by the parliament and it is followed
by the wide-ranging discussion in the parliament about each provision of laws, its effectiveness
to solve emerging problems and the ability to offer effective solutions and the example of
legislation are Human Rights Act, Companies Act, Consumer Protection Act etc. to ensure
hassle-free working of companies and also to protect rights of individuals.
Regulation is a government document that contains guidelines regarding the product quality,
ingredients, production method, safety standards, procurement method, etc. they do not require
the consensus of the board of directors. It is compulsory for any organization to ensure
implement its production, delivery methods (Eschen et al., 2015).
Standard is a document that is accepted by the consensus and this document has a list of
frequently used rules and guidelines. It is not mandatory to follow and it contains information on
labels, trademarks, etc. this document is used to ensure the compliance of rules and regulations.
Legislation Regulation Standard
The legislation is also called the
laws of the parliament, legislated
by the parliament and is
approved by the president or
governor and then they become
an act.
Regulations are the
comprehensive guidelines that
contain guidelines regarding
product quality, ingredients,
production method, safety
standards, procurement method,
etc.
Standard is a document that is
accepted by the consensus and
this document has a list of
frequently used rules and
guidelines to ensure the
quality of business.
It ensures rule by law in every
spectrum of business and
order in society.
They are formulated after the
law by the bureaucrats and
they are for the practical
implementation of the law.
They are used to ensure
steadiness and quality across
all spectrums.
Obedience to the laws is
obligatory for all
Obedience to the regulation
not obligatory for all
Obedience to the standards is
obligatory for all
The policymakers legislate
and ratify commandments.
Federal entities drafts
regulations.
Development organizations
formulate standards.
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They are implemented by
government bodies and public
agencies.
They are imposed by the
public agencies and
regulations are self-regulatory
also.
They are enforced by the
development agencies.
Consumer Protection Act,
labor laws, etc. are instances
of legislation.
Safety at workplace
regulations, food safety
regulations are instances of the
regulations.
The general duty clause in
regulations is a kind of
standard.
They originate their influence
from the Act
They originate their influence
form a definite part of a law
They are a portion of regulations
Eschen et al., 2015).
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SCENARIO 2(LO3 AND LO4)
A line manager in the organization has asked for the legal advice related to the formation of the
company and other types of business, type of funding available, and mechanism to resolve the
dispute if arises.
FORMATION OF BUSINESS ORGANIZATIONS (LEGAL FRAMEWORK)
Business organizations can be defined as the organization that engages themselves in commercial
activities with the aim to earn profit and expand the business to meet the need of the large
consumer base.
Business organizations can be divided into the following categories
Description Sole proprietorship Partnership Company
Structure In this type of business,
all the business
operations are
managed by the owner
of the business and he
has the accountability
for the business
operations (Anastasia,
2015).
In this type of business,
all the business
operations are
managed by the
business partner and
they are collectively
accountable to manage
the business operations
(
The company is a
legal entity and it is
managed by the board
of directors and other
stakeholders as per
the company act.
Formation To start a business,
minimum capital and
compliance with legal
norms are required.
To start a business, in
partnership to achieve
the same business
objectives, both the
parties are
To create a company,
there is a requirement
of a certificate of
incorporation. It is
crucial as it is
mentioned in
company law.
Registration It is not compulsory
for the business owner
It the decision of
business partners to
It is compulsory for
business organizations
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to get his business
registered as per the
government norms
decide terms and
conditions to get their
business registered as
per the norms of the
company.
to get registered and
take the certification
to open the company
by following legal
norms.
Management The management of the
business is handled by
the business owner and
he is the sole authority
to make decisions for
his organization (Singer,
2018).
The management of
the business is
handled by the
business owners or
partners of the
business and both the
partner take decisions
for the business as per
their understanding
The management of
the business is
handled by the board
of directors,
managers, and human
resource managers
and in the company,
the tasks to manage
the business are
divided according to
the provision of the
company act
Borrowing power In the sole
proprietorship, capital
is borrowed from the
acquaintance as per
the defined
provisions.
In the partnership,
business capital is
borrowed from the
acquaintance, as debt
and also forms the
market. And this is as
per the defined
provisions (Bench-
Capon, 2015).
In the company,
capital is borrowed
from the market,
shareholders, as debt
and equity as per the
defined provisions of
company act.
Liability The liability, in this case,
is unlimited and the
property and resources
of the organization can
be sold off in case of
The liability, in this
case, is limited and
unlimited depends on
the business scenario
and the agreement
The liability, in this
case, is borne by the
shareholders and the
owners according to
the debt liability.
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