Business Law: Impact of Company, Employment & Contract Law on Business

This assignment provides a comprehensive overview of business law in the United Kingdom. It begins by explaining the different sources of law, including primary sources like legislation and judicial precedents, and secondary sources such as legal interpretations by experts. It then discusses the role of the UK government in law-making, detailing the legislative process from bill introduction to royal assent. The essay further illustrates the potential impact of company, employment, and contract law on businesses, highlighting the importance of legal compliance. The report section evaluates how different types of business organizations are legally formed, managed, and funded, comparing sources of legal advice and support for dispute resolution. Finally, it analyzes the advantages and disadvantages of various business organization structures. The assignment emphasizes the significance of understanding and adhering to legal frameworks for businesses operating in the UK.

BUSINESS LAW

Contents
INTRODUCTION...........................................................................................................................1
TASK 1 (ESSAY)............................................................................................................................2
P1 – Explain different sources of law..........................................................................................2
P2- Explain the role of government in law making and how statutory and common law is
applied in the justice courts. ........................................................................................................3
P3- With the help of examples, illustrate how company, employment and contract law has put
potential impact on business........................................................................................................4
M1- Evaluate the effectiveness of the legal system in terms of recent reforms and
developments. .............................................................................................................................5
M2 – Analyse the potential impact on business through differentiation between legislation,
regulations and standards. ...........................................................................................................5
TASK 2 ( Report).............................................................................................................................6
P4 – Evaluate how different types of business organisation are legally formed. .......................6
P5 – Explain how businesses organisation are managed and funded..........................................7
P6 / M4 – Compare and contrast different sources of legal advice and support for dispute
resolution to make appropriate recommendation to legal solutions............................................8
M3 – Analyses the advantages and disadvantages of the formation of different types of
business organisation...................................................................................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................10

INTRODUCTION
Laws are the set of rules and regulations which govern the behaviour of the human
beings. In all the sectors and in all the fields there should be some laws which take the
responsibilities to show them a path of legality. Similarly business sector is very vast and wide
which contains many activities and may legal formalities which have to be fulfilled by all the
business organisations. Business law is the legal framework which provide various rights and
impose several duties on all the business organisation's in regard to run the businesses in a legal
manner. The country like United Kingdom which is the most popular territory around the world
for doing businesses. The reason behind this is the proper regulating the laws and particularly
enactment of laws which support the business organisation in various areas like; it provides the
legal process to establish the business, rules and regulations to run the businesses, tax policies in
regard to pay, sources of raising fund by the companies and at the time of winding up the
company the particular act gives the legal direction to follow. That particular act in the United
Kingdom which regulates all the activities of the business organisations is the Company Act,
2006. the act contains 1300 sections and 16 schedules which store all the information and the
rules which is required while doing business. This act solve the problem of business
organisations and give a open space to every organisation to do business in the limit of the
company act (Al Hosani, Yousef, Al Shouq, Iqbal, and Mouheb, 2019). In UK various types of
business structures are running all have different structures and different features and for all of
them in the company act there are some provisions which deal with all of them. The company
act is the main law which provides the guidelines regarding the business rules but there is not
only company act which put influences on businesses there are some other acts also which has a
influential effects on businesses such as; Employment act, Contract act. The above assessment is
divided into two parts, the first part has to get cover in the format of essay which discuss the
various topics like; different sources of law, role of UK government in law making, impact of
certain laws such as; contract act, employment act and the company act on business. The another
part which has to be done in the format of report and cover the topic like; legal process of
forming the different business structures, different sources of business funding and in the last it
covers the advantages & disadvantages of difference types of business structures.

TASK 1 (ESSAY)
P1 – Explain different sources of law.
Law making is a very crucial task which has to be perform by the governmental
authorities only. In UK there is a democratic form of governance which means the power of
imposing restrictions and providing the rights are the functioning area of the UK government
only. The whole United Kingdom is divided into three different jurisdictions i.e. England &
Wales, Scotland and the Northern Ireland. These three different jurisdictions have their own
laws, courts and the different legal system but, there is a common highest court where all the
final appeal goes i.e. the Supreme Court which is situated in England. There is only one law
making authority which is parliament and the one process which is legislation. The sources of
laws are classified into two parts which is Primary source of law and the Secondary source of
law.
Primary Sources of Law- Laws are enacted for the public therefore it is necessary to have the
contribution of people in law making process. The primary source of law is the legislation
process of UK which is performed by the UK parliament. The Parliament consist of two houses
in which one house known as House of Commons in which the members who ere sitting got
elected by the UK citizens and they are the representatives of the UK people. Another house
which is known as House of Lords, in this house all the ministers elected by the members of the
House of Commons sits. These two houses have the power of dealing with bills and with the
majority send it to the Monarch who is the Queen of England (Calabrese, Cowling, and Liu,
2022).
There is another primary source of laws which is known as Judicial precedents and in layman
language it can be said as case laws. These are not the proper laws like the laws made by the
legislation, these are the judgement's of the Supreme Court and the High Court which bound all
the subordinate courts to follow their judgement's as laws but only in the similar type of matter.
There are some cases which contains same facts and in which same principles of laws would
apply in those matters the judgement's of the Supreme Court and even the High Court can be use
without the process of litigation.
Secondary Sources of Law- In these sources those interpretation would be considerer as laws
which are mentioned in the written books and articles by the retired judges of the Supreme Court

or the High Court. They are the experts of laws and to provide help in some areas of laws they
give their opinion and those opinion were used as laws in certain point of time and situation.
P2- Explain the role of government in law making and how statutory and common law is
applied in the justice courts.
The government of UK plays crucial role in making and framing the laws for the whole
State. In government there is a body known as parliament which performs all the functions of
making the laws, it consist of two houses or in the common language it can be said the two
department which have the power given by the UK government in regard to making laws. The
process of making laws got start when any bill got introduced in the parliament to become a law.
That bill has to pass some stages where it would be verified and amended done by these two
houses of the parliament. The stages through which all the bills have to get pass are discussed
below;
 First Reading- This stage just perform some formalities in which the bill got arrived in
the House of Lords. In this stage name of the bill got read in the chamber.
 Second reading- In this stage main areas of bill got debated by the members in which
they think some changes may be required and no votes has been conducted for this
purpose.
 Committee Stage- In this stage any member can take part to do the amendments, in this
stage bill got verified from the start to the end and with the help of voting they decide
whether more amendments can be done or not (De Lacy, 2013).
 Report Stage- In this stage more verification would be done on bill to find out the areas
where some amendments can be made and vote will decide whether more changes can be
made or not.
 Third reading- In this stage bill got tied up and the last opportunity will be given to find
any loophole and do amendments in the bill.
 Consideration of amendments- If some changes are made by the House of Lords then
will be send to House of Common to agree, Commons may accept the changes made by
the Lords, can make their own changes or can reject the changes made. The changes
made by the Commons send it to the Lords, this cycle of doing changes in the bill goes
on till it got cleared with the majority and this cycle is known as Ping Pong.

 Royal assent- when both the houses agreed on some point of the bill with the majority
then, bill has been send for the approval by the Monarch and by getting the assent the bill
becomes a law or “Act of Parliament”.
P3- With the help of examples, illustrate how company, employment and contract law has put
potential impact on business.
Business is a wide concept which is more typical to understand, because it includes various
factors, the major factors of business are classified into two categories external and internal.
Business is an arrangement which is organised to earn profit by commercialising things in the
form of products. A business is a formation of various activities and functions which keeps a
business operative, it consists of various departments which are associated with one another in
order to keep business running. A well organised business is based on the legal foundations and
models which gives it a legal status. It is important foe a business to meet all the legal
requirements established by law in order to prevent itself from any legal challenges. The
company Act was enacted to establish legal requirements for the formation of new corporations
and provides essentials which a company may require at times of incorporation. It also provides
types of corporations with different requirements along with their merits and demerits. The other
Act which plays crucial role for maintaining the functionality of an organisation is the Contract
Act. Contract act is an agreement which if fulfils all the legal essentials of valid contract shall be
enforceable at law and the parties to contract are legally bind towards each other. In the same
way, companies can also form a contract and can make liable for their actions. Employment is
another statute which with the aim to protect the interest of the employees by imposing statutory
duties and responsibilities on employer (Deakin, 1986).
Employment law: It is an statute passed by the parliament for the protection of employees who
are working in business corporations, from the first instance it can be said that this statute
favours employees more than employer. It was seen that employees are being badly exploited at
work place and were kept deprived of basic needs and were not even treated fairly. The
government then decides to counter this issues by creating a law on employment with the view to
protect each employees from all the issues and challenges. In present context, the employees of
United Kingdom , are entrusted with several statutory rights and benefits under employment. The
employer statutory bound to ensure that all its employees are given all the benefits and privileges
which is established and guaranteed by law. Benefits like, leave allowance, paternity and

maternity, vacation, minimum wages, bonus, extra pay for extra work and many more. Further
the employees are protected against any form of discrimination, unfair dismissal and against the
arbitrary action of an employer.
Law of Contract- It is the another statute passed by the parliament which has some influences
on business activities. Generally parties came into an agreement or frame contract to get the
surety of performing the duty or get the amount in regard to fulfil the obligations of performing
some duty. In the businesses where many transactions are taken place and many deals were
conducted between the organisation's. To get the surety of completing the task and to receive the
amount of consideration the business organisations make a contract to bound each other. Even at
the time of appointing the employee's the contract has been made between the company and the
employee which bound both of them (Gstöhl, and Phinnemore, 2021).
Company Act- This act has a great influence on businesses because it is the main law which
regulates the business activities and provides the guideline to all the organisations in regard to
perform such activities in business which are prescribed in the act and all the companies of the
UK has to comply with the act.
M1- Evaluate the effectiveness of the legal system in terms of recent reforms and
developments.
There is a direct impact of every new reforms or the development made to the legal
system and to analyse that impact there is a particular designed statutory body made by the
government known as Law Commission. This body was established to take care of all the
existing and the new laws. It came into existence in the year of 1965 and since than it performs
its duty to check all the laws of UK. The main motive of this body is to study all the areas of
laws and try to make it simple and cost effective. Commission sent the changes made by it to the
parliament and its up to the parliament to to bring that changes or to reject it. Some changes are
made in some areas of laws like; in the jurisdiction system of courts, concept of contempt of
court and also in family law.
M2 – Analyse the potential impact on business through differentiation between legislation,
regulations and standards.
Legislation, regulations and the standards are three different terms but have same area to
cover which is law. At first legislation which is the only functioning body which has the power
of making laws with the help of two houses of the parliament i.e. House of common and House

of Lords. After making the laws it is necessary to control all the laws, this procedure of
controlling or implementation of laws are known as regulations. After implementation was done
it is necessary to provide them to all the people to whom the laws are made.
TASK 2 ( Report)
P4 – Evaluate how different types of business organisation are legally formed.
Doing business is easy but its really difficult to maintain all the business activities, it is
mandatory to run the business in legal manner. For that it is essential to be aware about all the
legal obligations and run business in the light of laws only. If any organisation failed to run the
business under the laws then, that company has to pay the penalty. In business sector there are
various types of business structure which carries different features and different way to make the
company legal.
Sole Proprietorship
It is the average form of business structure as there are many people who engage themselves in
such type of businesses because lack of fund. It has a simple structure and also it didn't carries
high administration responsibilities (Hosein, 2004). Therefore there is only one person who is the
owner of the company and that person alone control all the business activities. To make the
company legalised it should be get registered at HMRC for the self-assessment tax return also.
Partnership
This is another form of business structure which also has simple characteristics and structure. As
a word suggest itself there are some partners in the company who are the owners of the company.
Together they are responsible for all the business obligations and liabilities of the company. In
the starting of the business each partner bring their share capital and they become the owner of
that share in the company. The company got the legal identity after registration at Companies
House.
Limited Liability Partnership
This business structure is very similar to the general partnership form of business, the only
difference is this structure allow more partners than the general partnership. The company got
registered at Companies House only.

Limited Company
This is the most complex form of business structure which carries many administration
responsibilities to perform. As it has a complex structure for that reason there are some board of
Directors who take care of all the internal and external factors which affects the business
activities. These are the large scale companies with many obligations and it is necessary to
registered the company at Companies House and also got informed to HMRC.
P5 – Explain how businesses organisation are managed and funded.
Businesses help the people to know about the environment of trading and through this
people learn many strategies and methods to carries the business legally. The main motive which
every person take while doing business is to earn more and more profit. But, there is a famous
quote for the business is “ to earn the money we have to invest the money first”. Business can
only get run smoothly and successfully when the company has no issues in raising fund. The
different business structures has uses different sources of raising fund as per their position in the
business market (Kamal, Qayyum, Mathavan, and Zafar, 2017).
Sole Proprietorship
Such type of business structure which carried by the single owner and all the responsibilities,
obligations and rights were deal by the owner only. There is no one in this type of business
structure who helps the owner in his bad time. However, it doesn't carried high administration
responsibilities and even don't need large amount of fund to run the business company. There is
no such expenses which demands high amount of fund. The sources of fund which are available
for the sole proprietor are; bank loan which offers best interest rate, can borrow money from
relatives, family or friends.
Partnership
As the name suggest itself that, this is the business structure which carries not by the single
owner but there can be more than one owner who will be the partner in ownership of the
company. At the starting of the business the partners bring their own share and that share will
decide their share of ownership in the company. Partners can raise fund through bonds,
crowdfunding and also take loan from the bank.
Limited Company
This business structure is the real businesses which carries their businesses all over the country
and depend on the fund availability these companies will also deal across the countries. The

company due to complex structure and many administration responsibilities there are some board
of directors who are responsible to manage the business activities and also for raising funds. This
company has its own way to raise fund, the company at the need of fund they invite people from
the public to purchase their shares and become the member of the company (Macfarlane, and
Ottewill, 2004).
P6 / M4 – Compare and contrast different sources of legal advice and support for dispute
resolution to make appropriate recommendation to legal solutions.
Every person has a knowledge about the place where they got the remedy against the
losses or damages which is the court. If any dispute was happened between any person they
brought their matter in court and plead for remedies. But apart from the court system there are
some places or method available by which justice can be received. This can be clear by some
scenario given below;
Case Scenario 1
Legal issue- Is it justifiable to demand claim by workers from their employer's?
Legal solution- In the issues of claims where parties need some advice for that, negotiation is
the best way to solve the dispute mutually.
Justification- Negotiation is the process of solving the dispute with the help of negotiator who
will be appointed by the parties only. Negotiator after heard both the parties passed an advice
which is up on the parties to solve the matter on that basis or not.
Case Scenario 2
Legal issue- The charges asked from Janet to provide the service including phone line charges is
justifiable or not?
Legal solution- Mediation is the another process in which one mediator is appointed to heard the
parties and with mutual understanding passed an advice.
Justification- In mediation parties went when they have to decide the point where both the
parties will agree to pay or to received the amount and settle the dispute (McKendrick, and Liu,
2015).
Case Scenario 3
Legal Issue- Is the application is maintainable or not for the purpose of winding up by one of the
company creditors.

Legal Solution- In the purview of Black-Horse company, arbitration is the best method to solve
the dispute.
Justification- arbitration is the method of solving the dispute which are more serious than
mediation and negotiation. The judgement will be passed by the arbitrator who got appointed by
the parties only and that decision bound the parties like court judgement's. The procedure of this
method is expensive but provide better and fast result then any method even court (Rosa, and
Hamilton, 1994).
M3 – Analyses the advantages and disadvantages of the formation of different types of
business organisation.
There are some kind of different business structures which carries some advantages and
disadvantages.
Advantages of Sole proprietorship
 Easy process to establish the business
 Require less responsibilities for administration
 Single owner receives all the profits
Disadvantages
 Single owner has unlimited liability of the company.
 No sharing of risk
 No financial support
Advantages of Partnership
 Not a difficult task to establish the business just need an agreement
 Risk got shared among the partners
 Company's liability got shared
Disadvantages
 Partners are liable for company loss and debts
 Partners are liable for their own debts and also of others
 Have to paid personal income tax
Advantages of Limited Company
 Limited liability of the members
 Fund can be raise easily
Disadvantages

 Its difficult to control the business activities
 Required high fee for the registration
 carries high administration responsibilities
CONCLUSION
From the above assessment many topics would got cleared related to business sector. The
assessment got divided into two parts in which first part is essay and another one is report. In the
essay part various topics got cleared like; sources of law, role of the government in making
laws,impact of contract and employment law on businesses. In the report part topics like; legal
formation of business structure, sources of raising fund by the business organisation,
recommended legal solutions for the given scenario and the advantages and disadvantages of
each business structure's.
REFERENCES
Books and Journals:

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Gstöhl, S. and Phinnemore, D., 2021. The future EU–UK partnership: a historical institutionalist
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information society, 20(3), pp.187-199.
Kamal, K., Qayyum, R., Mathavan, S. and Zafar, T., 2017. Wood defects classification using
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Rosa, P. and Hamilton, D., 1994. Gender and ownership in UK small firms. Entrepreneurship
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