Business Law Report: Analysis of UK Law, Business Structures and Cases

This report delves into the intricacies of UK business law, examining the concept of parliamentary sovereignty and the sources of UK law. It explores the roles of government in law-making, the application of statutory and common law, and the impact of contract, employment, and company law on the business sector. The report further analyzes different types of business organizations, contrasting the advantages and disadvantages of incorporated and unincorporated businesses, and comparing company structures with partnerships. Additionally, it presents and discusses relevant case studies to illustrate legal principles in practice. The report concludes with recommendations for alternative dispute resolution methods, providing a comprehensive overview of key legal considerations for businesses operating in the UK.

Business Law
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INTRODUCTION...........................................................................................................................4
SECTION 1.....................................................................................................................................5
TASK 1............................................................................................................................................5
1. Analysing the point ‘parliament is sovereign’ and sources of UK laws..................................5
2. Role of government in law making process and what the use is of statutory and common-
law in justice court.......................................................................................................................5
3. Impact of contract law, employment law company law in business sector.............................6
TASK 2............................................................................................................................................7
1. Types and formation of different business organisation..........................................................7
2. Advantage and disadvantage of unincorporated and incorporated business with its
difference between in terms of starting process..........................................................................7
3. What are the advantages and disadvantages of company over partnership firm.....................8
SECTION 2.....................................................................................................................................9
Case 1...........................................................................................................................................9
CASE 2......................................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
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INTRODUCTION
Business law is the commercial practice that contains certain guidelines that are used to
safeguard the interest of employee by resolving the chances of disputes which arises among the
various parties. It consist of public as well as private law that guide the individual in relation to
the way they can start, purchase, end as well as manage ethically all the activities associated with
business. Business law talks about the intellectual property right, employee legislation, taxation
law, contract as well as corporate law that have various sections and each section depict the right
and the way problem needs to be resolve appropriately. Along with that monetary transaction or
compensation is one of the typical issues that lead to clashes which are resolve by the practice of
such law (Business Law and Legal Definition, 2018).
The prime objective or the purpose of the existence of Business law is that it provides the
awareness to the people regarding their right so that other do not take their advantage and
mislead them. Business or the internal member goes through various phases where have to
formulate the decision or start new business. So each and every process requires the standard to
be established and order to be maintained to preserve the interest of people. For taking such
decision an individual require knowledge which is gained with the help of business or mercantile
law. Generally such law is widely used in Companies Act, Contract Act as well as Partnership
Act which help to maintain the interpersonal relationship and contain role and interest of all
partners. For instance, when partner run business partnership deed is prepared which contain the
role, contribution as well as profit share which each of them will get and maintain the peace.
Hence, there are various sources of law in context to Business law the common sources are
constitution law, administrative regulation, agreement and statutory law. These sources help the
business to maintain the guidelines and take strict action against the business or an individual
who breaches or ignore the rules. This may lead to the imposition of legal actions, imprisonment
or can cancel the licence of company.
This report is prepared to bring the clarity and resolve the various doubts associated with
law within UK. Who is sole responsible and have the supreme power to take the major decision
like which low needs to implemented determine why the “Parliament is Sovereign’’ in UK.
Along with that discussion will be made on the statutory low and its application within justice
court that influences the existence of business entity.
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Whereas, second sector makes the discussion regarding the type as well as formation of
business along with merit and demerit of incorporation and un incorporation association.
Moreover, various cases low which are used to handle business dispute are discussed along with
the relevant case. Further, valuable recommendation on the basic of alternate dispute resolution
is covered in this report.
SECTION 1
TASK 1
1. Analysing the point ‘parliament is sovereign’ and sources of UK laws
The term parliament is sovereign depict that all the legal authorities for each and every
individual is already created by the parliament which is supreme and this cannot be altered by
any of the authority including Supreme Court as well. These low are the part of UK’s
constitution which means these low are already entitled or declared by the house of lord which
can neither pointed out by anyone nor changed (Sharfman, 2014). The speech of queen which
was declared around the month of October played an essential role as they declared about their
programme which local residence was keen to know. Countries like England, North Ireland and
Wales as well England are the part of UK low. Thus all the legal consideration is applied for all
these countries. Therefore different sources of UK are clearly stated below.
Legislation: Legislation includes the low which is formulated by the parliament for the
welfare of various sections of society. It is mandatory to take the acceptance of UK parliament
before passing any kind of legislation within London. Thus, parliament of UK consists of house
of common with 650 member as well as house of lord that has 800 members.
Common low: These are the low which is formulated by the judges of Supreme Court on
the basis of any criminal offense. The main purpose of such low is to get the required solution on
the basis of specific situation (Zimmermann, 2012).
2. Role of government in law making process and what the use is of statutory and common-law
in justice court
Parliament of any country is responsible for the formation of any legislation. The top
legislation body or the representative of House of Lord as well as House of Common has the
authority to take all the major decision. Thus, any law require the acceptance of the majority and
according will is drafted (Kaplan, Weisberg and Binder, 2014). It involve various stages like first
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of all discussion is made on the bill which is presented which ends with the voting round.
Additionally, after the voting round come committee stage which requires the detail stage and
deep discussion on the advantage and disadvantage associated with proposed bill. Finally,
decision of acceptance or rejection is taken. In case of acceptance the representative of house of
lord makes the necessary amendments if required and then pass it to the house of common for
the final approval or inspection. This law fall under the Royal Ascent Act 1961. Moreover, the
common and statutory law makes the guideline in relation to decision which passed through
parliament with the justice court and need to be followed by everyone.
Case Law: King V. Burrell
As per this case justice court has the authority to take all the major decision based on
statutory law. Which everyone is made aware of like every citizen has right for health case.
3. Impact of contract law, employment law company law in business sector
Whether it is business or businessmen needs to have clear understanding of the various
other laws such as employment law or contact act. This is essential as during the time of
commencement, new business has to render the law because any change in the external law can
affect the whole process of business (McMillan, 2012). Thus, some of the essential law and their
impact or business sector are defined below:
Contract law: contract refers to the mutual agreement which is shared by the different
parties of an organisation which come together for the common purpose for example to expand
the business and set off the impact of competition. So it is essential for the different party that
must be clean with the terms and condition which are for specific time period. In case if any
organisation disagreement or breach the contract then the other part can fill a case and they have
to compensate in monetary terms and condition.
Company law: From the planning to the registration of company all the regulation of
government needs to be abite by as per companies Act 2006.
Employment law: Organisation needs to take care of their employee and offer them fair
remuneration on the basis of their work. Moreover, worker needs not to be discriminated on the
basis of their gender. These are some of the guideline that needs to be followed by the
organisation for smooth business process (Twomey, 2012).
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TASK 2
1. Types and formation of different business organisation
There are various type of business organisation which differ on the basis of size and nature
of existence (Hazard, Hodes and Jarvis, 2014) Some of the types are discussed below:
Sole proprietorship: Within such business and individual start or carry on its existing
business due to which they have sole authority to take all the major decisions of business.
Further, the liability is unlimited as the owner earns profit or incurs loss on the basis of their
effort. This is one of the simplest form of business which require less documentation work in
relation to Incorporation or registration of company.
Partnership: Partnership refers to the situation when two or more than two person or
individual come together and form deed is known as partnership business. As every partner’s
contribution is different due to which they share different profitability ratio. The main advantage
of this type is that partnership limited liability and has to bear low pressure of investment.
Joint venture: Joint venture is different from partnership organisation as here at least
two different organisation who deals in similar type of industry club together with the motive to
fulfil the certain Project or objective of business. It simply involves the separate company that
have shared interest due to which both of them have the privilege of ownership. Furthermore,
both of entity maintains their unique identity (Yosifon, 2013).
Corporation: Corporate are basically the large company that act as a single legal entity
and work to fulfil the common purpose of business (Norris, 2016). It is owned by the interested
shareholder of company who have the power to participate in annual general meeting and elect
the board of directors. Due to the legal existence subordinate are entitled to vote and make
significant decision. Hence, it includes memories ways to raise the fund which is defined below:
 Issue share from the companies who are listed in London stock exchange.
 Issue of debenture and bond from the company and government.
 Extension of loan from the financial institution or government agencies.
2. Advantage and disadvantage of unincorporated and incorporated business with its difference
between in terms of starting process
Incorporated association: Within this business is considered as the separated legal
entity that has its own right in comparison to the business owner. Thus independent legal entity
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makes the incorporated association more secure form to raise the fund for business. Some of its
advantage and disadvantage is defined below:
Advantage
 This association benefit the company by the proper management and ownership of
business.
 This allows the company to get wider range of options for public and private funding.
Disadvantage
 It becomes difficult for the company to take decision and implement the decision like
winding up.
 The incorporation process requires huge capital investment which makes it lengthy.
Unincorporated association: It does not include the separated business entity unlike
incorporated association this requires less documentation or paper work. It does not involvement
payment of taxes to the government due to no physical evidence or paper work (Burley, 2017).
Hence, advantage and disadvantage in relation to unincoporble association are defined below:
Advantage
 It is easy to incorporate as well as dissolve business without any interference of any legal
today.
 The process to file annual account is not required.
Disadvantage
 In case of any breach or conflict the law remain inefficient to deal with the situation as it
does not have existence in the eyes of law (Murray, 2014).
 The contract among parties is considered as void in front of law.
3. What are the advantages and disadvantages of company over partnership firm
The advantages and disadvantages which are associated with partnership firm are defined
below:
Advantage of partnership firm
 It become easier for the company to start the firm as they problem of capital gets sorted
because the ratio of investment gets shared among the firm.
 The liability which needs to be paid is limited (Grace and Cohen, 2013).
 The responsibility to manage the firm are equal allocated to various firm which lead to
effective management.
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Disadvantage
 Complex decision making due to the participation of various partner.
 In case of dissolution or winding up of business due to loss involve lot of documentation
work.
SECTION 2
Case 1
As per the given case, here is a dispute regarding creditors payments. Infrastructure
Company lend money to the Champion Ltd because they shift their business into new location.
At the time of shifting, company face financial problem so they take loans from various financial
institution and commercial banks (Hawkins, 2012). Champion Ltd unable to pay their debt and
after this company threatened by creditor's and it said they fill 'winding up petition' in respect of
the company.
Winding-up: In this stage, organization evaluates their assets for the purpose of sale and
pays their debt. When business sells their assets and after all this, creditor’s amount is remain
then value will be distributed as shareholders share. It is the last process of completing paying
their debt. This process will be followed by the public as well as private organization when they
face financial problems in business and not able to survive for long run. After this they decided
to wind-up their company and pay all their creditors. There are various ways to winding up their
business and it is discussed below:
◦ Winding up by the order of Court: In this winding process court will give the order
because creditor files the case regarding “winding up petition”. When organization
fail to perform their task and not able achieve their business goals & objectives. Here,
creditor plays important where they have to convince judge that company have to pay
their debt by selling their business assets. This method also called compulsory
winding up but it required following things to winding up (Schmidt, 2018).
◦ Through this process court pass the judgement that company have to pay £750 debt or
more which is mandatory (Winding up by the order of court, 2018.).
◦ In this case, creditors have to file petition against the company in the court.
◦ After petition court vestibule the creditors to show all the necessary or required
documents which can used as evidence and further it helps in providing success to
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win the case against company. If court finds that, all situations and evidences are true
than they pass the judgement regarding winding up.
◦ Liquidator is the person who is appointed by the court to calculate all the obligations
regarding creditor and then calculate the amount of business asset and then prepare to
sell for the recovery.
◦ After selling all the assets, amount will be paid to the creditors as per their share.
Voluntary winding up: Under this process, directors of a company provide information to their
shareholders that further this organization not active and it will be winding up due to non
payment of creditors. This process also done at the time insolvency or owner because when
organization not in the situation of paying their liability then they decided to close and pay
through selling of business assets (Bishara and Westermann‐Behaylo, 2012). This is the process
of voluntary winding up which is discussed below:
◦ Director conducts a general meeting for the shareholder where they provide all the
information regarding Special Resolution where majority of shareholders required
closing business voluntary. If this resolution not passes then winding up process will
be decline. After passing the resolution there are certain steps which must be
followed:
◦ Again, liquidator appointed by shareholders in order to evaluate the assets value.
Copy of resolution must be submitted to Companies Hose with in 15 days from the
day of meeting.
After this, company have to publish in the news paper that, organization is going to
winding up due to this reason. So shareholders get aware about this and it also
published in company’s website within 14 days.
Similar Case Law: Ebrahimi v Westbourne Galleries Ltd
Facts: According to this case, Mr Ebrahimi and Mr Nazar was shareholder of the organization
and they transfer their share to son of Mr. Nazar and after few days they decided to remove Mr.
Ebrahimi from company. so he file petition for Nazar regarding cheating.
Judgement: As per the situation, judge said that this is the different case which is not come
before that. But as per law, Mr. Ebrahimi was partner of the company and then judger give their
decision that company have to wound up and then handover the share of Ebrahimi.
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Champion Ltd try to communicate with creditor that winding up is not the best way, so they
wanted to suggest another way which is beneficial for the both party. There are some different
ways to solve conflicts among Champion Ltd and creditors which is discussed below:
Organization not able to avoid creditors voice but they negotiated on their terms which can
dissolve the case and provide appropriate solutions (Hanrahan, Ramsay and Stapledon, 2013)
So company ask their creditors regarding payment that in what time period they can provide
for repayment. Basically they ask for additional time to collect resources to pay off their
obligations.
It is the possibility which can help the business or creditors to stop the winding up
process because it is not beneficial at all. It will take longer time as well as costly because all the
formalities will take time, efforts and money. After all this argument, if creditor not convince
than organization choose the voluntary winding option to pay other debts. This method further
helps in paying their credits through selling business assets.
CASE 2
According to second case, there are dispute among the business partner regarding breach of
contracts where Mr. Anderson working as CFO of company in Amber Ltd. Both [arty came into
contract that, they have to give 12 month notice before resigning company but Mr Anderson
leave the organization without any information and join its competitive firm. Where he was the
CEO and its name is Beta Ltd. Even the reason is not appropriate and not suit for the company’s
terms & conditions. Now Amber Ltd declares Mr. Anderson as insolvent and claim regarding
damage breach of contract.
Contract: It is a legal agreement which can build among organization and individuals.
This type of legal agreement enforced by law and it is a kind of legal binding (Mann and
Roberts, 2012). After entering into contract both party have to follow all the rules and guidelines
which is listed in this agreement. Or if any party deny to done their duty then it will comes under
breach of contract. Valid contract include offer and acceptance which is most important and
along with this, it is prepared for legal purpose which can affect in future. There are two types of
contract, first one is written and another one is voluntary. But mostly written agreement are used
which contain some rules & guidelines and it is prepared at the time of preparing agreement.
Breach of Contract: In this process, when party done some action against the contract
called breach of contract. When person found guilty then they have to face some problems from
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and organization file the case for breach of contract (Nichols, 2012). After building contract, it is
not changed but if any change done as per mutual concern then it will not consider under breach
of contract. When any party claim that, their partner breach the contract then they have to present
some evidence which shows this true. In this situation, judge ask few questions regarding various
things such as:
 Contract still exists?
 After preparing agreement, any modification happen or not?
 To breach the contract, what is the exact damage they have to bear?
Insolvency: when organization or individual unable to pay their debt and declare themselves
as insolvent which means they does not have capacity to pay their obligation. This situation
occur due to loss of capital, reduce profit margin and creditors will increase. In other words,
liabilities will increase rather than assets. So, any people or organization declares themselves as
insolvent then they have to face various legal situations.
Related Case Law: Jones v Andrew
Facts: Jones and Andrew produce a agreement where Jones have to perform all the business
activities and take responsibility and another side Andrew will give £800 after completing task.
But in the end, Andrew not paid full amount so Jones decided that they file a petition regarding
non payment of work.
Judgement: After analysing both parties concern and related evidence, court found Andrew
guiding to breach the contract. So Andrew has to pay remaining amount to the Jones as well as
they have to compensate for the same. This process includes legal procedure, which take time
and money.
To resolve the disputes among both parties they have to follow some guidelines of
Alternate Dispute Resolution (ADR) which is discussed below:
Alternate Dispute Resolution (ADR): In is the process of solving disputes without any
legal interference. It includes the third party involvement in order to solve the conflicts and any
other disputes which reach at the ending stage of dissolving contract (Raz, 2017). Main
objectives of ADR is to reduces burden of legal bodies and make it less complex. Interference of
court will take longer time because there are already pending cases are running. With the help of
ADR individual can easily sort their problems and it provide faster decision. It is a U.S legal
system which adopted by the various countries in order to solve disputes in the business among
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the partners. There are various types of Alternative Dispute Resolution which is mentioned
below:
 Mediation: It is the neutral third party, who plays important role because it is appointed
to resolve the dispute. Here, both party come to a place where mediation also available
and ready to listen both side situation. Mediator discusses all the problems and provides
solution as per the depth of problem (Burley, 2017). Main role is to provide proper
guidelines to solve their disputes.
 Conciliation: This is the process ADR to resolve disputes among the parties where they
try to develop positive environment. Conciliator is appointed to give their valuable
suggestion as per the situation so both parties can resolve their issues and get the benefits
for the solutions (Stout and Blair, 2017). Mediation is different from conciliator because
here they provide advices or proposal for settlement.
Mr. Anderson and Amber Ltd go with the Conciliation process because it is not so
complicated. So Amber Ltd not allowed declaring Anderson as insolvent because it comes under
the case of breach of contract. So it is not right to say insolvent because it affects the personal as
well as professional life.
CONCLUSION
From the above discussion, it has been concluded that business law includes the sets of rules &
regulation which is required to perfume their task in order to maintain internal system and
various conflicts and disputes. Along with this, it includes the various practices which helps in
analysing or identifying the defaults or any kind of error. With the help of business law,
organization able to deal with different situation through different laws such as company law,
contract law, intellectual property law, sales of goods law, taxation law and many other different
laws.
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REFERENCES
Books & Journals
Bishara, N. D. and Westermann‐Behaylo, M., 2012. The Law and Ethics of Restrictions on an
Employee's Post‐Employment Mobility. American Business Law Journal. 49(1). pp. 1-
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Burley, A. M. S., 2017. International law and international relations theory: a dual agenda. In
The Nature of International Law (pp. 11-46). Routledge.
Grace and Cohen, S., 2013. Business Ethics Problems and Cases. Oxford University Press
Australia and New Zealand.
Hanrahan, P. F., Ramsay, I. and Stapledon, G. P., 2013. Commercial applications of company
law.
Hawkins, J., 2012. Credit on Wheels: The Law and Business of Auto-Title Lending. Wash. &
Lee L. Rev. 69. p. 535.
Hazard, G. C., Hodes, W. W. and Jarvis, P. R., 2014. Law of Lawyering. Wolters Kluwer Law &
Business.
Kaplan, J., Weisberg, R. and Binder, G., 2014. Criminal law: Cases and materials. Wolters
Kluwer Law & Business.
Mann, R. A. and Roberts, B.S., 2012. Essentials of Business Law and the legal environment.
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McMillan, L., 2012. The Business Judgment Rule as an Immunity Doctrine. Wm. & Mary Bus.
L. Rev. 4. p. 521.
Murray, J., 2014. Social Enterprise Innovation: Delaware's Public Benefit Corporation Law.
Harv. Bus. L. Rev. 4. p. 345.
Nichols, P. M., 2012. The business case for complying with bribery laws. American Business
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Norris, K., 2016. Common European Sales Law: A Missed Opportunity or Better Things to
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Raz, J., 2017. The rule of law and its virtue. In The Rule of Law and the Separation of Powers
(pp. 77-94). Routledge.
Schmidt, S. J., 2018. Marketing the law firm: business development techniques. Law Journal
Press.
Sharfman, B. S., 2014. Shareholder wealth maximization and its implementation under corporate
law. Fla. L. Rev. 66. p. 389.
Stout, L. A. and Blair, M. M., 2017. A team production theory of corporate law. In Corporate
Governance (pp. 169-250). Gower.
Twomey, D., 2012. Labor and Employment Law: Text & Cases. Cengage Learning.
Yosifon, D. G., 2013. The Law of Corporate Purpose. Berkeley Bus. LJ. 10. p. 181.
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Online
Business Law and Legal Definition. 2018. [Online]. Available
through:<https://definitions.uslegal.com/b/business/>.
Winding up by the order of court. 2018. [Online]. Available through:<https://www.gov.uk/wind-
up-a-company-that-owes-you-money>.
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