Business Law

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Introduction
The English legal system arises from four main sources. The Acts or statues of Parliament are
provided by the parliament. Delegated legislations are provided by other individuals within
the authority of the parliament. The given assignment entitled ‘business law’ shall
concentrate is producing detailed discussion of the different legal aspects of the English
legalsystem and the mentioned case examples.

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Task 1

P1 Explain different sources of law

Different sources English Law:

The English law system is mainly comprised of civil and criminal law and these two
distinctive set of laws are being monitored and regulated by different courts.European Union
laws evolve from regulations, decisions, directives, and treaties. Lastly, there is case law that
consists of judges also termed as the Common Lawand this forms to be a vital law in UK
parliament. The origination of common law requires a few days, and parliament does not play
an important part in it. Judges pick up new ideas from their work experiences and apply in
other cases(Slapper and Kelly, 2014).

Therefore, the entire kingdom works under the particular laws, and they are –

Sources of English Law

Common Liquidation Statutory European

Equity law
law law law law

Source: Self – created

i. Statutory laws are proposed by legislative bodies. The different set of laws are
embodied into this law and this has been mandatory for the citizen of UK and every
operational bodies working within the legal jurisdiction of UK to follow the set of

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 statutory laws.These laws are created deliberately through elected legislators as well
as official legislative processes(Kirchner and Painter, 2014). The judiciary has to
enforce and interpret the statutory law. However, the judiciary could not create
statutory laws. This law is mainly implemented by the approval of a bill by House of
Lords and House of Commons and on further approval of the Royal and same is
brought into action by the declaration of UK parliament. The statutory laws of UK are
distinct from the non-statutory laws. The non-statutory bodies are associated with
making of non-statutory laws. The non-statutory bodies are developed by the
executive resolution or action.
ii. Common law is the law that could be created by judiciary and not passed by the
legislative body(Slapper and Kelly, 2014). It is one of the primary source of unwritten
constitution of UKthe norms or standards set within this law is mainly meant for the
citizen to follow the same and maintain and follow fair practices. In case of case laws,
judges propose laws or make decisions that are further known as Common Law.
However, after Brexit, the impact of EU laws upon the UK might get diminished.
Alternatives to common law system in UK include civil law systems which are
primarily implemented in the Continental Europe and in major parts of Central and
South America.
iii. European Union laws are operated within European Union Member States. The
Court of Justice, the EU portrays as a new legal system for international law. This law
overrules national law in each country when there is conflict between the EU laws and
national laws.The EU laws are mainly followed by the member countries which are
forming the part of EU and thus a similar set of laws are established.The Statutes of
parliament is enhanced by the UK parliament and delegated as legislations. The
European Union laws originate from various decisions, directives, regulations and
treaties. The European Union laws developed is evident to pose a significant impact
over the existing legal system of the UK. EU laws are particularly influential in trade
related activities, agriculture, financial services and environment. Issues connected
with employment and immigration is also affected by the regulations imposed by the
EU laws. For example, the EU Climate and Energy “20-20-20” Package, Chemicals.
(REACH), and packaging requirements applicable for the UK manufacturers and The
Working Time Directives are affected by the EU laws. The Temporary Agency
Workers Directive under the EU law has considered giving equal rights to agency
employees and permanent employees. The Capital Requirements Regulation and
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 Capital Requirements Directive in alignment with the EU laws are involved in setting
out major obligations applicable for the EU banks (Thomsonreuters.com, 2019).

iv. Equity law is the body in which English Court of Chancery are developed to
administer concurrent common law. It is administered by Common law. This law is
mainly the set of legislative standards which are implemented and monitored by
central royal courts including English Court of Chancery. This is forming a vital part
of Common law and followed by the parliamentary bodies in the course of deciding
different cases and while taking judgements.The law has been framed in order to
maintain and promote fair practices and treatments within the society and any breach
of the same is a punishable offence in the eye of law (Kirchner and Painter, 2014).
Justified to mention that in context to equity law equity is a distinct part of the legal
framework of England and Wales. However, the primary challenge is associated with
academic writers working within the law of unjust enrichment.

v. The Liquidation laws are regulated by insolvency laws for the UK companies, which
are unable to repay their debts. The UK bankruptcy laws are related with natural
persons and formed within the Companies Act 2006. Under this law the assets of the
business distributed to the creditors or lenders of the business as per the set standards
in Insolvency Act 1986 (Kirchner and Painter, 2014). The compulsory liquidation and
voluntary liquidation are the two forms evident under this law and given the
liquidation situation the acts are enforced. The compulsory liquidation signifies the
forced liquidation of a company to the inability of the business to clear off its debts on
time and the voluntary liquidation is the process that is followed when the business
owners decides to wind off their venture and do away with the financial obligations
that they owe towards different creditors and lenders.
Considering the application of the Liquidation law can be related with the creditor
voluntary liquidation wherein the shareholders and the company directors agree to
place a business into liquidation. In this case of legal aspects, the trading of the
organization and its assists shall be sold to repay the creditors. Considering the case of
compulsory liquidation, the involved creditor has to pay a particular amount to the
company. It is also to be noted that any legal actions taken against a business entity is
halted by liquidation (Kirchner and Painter, 2014).

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P2 Explain the role of government in law making and how statutory
and common law is applied in the justice courts
Role of government in law making and application of statutory and common law in
justicecourts:

The role of government in the English legal system is divided into three parts so as to satisfy
every section and administrate every proceeding. The divisions are judiciary, parliament, and
executive government. The government of the UK is having the sole authority to take
decisions in every proceeding of the country(Kirchner and Painter, 2014). The amount of
government taxes to be collected and evaluation of public expenditure are all conducted by
the government.

The parliament in the UK is involved in introduction of new laws by passing bills. The bills
are classified by the government on the basis of public bills, hybrid bills, private member
bills, and public bills. A law is enacted only when it is passed by both houses of the
parliament and finally signed by the Royal Assent of the Queen before its implementation.
The UK government has unitary system, as it consist of power held by the centre though
certain powers are devolved to Scotland, Northern Ireland, and Wales(Slapper and Kelly,
2014). The government agencies and departments are staffed by politically impartial
individuals or civil servants and are capitalised by the parliament. These civil servants work
with local authorities and other government sponsored organisations. The government
policies make necessary changes in the structure of government agencies and departments.
However, change in political government do not impact functions of the government
agencies.

Effectiveness of legal system in terms of recent reforms and developments:

Every start up business in the United Kingdom must abide by the Companies Act 2006. This
act details the provisions and rights of small companies that are based on previous processes
in the statutory demands. The act is flexible legislations for the business organisation along
with easy statutory procedures, confidential corporate structure, and medium complicated
filling needs. The new start up business might originate various forms in corporations such as
Corporate Sole to ascertain entity, Statutory Corporations to act as artificial body and frame
the Act of Parliament,andChartered Corporations as institutions for providing royal charter,

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and the Registered Partnerships and Registered Companies to undergo registration processes
before beginning with their business entity(Schwartz and Scott, 2014).

Modifications in the English legal system is done with the intention to strengthen the
foundation pillars in the present legal system. Some of the crucial developments in the
English legal system in the past few years are development of Information Communication
Technology, Specialised court proceedings, Customer service delivery, publicising legal
education, and assuring equal opportunities in the work place.

one of the major developments made in the English Legal System in the introduction of
Employment and LabourLaw 2018. This act states the rights of the employees, workers, and
self-employed individuals. Extensive rights of the employees are mentioned under this act. If
the workplace is under the control of the employers, it is essential that employees are
considered as individuals and mutual obligation must be present as per the law(Schwartz and
Scott, 2014). This law had also made positive changes in the sections like terms and
conditions of employment, business sales, discrimination, termination of employment,
employee representation and industrial relations, maternity and family leave rights, data
protection and employee privacy, and others. These developments in the Employment law
had supported the employees to work in a safe and secured working environment.

Coherent and critical evaluation of the legal system:

The legal systems in the United Kingdom could be separated into three parts and they are
Scotland, Wales, Northern Ireland, and England(Kirchner and Painter, 2014). The United
Kingdom has unwritten constitution where there is no single written document and set out the
rights of citizens and the manner in which government should work. The UK constitution
consists of various sources like statutes and other constitutional conventions, which are also
unwritten. The constitution in Parliament of Westminster is unitary, which has the supreme
law making authority. From 1999, devolution has asked for transfer of powers from
Westminster Parliament to assemblies in Belfast, Cardiff, and Scottish Parliament in
Edinburgh. The constitutional conventions are vital in unwritten and non – legal sources of
constitution(Schwartz and Scott, 2014). These are defined as the rules of constitution and
behaviour that are regarded binding upon operational constitution that are not enforced by the
court of laws.

Principle of separation of power –

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It is essential for a democratic government to act effectively. The separation of powers
enables the government bodies to decentralise administrative responsibilities.

Power of lawmaking – Parliament

The legislation and parliament has the main responsibility to check proposed bills and new
regulations and make modifications in the existing ones. It is the duty of the Member of
Parliament (MPs) as well as of the House of Lords to evaluate the bill before it becomes an
act.

Power of administration – Courts

The UK administration is scrutinised by the court as it regulates branch of UK public law.

Thecourt hears civil and criminal cases in the UK and provides necessary decisions based on
common laws and statutory laws.

Power of executing – government

The government enact on the acts and regulations passed by the parliament and also make
sure that decisions of the courts are followed in the society. The government has the police
force to maintain law and order within the country.

Law enforcement bodies –

Territorial police force is the main law enforcement body of the government. The police
administration work as per the Police Act 1996 and Police Act 1967. There are also bodies
like the National Law enforcement bodies and miscellaneous police forces.

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Task 2

P3 Using specific examples illustrate how company, employment and

contract law has a potential impact upon business
Introduction:

The report elaborates potential impact of law on business. The impact of company,
employment, and contract laws has been discussed in the report.

Impact of company, employment, and contract law upon business:

Introduction:

Every business organisation has to comply with the company, employment, and contract laws
introduced as per the UK government. A contract is a legally bounded agreement.
Contract is applicable when a one party is offered a business by another party. Elements of a
valid contract include an offer, acceptance to the offer, intention to create a legal
relationship, capacity of the contract, consent, considerations an implied and expressed terms
of the contract (Baker, 2019).

A contract has certain elements within the contract and they are –

Formation:

It is when contract begins or the contractual journey begins between parties. If no contract is
formed then neither of the parties will be under obligation.

 Offer and Acceptanceis essential part of contract; it requires involvement of at least

two parties. One party has to offer the contract and the other party has to accept the
contract after going through all the details and terms and conditions within the
contract. The signing of contract initiates legal relationship within the parties
(Dhingra, et al. 2016).
 Construction involves exchange of some value for a specified task undertaken within
the business contract. There must be exchange of money or assets for a task
undertaken in the contract for the promise made in the contract.

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  Certainty includes meeting of the minds in the agreement. For instance, all the parties
within the contract must be aware of terms within the contract.
 Privacy of Contract

It is a common law to follow doctrine of privity of contract principle that involves obligation
or confer rights of persons not included in the contract. Only parties involved in the contract
could claim for their rights and damages (Dhingra, et al. 2016).

 Vitiating factors

These are elements in the contract that includes duress mistake; undue influence,
misrepresentation, and illegality are determinants of contract validity.

 Discharge obligations

It takes place when vital obligations in contract are completed. The termination of the
contract entails termination of contractual association. Parties could conclude a contract when
they do not fulfil primary obligations in the contract (Dhingra, et al. 2016).

 Remedies

It includes specific performance, reformation, rescission, restitution, money damages, and

others. Parties affected by breach are liable to be benefitted from the contract terms and
remedies.

Damage is associated with the consequences faced by a party due to other’s party’s failure to
meet with the terms and conditions of the contract. A damage suffered can be monetary loss,
physical harm or material damage entitled for claiming compensation (Dhingra, et al. 2016).

Compensation is the legal penalty ordered against a damage claim. Compensation can be
money damage award, restitution, rescission, injunction for quantum meruit.

Contents of contract are also considered as the incorporate terms or clause within the said
contract (Baker, 2019).

Directive in a contract is the direction or guideline provided within the contract documents
that are mandatory to be followed by the involved parties.

End of contract may be incidents due to-

 Impossibility of performance

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  Breach in contract
 Termination by prior agreement
 Rescission (Baker, 2019).
 Completion of contract

The company law includes the Company Act 2006. The UK Competition law is influenced
by both British and European elements. The Competition Act and the Enterprise Act 2002
have significant status in the national economy. It assures that small businesses in the
economy are not overtaken by the large business organisations and a fair competition takes
place in the economy (Dhingra, et al. 2016).

Memorandum of association of an organization is an important legal document that is

mandatory for the organizations operational within UK to be filed with the Registrar of
Companies while the company is being incorporated.

Association of article or AoA is a legal document of an organization submitted with

memorandum of association defining the responsibilities of its directors towards the said
organization (Hannigan, 2018).

Formation:

It is the method of registering business as a limited company within Companies House. After
registration, business has unique legal identity or entity. When a company becomes limited
company, it gains the status of individual person in front of law.

Types of company:

There are mainly four types of companies, and they are sole proprietorship, corporation,
partnership, and Limited Liability Company (LLC). Sole proprietorship has only one owner.
Partnership business takes place when two or more individuals get involved in business.
Corporations have number of legal rights and are state charted (Hamilton and Webster,
2018). The owners have limited liability as the company has separate identity. LLC could be
owned by various entities along with individuals, trusts, corporations, and other LLC.

Responsibility of Directors:

The directors of the company have main responsibility to manage company operations. They
must act according to the growth and development prospects of the company and also benefit

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the shareholders. The directors of the company also have responsibilities towards employees
of the company, state, and trading partners, and suppliers.

Shareholders and Shares:

The shareholders of a company are also regarded as stockholders in an institution or a

company. They own minimum one per cent share of the company’s equity or stock. It is
because, shareholders are considered as owners of the company (Hamilton and Webster,
2018). They reap profits for the company’s success in the form of enhanced stock valuation
distributed as dividends. The shareholders could lose money, if the company performs badly
and the stock prices decline.

Information required:

The company law regulations are intermingled with the way in which investors, corporations,
directors, shareholders, creditors, employees, and other stakeholders like community,
customers, and environment interact with each other. Any individual who contributes towards
financial share buying process of the company could buy stocks of the company (Dorresteijn,
et al. 2017). However, a private company could not have more than fifty shareholders. It is
known as restriction on transferability of shares. However, a public company could freely
trade its stocks in the market place that is known as free from transferability of shares.

Auditing:

Auditing poses to be another vital factor under company law it states the requirement of
getting the annual reports of the company to get audited that is a reasonable assurance is
attained and ensured that the company accounts are devoid of any misstatement (Dorresteijn,
et al. 2017). Under Company Act 2006 the duties of auditor are mentioned along with the
limits to which an auditor can use the information of the company that is the auditor’s right to
information.

Aspects under the Employment law-

Employees and workers are entitled to legally exercise certain rights complying with the
Employment law. Hence the rights of the employees or workers has been connected with
areas like heath and workplace safety, provisions of terms and conditions of the employment
and equal opportunities rights. The employees of organizations within UK are also entitled to
enjoy a minimum wage under the Minimum Wage Act.

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Data protection- an organization needs to ensure maintaining confidentiality of its
information like customer’s details, sales records aligning with the Data Protection Act. 2008.
According to this Act it is mandatory for every business organization to assure limited and
authorised access to information. Data theft is a punishable offence and is included under
cyber crime (Gooberman, et al., 2018).

Holiday entertainment pay- complying with the Employment law the employees of UK are
entitled for enjoying 28 days paid holidays annually and are considered as statutory leave
entitlement or annual leave

Working time- the employees working is business organizations of UK are legally entitled to
work not more than 48 hours a week and is include under the Working time directive or
working time regulations.

Maternity and paternal rights- under the employment law employees are entitled for such
leave. Maternity leave allotted in UK is 50 weeks and 37 weeks of pay can be shared among
the parents. Under the employment law the statutory shared parental pay is £139.58 per week
or about 90% of the average weekly earnings (Gooberman, et al., 2018).

Discipline and grievance- in compliance with the Employment Law the business
organizations operational in the United Kingdom need to incorporate guidelines for employee
disciplines and grievance procedures. The procedures are essential to be drafted in form of a
booklet and should be handed over to each and every employee. It is to be noted that if the
mentioned codes are not followed by the employees the employees are subjected to serve a
legal compensation. This guidelines booklet can be also handed over to the employees along
with the contract of employment (Gooberman, et al., 2018).

The start – up business organisations must also be aware of Employment laws in the UK.
The employment contract is a legal agreement between the owner or the organisation and the
employee / employees. A valid employment contract must be provided to the employees upon
their appointment which comprises every legal terms and conditions within the employment
period. For instance, post and duties of the employees, terms and type of employment, salary
and disciplinary actions must be clearly mentioned (Hamilton and Webster, 2018).

 Written or oral contract:

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The employment contract has to be in the form of a written contract so that all the terms and
conditions of employment are mentioned within it.

 Capacity:

The employees in the employment contract should have the capacity to undertake the job
responsibility and all duties in the organisation (Dorresteijn, et al. 2017).

 Conditional offers and references:

The employers or owners of the organisation should mention the conditional offers or
regulations and policies within the employment contract and also aware employees about the
terms and conditions. None of the terms and conditions should be kept undisclosed.

 Acceptance and counter offers:

The employees should accept the terms and conditions of employment within the
employment contract. If they have any doubt or confusion related to the contract, then they
should clear it in the beginning of their employment period (Axelsson and Easton, 2016).

 Collateral contracts:

It is basically a single term contract that is made in consideration with the party that benefits
the contract to operate and agrees to enter the terms of main contract. It sets additional terms
related to same subject matter within the contract. Collateral contract involves persons to
enter into maintain contract that depends within existence of the main contract.

 Considerations:

The employers have the legal obligation towards the employees for their on - time payment
and providing a secured and safe work place environment in the organisation. Anti –
discriminatory actions must be taken by the employers so that none of the employees faces
any abuse or discriminatory incidents with subject to their age, sex, religion, colour, or social
background (Dhingra, et al. 2016).

 Interventions to create legal relations:

Can be aligned with the intention to create a legal relation that comprise of the readiness
of a party to accept the legal consequences after it has signed an agreement

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  Terms and conditions:

Terms in a contract are the pre developed clause established through consent of the
involved parties are mandatory to be followed aligning with the developed contract.

The employees have the right to equal payment for equal amount, quality, and quantity of
work in the organisation as compared to other employees in the work place. This statement is
also included within Equal Rights Act 2010. The employees have the right to fight for their
unfair dismissal and safe and secured work place within the organisation.

Difference between legislation, regulations, and standards to analyse potential impact

upon business:

There are various types of legal contracts which are applicable with UK regulations,
legislations, and standards. It implies that business organisations must comply to these in
order to ascertain active business organisations. Different legislations, standards, and
regulations in the UK are –

Redundancy – It involves the right process of employee dismissal. It states the right process
that includes measures which requires to be followed so as to make proper and valid
employee dismissal process (Dorresteijn, et al. 2017). The redundancy is a proper UK
standard that need to be implied by the employers while employee dismissal like providing
option to shift job, time to search for new job, notice period, employee consultation, and
redundancy payment.

Cases of dismissal – It states that the employers have the right to terminate their employees
on behalf of in - disciplinary actions and lack of skills and knowledge for the job position of
the employees. However, the employees should be terminated with proper reasons like illegal
contraventions during statutory duty, redundancy, qualifications, capabilities, code of
conduct, and other substantial reasons.

Discrimination is controlled or restricted within business organisations on the basis of

Equality Act 2010 legislation. The employees have the right to attain respect in the work
place. None of the employees must be discriminated or abused on the basis of religion, race,

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colour, sex, or age. The UK government has laid active legislation to avoid any
discriminatory actions in the work place (Dorresteijn, et al. 2017). Discrimination is a
punishable offence and the employers are equally punishable for not taking any actions
against discrimination cases.

Health and Safety Act states that the employees have the right to get total protection in the
work place with subject to their safety and security while working. Health and safety
regulations must be laid in the work place so that all the employees follow perfect actions in
order to avoid any accident cases (Hamilton and Webster, 2018). It is the duty of the
employers to implement active health and safety regulations and ascertain safety and security
of the employees and people in the work place.

Coherent and critical evaluation of legal system:

Tort of negligence is the fall of standard and become a reasonable man. Tort of negligence is
the claim of negligence that arises during duty of care owned by defendant to claimant. It
takes place when duty is breached or the claimant has faced loss due to breach of duty by
other party in the business contract. Tort of negligence takes place when employees or
employers breach their duty or conducts negligence towards their duty (Dorresteijn, et al.
2017). The UK government has laid down disciplinary actions and punishable offence for
negligent cases or negligence towards duty of care.

Donoghue v Stevenson [1932] AC 562, HL is a case in the English law which states that the
manufacturers have the duty to maintain the quality of medicine and article of food that they
produce. The manufacturers must investigate the quality of products that they purchase from
distributors in order to prevent loss to the ultimate consumer by discovering defect by
inspection (Hamilton and Webster, 2018). It is the duty of the manufactures to ascertain
rights of the ultimate consumers.

Conclusion:

UK regulations, legislations, and standards are incorporated so as to evolve an effective legal

business contract.

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Task 3
Introduction:

The objective of the report is to examine the formation of various types of business
organisations and present a report to Mr Mc. Jones.

i) Explore how different types of business organisations can be legally

formed (P4)
There are three basic forms of legal business organisations and they are –

Sole Proprietorship – It is a business which is owned by one individual. The type of business
is easy to set up and less costly as compared to other forms of ownership. However, this kind
of business is having unlimited liability (Axelsson and Easton, 2016). For instance, the
creditors might takeover person assets of the owner if they are not able to pay the debts.

Partnership – It is a business which is owned by two or more individual and they contribute
to the resources of the company and enhance its entity. The profits and losses in the business
is divided among the partners with subject to their capital investment in the business. In
general partnership agreement, the partners have unlimited liability; whereas, in limited
partnership, creditors could not takeover personal assets of the limited partners.

According to the English business law limited partnership is considered as a partnership

that has been registered compliant with the Limited Partnerships Act allowing two or more
person to execute a business sharing a common objective of profit making (Axelsson and
Easton, 2016).

Partnership theory conceived by Jonathan Levin is associated with explaining the relative
scarcity of partnership outside of the professional service industries like law.

Partnership theory – referring to the entity theory of partnership, in business law it can be
explained as the legal existence of an organisation separate from its members. Also
partnership is considered as a legal aggregate wherein group of individuals do not possessing
a legal existence separately from that of its members (Axelsson and Easton, 2016).

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Traditional partnership indicates shared profits and shared investment and is considered as
an extension of sole trader model.

Corporation – The business organisation is having its own legal identity apart from its
owners. The ownership in the company is represented by shares of stock. The owners of the
company enjoy limited liability and likewise have limited involvement in the operations of
the business (Axelsson and Easton, 2016). The boards of directors are selected from the
group of stockholders, who control activities in the corporation. Hence referring to the
Company law of the United Kingdom the corporations are regulated under the Companies
Act 2006 and corporate governance in the United Kingdom are mediated through the rights
and duties among the involved shareholders, workers, company creditors and its appointed
directors (Axelsson and Easton, 2016).

Legal personality of corporation is recognisable under the regulatory principles of the

English business law. Hence a corporation is assumed to be an artificial person enjoying the
law capacity to have the eligibility of holding property (Axelsson and Easton, 2016)..

Corporation created by Operation of Lawindicates the right created for a party irrespective
of the intent of that party.

Company officers are the individuals who are given the responsibility of looking into the
operational activities of the same.

Limited liability organization includes limited liability of the partners.

Ultra vires is considered as a legal authority applicable in this form of organisational

structure. The Doctrine of Ultra Vires is perceived as a fundamental rule of Company law
that stated that objects of a company as specified in the company’s memorandum of
association. Ultra Vires literally implied ‘Beyond Powers.’ Additionally the Doctrine of
Estoppels is usually precluded reliance on the defence of ultra vires wherein the monetary
transactions made were completely performed by one party (Goffee and Scase, 2015).

Cooperative – It is a business organisation that is operated by individuals for their mutual

benefits. The individuals within the cooperative are known as members. Cooperatives are
unincorporated and incorporated. Examples of cooperatives are housing cooperatives, credit
unions, and cooperative banking, and water and electricity cooperatives (Axelsson and
Easton, 2016).

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Ownership and management with respect to legal context is associated with possession of
an organization and its subsequent control. An organization is legally entitled to be regulated
by the Board of Directors and other shareholders exercise their right to vote a director for the
concerned organization.

Public accountability can be associated with the obligation to answer publicly wherein the
answer communicated should be of an acceptable standard important for discharge of
responsibilities that influence on the public forum.

Continuous succession has been considered as a continuous process or event that continues
for a considerable long period of time without any halt (McLaughlin, 2018).

Limited liability of investors is Limited Liability Company impose limited liability over its
investors and is commonly the value of the individual’s investment in a company. However
the shareholders of the said organization have limited liability but they are entirely liable for
their respective actions.

Transferable by shares indicated that the company’s shares are tradable in nature and
cannot be withdrawn from a society (McLaughlin, 2018)..

Tax- is one of the compulsory financial charges imposed over the earning of an individual or
over the profits generated by an organization. Failure towards scheduled payment of tax is an
offence action demanding legal compensation to be served.

Separate property rights considered as rights associated with non-marital property and
acquired before marriage

Raising capital- a several methods of raising funds include crowd funding campaigns, funds,
grants and through applying for bank loans. In business capital rising can also be
accomplished through an equity investor or trough venture capitalist (McLaughlin, 2018).

Continuity –This is another law under Companies Act 2006 and the continuity aspect is
applicable when any given provision of this act is re-enacted and any such change in the
company or business does not affect the continuity aspect of the company (McLaughlin,
2018).

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ii) Explain how business organisations are managed and funded (P5)
Public sector organisations

The organisations are undertaken by respective governments. These organisations conduct

business for country and the shares are available for common people in the country. The
management of the organisation is based on the rules and regulations laid by the government
and also by the board of directors of the company. The funding of public sector organisations
is done through various methods like fees, taxes, and through financial transfers from
different levels of government sectors (Goffee and Scase, 2015). Governments in different
countries apply their respective funding strategies in the public sector organisations.

Private sector organisations

It plays a vital part in the growth and development of the economy and run by companies and
individuals rather government. The main intention of the private sector organisations is to
make profits. The private sector organisations are flourishing the free economy countries like
the United Kingdom. The government has a few amount of restriction and control over the
management and operations of the private sector organisations. The funding in the private
sector organisations is done through profits made in other projects, government or bank
loans, or capital investment of the shareholders (Goffee and Scase, 2015). The shares of the
company are restricted to the shareholders of the company.

A private organisation should be registered with the Companies House and should have at
least one director and 1 secretary. A private organisation can be limited by shares or have
limited liability imposed to its shareholders. It should have a share capital of £50, 000
(Goffee and Scase, 2015).

Breaches of contract can be explained as an incident of failure to meet with the contractual
terms and conditions by the involved party or parties. Breach is contract is hence considered
as a civil wrong wherein the binding to an agreement is compromised reflecting non-
performance or interference with the other party’s performance (Baker, 2019).

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iii) Assess the advantages and disadvantages of the formation of
different types of business organisations
Sole Traders – The advantage of sole traders is that the individual owner of the company has
full authority to make decisions in the company. There are no conflicts of decisions and quick
decisions could be taken while operating business. The profits are solely enjoyed by the
owner of the business. However, the loss in the business is also solely for the owner. The
individual owner has to meet the entire asset and capital requirement in the business (Goffee
and Scase, 2015). The creditors could take over personal assets of the owner in order to
satisfy debts in business.

Sleeping partners are only associated with investment and are considered as silent partners
and do not make any kind of interventions in terms of business decision making activities.

Partnership – The group of owners make it easy for the business to gain capital investment
and resources for the company. The skills and knowledge of partners make it easy for the
business to attain smooth business operations. The profits and losses are divided among the
partners with subject to their capital investment in the company. On the other hand, the
conflicts of interest might arise among the partners with subject to their individual interest
and choices in the business. There are two types of partnership business and they are limited
liability and unlimited liability. In unlimited liability, the personal assets of the partners could
be taken by the creditors for debts payments (Blair and Hitchens, 2018).

Limited liability partnership indicates limited business accountabilities of the partners and
should be in accordance to the Limited Liability Partnerships Act 2000. This Act is
applicable in partnership business within the United Kingdom and Scotland. Limited
liability partnership agreement, the personal assets of the partners could not be taken by the
creditors.

Public and private sector organisations – In public sector organisations, the main motive is
welfare of the society and development of the country. However, sometimes contribution to
the economy might overlook personal assets and credibility of the company. In public sector
organisations, the main motive is to make profits for the organisation. Sometimes, the urge to
make profits by the shareholders or the investors could overlook welfare and wellbeing of the
society as a whole.

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Limited company- under the domain of the UK business law a limited company should be
registered at the Companies House and such a company must mandatorily have both director
and board members. The members of a limited company are identified as shareholders
provided the company is recognised as limited by shares. Hence the main feature of a limited
company under the English law is reflected through the fact that it offers limited business
accountabilities to its members (Goffee and Scase, 2015).

Private limited company- it is considered as a legal entity possessing rights and in such case
the company’s finances are distinct from the owner’s finances, also a private limited
company is not responsible to initiate trading or business practises within any set time
duration following its incorporation.

Public limited company – a public limited company should be mandatorily getting

registered with a name which ends in the words ‘public limited company’/ PLC. Also it is to
be noted that a PLC formed must essentially have issued share capital worth £50,000, of
which 25% of the nominal value. Also the whole of share premium must is cleared prior the
company is officially registered as a public limited company (Blair and Hitchens, 2018).

It is also to be noted that under the Public Company CA 2006 regulations applicable within
the United Kingdom a certificate of commencement of business is issued prior starting of the
said organisation. For issuance of this certificate the original documents for incorporation of
Public limited company are required (Blair and Hitchens, 2018).

Complying with the Companies Act 2006 a public limited company can be limited by
shares imposing limited liability over its shareholders.

Difference between partnership and the company-

Factors Company Partnership

Creation Company is an artificial legal
person
Numbers Minimum 2 members with a
maximum of 50 members
Legal personality Created by registration
Limited liability In private limited company
business liabilities are limited
by shares or by guarantee
Termination Termination of Directors is
decided by the investors
Succession Perpetual in nature
Partnership is not a legal
person
Minimum 2 members with a
maximum of 20 members
Registration is not mandatory
Liability of the members are
unlimited
Termination is decided by the
partners
absent

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Source: (Hannigan, 2018)

iv) Critical review and evaluate types of business organisations

The Company Law in the UK is set out as per the Companies Act 2006. It maintains the
requirement of filling, distribution, and requirements of reports and accounts along with
choices of accounting framework. This act states that business organisations come in
different shapes and sizes. The main difference lie between them is what they can do and
cannot do. It provides a separate legal identity to the business organisations. This act states
that the assets of the company might belong or not belong to the company directors,
shareholders, and management (Blair and Hitchens, 2018). The company is responsible for its
own liabilities and debts. The shareholders have general rules and the directors could not be
forced to pay the debts. The Act also ascertain rights of the small companies over the big
companies and maintain individuality of the business organisations.

A company registered as a private limited company under the CA 2006 should be issued with
a registration certificate of incorporation (Blair and Hitchens, 2018).

Conclusion:

The report illustrates that the different types of business organisations have different forms
and motives in the market place. However, the government regulations are followed in order
to maintain individuality of the business organisations.

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Task 4

P6 Recommend legal solutions for resolving a range of disputes using

examples to demonstrate how a party might obtain legal advice and
support

Case 4.1

Understanding the given case scenario wherein a conflict and gap in communication has been

surfaced it is advisable for the concerned HR of the organization to consider a dispute

resolution approach. Hence addressing Sarah’s case, Alternative Dispute resolution can be

taken into consideration for effective settlement of the identified dispute. The dispute

resolution spectrum being wide in nature encompasses several non-binding and binding

process. The public ligation including administrative forums and judiciary entities and

arbitration convey judgement that is to b accepted by the involved parties. However process

assistance approaches of dispute resolution like conciliation, facilitation, mediation and

Ombuds offer non-binding decisions (Fiadjoe, 2013).

Referring to Sarah’s case her past indicated a pleasant personality with high performance

efficiency while her present nature reflected irritability with declining performance

efficiency. Coming to her future it is unlikely that she might improve for behaviour in the

professional filed.

Past Present Future

Pleasant personality Irritable No improvement in future
High performance Low performance
Very efficient Efficiency declining

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Hence aligning with the Equality Act 2010, it is essential for the HR manager to take

disciplinary action against Sarah only after obtaining evidences against her. Hence the

company may consider the past good behaviour of Sarah may consider implementing either

conciliation or negation to resolve the identified dispute (Blancero, et al., 2010).

The concept of alternative dispute resolution or extrajudicial dispute resolution is a less time

consuming and cost effective process wherein the involved parties are give opportunity to

communicate their respective perceptions. ADR unlike litigation do not involve lengthy court

session and outcomes are pretty faster.

Source: (Blancero, et al., 2010).

Compare and contrast different legal sources of advice supporting dispute resolution

The different approaches of alternative dispute resolution include-

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Arbitration which is frequently preferred for mitigation of commercial disputes wherein the

identified dispute is settled by an adjudicator offering unbiased decisions. Arbitration can be

voluntary and mandatory.

Mediation similar to arbitration involves a third impartial party who is considered as the

mediator. Role of specialised communication and negotiation keeping interests of both the

involved parties are evident in mediation (Blancero, et al., 2010).

Conciliation includes a conciliator for dispute mitigation and primary effort is given to

minimise the tension created among the involved parties. Conciliation exclude any form of

legal standing and the conciliator has no right to give the final judgement hence non-binding

in nature (Blancero, et al., 2010).

Difference between conciliation, mediation and arbitration:

Conciliation Mediation Arbitration

Informal in nature Formal way of dispute Formal in nature

resolution
Flexible in terms of decision Less flexible than Not flexible in nature

making conciliation
Absence of legal power Present Present
Non-binding in nature Binding in natures The parties need to oblige the

decision of the arbitrator and

hence binding in nature

Involved parties have Comparatively lesser control No control by the parties

significant amount of control possessed by the parties involved

on this dispute settlement

methods
Source: (Blancero, et al., 2010).

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Negotiation is preferred as an alternative dispute resolution approach aiming to resolve the

mutual clashes within the involved parties through discussion. Integrative negotiation or

interest based bargaining include a negotiation strategy wherein the parties are encouraged to

collaborate and find a win-win to the identified dispute. Interestingly distributive negotiation

applies a negotiation strategy in which fixed amount of resources is divided between the

involved parties and less flexible in nature (Mackie and Mackie2013).

Ombuds or ombudsman are public advocate owning the official charge of representing the

interests of the public through applying investigative measures responding to the complaints

related with mal practises in administration and or incidents of violation of rights (Mackie

and Mackie2013).

Evaluation of the effectiveness of legal solutions and legal advices and support for

dispute resolution:

It is essential for the involved HR to consider the guideline of the Employee Dismissal Act

applicable in UK for overcoming the dispute with Sarah. Hence considering Sarah she is

having an option to file case in Employee Tribunal Court while the HR has an evidence of

bad conduct of Sarah for terminating her.

On the contrary trying to solve the identified dispute it is advisable to approach the ADR that

shall relief both the parties from the long court trials. Hence considering Sarah’s involvement

with the identified dispute, it is advisable to consider either mediation or integrative

negotiation approach to settle the issue. In order to settle the dispute through mediation it is

mandatory for the concerned HR to appoint a mediator taking consent of Sarah. The rationale

behind suggesting mediation as an alternative dispute resolution method can be supported by

its high success rate and opportunity to obtain a fair judgement. The other benefits of opting

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for mediation as one of the dispute resolution methods are its informative nature, it can be

arranged informally, faster process and cost effective (Fiadjoe, 2013).

Furthermore it is also recommended that the concerned HR manager to opt for integrative

negotiation with Sarah to settle to identified problem. By selecting integrative negation as a

dispute resolution method it shall be possible to focus on the underlying interest of both the

parties along with offering brainstorming options for obtaining better solutions. Therefore by

selecting integrative dispute resolution method it shall be also possible for both Sarah and the

concerned organisation to be mutually benefitted wherein the claims are met to a maximum

possible level (Fiadjoe, 2013).

Case 4.2

Referring to the provided case of Romanov a breach is contractual considerations can be

perceived wherein seeking for remedial measures by the claimant is considered to be

applicable. The case connected with Romanov has indicated breach in contract wherein the

altered conditions although communicated were not addressed resulting to financial loss of

the concerned claimant, Romanov (Peel, 2015).

In consideration to find legal solutions for Romanov’s case it is essential to consider the ADR

procedures applicable along with exploring the litigation rules of Russia since the defendant

was a Russian client. it is to be noted that the involved judge in course of decision making

may be over shadowed by the difference in legal guidelines and the case may be both time

consuming and expensive. Also while directing compensation as a remedy for Romanov it is

mandatory to consider the impact of Brexit on UK and the subsequent currency fluctuations

rates in pound (Fiadjoe, 2013).

29
Justified to state that the Russian Judge is likely to get influenced also filing a litigation case

in the United Kingdom can be expensive and also time consuming. The cited case of

Romanov is also considered to be affected by the emerging Brexit issues followed with UK’s

decision to exit from the European Union. This has resulted in significant fluctuation in the

pound value reflecting a falling foreign exchange rate in terms of converting from pound to

roubles. The issues connected with fair trade and are relevant regulations also need to be

taken under consideration for addressing this cited case of Romanov. Aligning with the fair

trade regulation, UK need to assure the practise of fair trading wherein contractual breach

incidents are considered as illegal.

Considering the case of Romanov it is also evident that he has suffered a monetary loss of

nearly 10% of his total profit generated compared to the profit he was exchanging. This was

due to the negligent act of the opposite party and hence is entitled for proceeding with

litigation. Also Romanov is entitled to claim for compensation in terms of money to cover up

the 10% loss suffered by him in this particular deal. Also on a suggestive note it is advisable

for Romanov to claim for money damage award while the judge may also consider offering

restitution for termination of the said contract. Hence irrespective of the nature of

compensation award to Romanov it is expected that he should be given a fair amount of

compensation for suffering a breach in contract.

Hence the incident breach in contract can be aligned with a positive mal performance or

defective performance is the involved purchase, the UK importer did not pay the price quoted

by the claimant, Romanov. A breach in contract can be explained as a legal cause of action

and a type of civil wrong wherein the agreement terms and conditions are not honoured by

one or many involved parties. Non-performance or interference with the other party’s

performance is considered the two major outcomes of breach in contract (Peel, 2015).

30
Source: (Rowan, 2012).

Different types of compensatory action are applicable based on the type or nature of the

damage incident. An injunctive relief is officially issued by the concerned judicial system as

a remedy in equity wherein cancelation of the contract is often evident. In case of punitive

damage, the remedy offered is reserved for cases wherein the involved parties have acted in a

morally reprehensible way. Punishment or sentencing to jail imprisonment is the remedial

measure applied in this case, compensatory damage claim is widely evident in cases of

breach in contractual terms and condition wherein the involved court issue an official order to

pay the party encountered the breach. Interestingly restitution is another compensatory

approach practised in majority of contractual breach cases wherein the breaching party is

ordered to pay the entire monetary sum to the other part. Remedy for liquidated damage is

agreed when the damages whose amount the parties designate during the contract formation

process (Rowan, 2012).

Referring to the case example provided it is observed that the claimant, Romanov has

suffered significant amount of monetary loss in business wherein liquidated damage claim is

applicable as a compensatory measure. Therefore, Romanov is advised to file a legal case

against the breaching party wherein the claimant party shall be paid by the other part in the

31
event of a contract breach. Romanov is hence entitled for receiving a partial money damage

award as a part of compensation of the monetary loss suffered by him due to the negligence

of the other party (Rowan, 2012).

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Conclusion
On the concluding ground in alignment with the content information the concerned author’s

effort and sincerity has been reflected. The given assignment entitled ‘business law’ has

addressed all the task requirement criteria along with developing commendable insight

regarding the English legal system and its functional approaches.

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Reference:

Baker, J., 2019. Introduction to English Legal History. Oxford University Press.

34
Hannigan, B., 2018. Company law. Oxford University Press, USA.

Gooberman, L., Hauptmeier, M. and Heery, E., 2018. Contemporary employer interest
representation in the United Kingdom. Work, employment and society, 32(1), pp.114-132.

McLaughlin, S., 2018. Unlocking company law. Routledge.

35