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Nelson College London

Business
Law
Contents
Abstract:.......................................................................................................................................4

Introduction:................................................................................................................................5

LO1..................................................................................................................................................6

P1-Explain different sources of law:...........................................................................................6

P2 Explain the role of government in law making and how statutory and common law is
applied in the justice courts.........................................................................................................7

LO2..................................................................................................................................................8

P3 Using specific examples illustrate how company, employment, and contract law has a
potential impact upon business....................................................................................................8

LO3................................................................................................................................................10

P4 Explore how different types of business organizations are legally formed..........................10

P5 Explain how business organizations are managed and funded............................................12

LO4................................................................................................................................................14

P6 Recommend legal solutions for resolving a range of disputes using examples to

demonstrate how a party might obtain legal advice and support...............................................14

Conclution:................................................................................................................................15

Bibliography..................................................................................................................................16
Abstract:
Business and business law can not be separated from each other. To provide a compatible
environment for business, business law was created. Greed to earn more profit can make
businessmen do unethical activities. These activities victimize many parties and hinder the
business environment. To prevent these unethical happenings, business laws are compulsory to
form, direct, or winding up of any business. This report discourses the exploit of the United
Kingdom in shaping business laws. Furthermore, this report will discourse different kinds of
business laws and their affiliated sectors.
Introduction:
The primary motto of law is to make life more compatible. Laws are created to make humans
more disciplined and sophisticated. Law creates an understanding between government and
people. Governments keep the harmony of their states by laws. This report discourse the English
law and its influence. English law is feasible in England and wales. As businesses are conducted
by humans, businesses also have to observe some laws. Those laws are called business law.
Business laws also will be discourse here.
LO1

P1-Explain different sources of law:

I am working as a paralegal in Nelson Solicitors. So this is necessary to know about every
aspect of law. Different sources of law are given below:

Legislation: The author of the law is the United Kingdom legislator. The process of
establishing a law is done by parliament. The United Kingdom parliament holds the power to
pass a law. The United Kingdom parliament is a composition of two parts and these parts are
called houses. The House of Commons consists of 650 members of parliaments elected by the

United Kingdom publics[ CITATION UKP20 \l 1033 ]. The House of Lord is known as the
upper house of the parliament. It has 778 seats. Among 778 seats, the Queen devotes 600 peers
or lord by her order. Laws that are made in the parliament is only feasible within the border of
the United Kingdom.

Common-Law: Common law is a kind of law introduced by the courts on the basis of legal
vindication. The United Kingdom is the archetype of the Common Law. There often unusual
cases come to light that cannot be solved by enforcing the existing law. When this kind of
situation occurs, courts of practicing Common Law establish compatible laws according to the
case. The United Kingdom, The United States, Canada, Hong Kong, Australia, India are
Common Law practicing countries.[CITATION inv20 \l 1033 ]

European Law: EU law or Europian Union law is a body of law that is feasible within 28
members of the Europian Union[ CITATION All20 \l 1033 ]. It is established by Europian
Union. As Brexit happened at 23:00 GMT on 31 January 2020, the discussion about the
feasibility of EU law in the United Kingdom is still running.[ CITATION BBC20 \l 1033 ]
Before Brexit, the UK was also the enforceable field of EU law. EU law was created to develop
the relationships among the member countries of the Europian Union and to keep harmony.
These are the archetype of most of the law in the United Kingdom.

P2 Explain the role of government in law making and how

statutory and common law is applied in the justice courts.

The United Kingdom is democratic. Everyone here is bound to obey the law and these laws are
established as an act of operating the country by the government. In the present day, 36 laws on
average are established every year in the united kingdom. In the present day, 36 laws on average
are established every year in the United Kingdom[ CITATION Com20 \l 1033 ]. The
government introduces a new law before forming to the parliament. The way of establishing a
new law after introducing to the parliament is given below:

 First of all, the new law is proposed which is prepared by civil layers instructed by the
government. This process is called a bill.
 First reading: The bill is read to the house of commons.
 Second reading: The bill is discussed at this phase. MPs vote for the bill to be established
or not.
 Third reading: The bill is further discussed more properly
 If the majority of the vote stands for establishing the bill then the bill is passed in the
parliament.
 After passing by both houses, the bill is sent to Queen for Royal Ascent. After the ascent,
the bill becomes the act of theUnited Kingdom.

This is the process of making law in the United Kingdom.

Application of common law: Common law is created by the judges in the court on the basis of
similar situations or acts to solve unusual cases. There often unusual cases occur which have no
solve according to the existing acts. Commos law is a written law in order to solve the case
established in the court by the judge.
Application of statutory law: The statutory law is the body of law that is established by
legislation. Every person is bound to obey statutory law. Statutory law is immensely abode by
the court. In most of the cases, judges justify the case according to statutory law.

LO2

P3 Using specific examples illustrate how company,

employment, and contract law has a potential impact on
business.

Businesses are bound to abide by laws to form, operating activities, and winding up. Businesses
that violate the law are considered illegal and not considered as business as businesses should be
legal. There are several laws like employment law, company law, and contract law which has a
direct impact on business. The impacts are given below:

Employment law and its impact on business: employment law is established to ascertain the
rights and oughts of the employees. The relation between employer and employee is the main
concern of the law. The way how an employee should be recruited, proper render, safe working
environment are also a concern of the law. According to the employment law updated in 2020 in
the United Kingdom, the minimum wage of an employee in 8.72 pound[ CITATION Sta20 \l
1033 ]. No employer can pay less than 8.72 pounds to the employee who is 25 or above. If it is
violated the employer will be accused of violating the employment law and that can make his
business illegal.

Company law and its impact on business: Company is a form of business with a legal entity.
Not every business needs legal procedures to form itself. But forming a company, it is
compulsory to undergo legal procedures according to the company act of 2006. The company act
of 2006 is feasible in the United Kingdom[ CITATION Wik20 \l 1033 ]. Every aspect of a
company should be compatible with the company law. Among 6 sections of the law, there is a
fact regarding the name of the company and that is no company can be formed by the name of
any existing company. Furthermore, companies are also bound to perform annual general
meetings. That's how the act impacts on company business.

Contract law and its impact on business: In the field of business, there have been thousands of
contracts is happening every day. A contract is a promising activity among two or several
parties. Each party has to liable and respectful to the contract. To ensure the sound procedure of
fulfilling every contract, contract law was created. There often occurs violation of the contract.
This hinders affiliated parties of the contract. So they can get justice according to the contract
law. The contract law cakes parties bound to loyal to the contract. No illegal contract can be
benefited by the contract law. English contract law is feasible in the United Kingdom.
[ CITATION Wik201 \l 1033 ]
LO3

P4 Explore how different types of business organizations are

legally formed.
Businesses vary from each other according to their capital, size, field of work, etc. But every
business is liable to legal formation procedure according to existing law. These legal procedures
of different businesses are given below:

Formation of sole proprietorship business: Sole proprietorship business is the oldest form of
business yet it is the most popular business in the UK as well as in the world[ CITATION
Vol19 \l 1033 ]. One of the reasons for its popularity is the easiest legal formation.

 Select a name for the business. There are no bindings to select a name for it. The name
can be an existing name too. But they cannot use ltd. or LLP. after the name.
 It is up to the owner to register the business.
 Getting necessary documents like trade license and tax numbers
 Keeping records of the business.

Partnership business legal formation: Partnership business is formed between two or more
individuals on the basis of an agreement are contract. Every activity of the partnership business
is operated according to the way of the contract.

 The contract is the most fundamental element of this business.

 There is no binding for a contract to be written or verbal but it's necessary to be written
for the sake of operating business properly.
 Some topics are mandatory to be present in the contract paper according to the
Partnership business law 1890 in the United Kingdom[ CITATION Pra19 \l 1033 ].
 First of all the business should be registered.
  An employee verification number is needed
 License is requisite by the government to conduct a partnership business.
 There should be a bank account named by the partnership business where the transactions
of the partnership business will be conducted.

Company business and its legal formation: Among most of the businesses, the formation of
company business is most elaborate and complicated. The company must undergo every
procedure according to the 2006 Company Act to be formed.

 There are two fundamental and mandatory documents. One is the Memorandum article
and the other is the Memorandum of association. Without these documents a company
cannot be formed.[ CITATION you191 \l 1033 ]
 There should be a board of directors selected. Directors operate the company. The
directors have to be a citizen of the United Kingdom and Their name must be addressed
in the article.
 The actual owners of the company are the shareholders.[ CITATION Exa19 \l 1033 ] The
companies liability is the limited background of its share. Shareholders the right of
choosing directors and giving opinions before initiating any kind of big decision by
voting. There is no maximum price of a share. The company is bound to provide
information about their share. To sell share company has to undergo a process called
initial offering through a share exchange. But before the initial offering, it should be
registered in the United Kingdom stock exchange.
 The Memorandum of association must be signed by the initial shareholders as an
agreement to it. it is mandatory to form a company. The article of association describes
how the company will be operated.
 The company an actual address where it will be situated.

Thus businesses are formed according to its compatible law.

P5 How business organizations are managed and funded.

Business is a continuous process that needs to be operated. But there are no specific rules to
manage or operate a business. Businesses are operated according to their field of work and
product. It's a very elaborate and complicated work. In the way of operating a business, there
come many barriers that hinder the businessmen and as well as their employees. To ensure the
best outcome of business and betterment of the owner and employees, businesses have to be
managed in a calculated way. The responsible people for business management varies from each
type of business. Sole proprietorship business is managed by the owner. On the contrary
partnership, business is managed by partners or appointed director by the partners. The company
business is managed by the director board who are elected by the vote of shareholders. They are
called the management body of an organization. The business will succeed or not depends on its
direction. If they direct appropriately the business comes out as an effectual business. How
business organizations are managed are given below:

 Ensuring effective communication: As a first task to ensure sound management, There

must have effective communication among every wing of the organization. It’s a
fundamental need.

 Sharing opinions: A sound management body appreciates point of views from the
employees. And this makes the management more efficient.

 Progressive environment: They always intend to cope up with the changing nature of
the world. World is changing, so the strategy and environment also need to change to
provide best management that goes with changing world.

 Authority and Responsibility: In order to secure sound managing of an organization,

there must have a dedicated authority and responsibility towards internal and external
parties.
  4 M’s of Business: Men, materials, money and machinery are 4M of business. 4M are
extremely fundamental part of organization because organization is made up of these
4Ms. Proper direction and relation between them is a result of perfect management.

 Effectual planning and team work: Planning is a frontline task of management body.
To pursue the goal organization, they make an effectual and sophisticated planning and to
make a plan successful the believe in team work.

To manage a business in its best way, proper funding is fundamental. There is a lot of way
businesses fund themselves. The way of the funding is given below:

 Funding by own: Funding a business by own is an appropriate example of a sole

proprietorship business. Most of the sole proprietorship business owners use their savings
and other personal assets to fund their business. Self-funding is a cost-free funding
process for a business.

 Funding from relatives: When personal savings and assets become insufficient to fund a
business and the owners of small businesses often borrow money from their relatives and
friends. Relatives and friends often lend money without any intention of profit so it is
also considered as a cost-free funding process.

 Banks and financial organizations: Banks are a source of funding for almost every kind
of business. Sole proprietorships to company businesses often loan money for funding
their businesses. Banks charge for the loan by an interest rate allowed by Central Bank.
Though interest seems a burden to the organizations, in case of large amounts of funding
only the financial organizations can help instantly. So it's a great supplement for funding
businesses.

 Investors: There are many parties who show interest in investing money if they see the
probability of earning profit. Investors are an adequate way of funding.
  Shareholders: Company businesses can sell their shares in order to collect capital to
operate the company. After registering its name into the stock exchange the company
officially sells its shares to the public. the money from selling shares is used as company
capital and the capital is utilized to manage the company in its best way.

Thus businesses fund themselves. These are commonly used sources of funding businesses.

LO4

P6 Recommend legal solutions for resolving a range of disputes

using examples to demonstrate how a party might obtain legal
advice and support.
From the context, we can see David formed a new company named Startup Pty limited. He came
with an innovative idea of creating a new app named Bookface where interested people can
discourse about novels. Mr. David is the only directing body of the company. Furthermore, he
has two shareholders, his brother and sister John and Jane. On behalf of the company, they
engaged in a contract with a web developer named Susan to develop the app. They paid Susan a
small deposit of money. Susan worked so hard to develop Bookface. Just days before completing
the work Susan heard the news regarding David who sold his company to Big Blue company at a
great price. Susan tried to communicate with them but the company was officially winded up. As
a consequence, she deprived of her payment. So she needs legal advice and support. Here are
some things to do:

Court and tribunal: Susan can file a case against Startup Pty limited as they breached the
contract and violated her rights. Startup Pty limited will be accused of contract breaching ant it is
a crime to law. The owner will have to face amercement and Susan will get her deserving rights.
But the contract was made between them should have to be legit.

Legal organizations: there are plenty of legal organizations that deal with these kinds of cases
in the UK. Susan can take their help. As there was a contract, there must be the documents of the
contract. These documents are evidence. Susan has to provide these documents to these
advocating organization. The organization will help her to get her money back by advocating for
her.

Susan can take any kind of legal help to get justice. But her documents of contract has to be legit
according to the law.

Conclusion:
We cannot separate business from the law. When the question of a business's existence comes
up, there comes the question about the law. So obeying law seems compulsory to make a
successful business. So businessmen must have to concern about law and verify their business
activities to the business existing law with a view to find out they are legit or not.
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