Impact of Company, Contract and Employment Law

SECTION 1 Nature of Legal System On Businesses

TASK 1

1. Explanation to the legal system and the difference between civil law and criminal law

The legal system of UK is much powerful as compared to other nation because whole of the power is in their hand only. It is assumed that the decisions which are taken by them is right and any of the outsiders are not allow to make a question on the law but everyone must have to follow it. If any of the legal body wants to commence any of the law, then they are needed to take final approval from Parliament House.

Civil law: It is explained as the law which deals with those laws and regulation through which rights of citizens can be protected, various offers legal remedies can be given to clear any sort of disputes. Also, it covers different law under it such as contract law, business law, family law and many more.

Criminal law: It is the body of law which deals with the section of crime. It is one of the law which helps to protect any of the innocent people from harmful activities or otherwise endangering to the property, health, safety, and moral welfare of people inclusive of one's self.

2. Explain different sources of law

There are two kinds of sources viz. Primary and secondary having their own sources which can be used to extract information about law.

Primary sources- The first-hand information contained in the original form without changing its structure or details are called primary sources. Same are as follows:

• Case law- The case judgements which have been provided by the judges in the courts including the issues, facts and decision. UK courts follow doctrine of judicial precedent according to which the future cases are decided on the basis of previous case laws (Howard, 2013). This means that if a case have similar situations then no new law should be used in finding a solution.
• Legislation- The statues in the UK legal system are necessary for every individual to abide by as they govern their acts and conduct. It defines the offences and the punishment which can be provided on occurrence of such offence. It is passed by the member of parliament. The base of UK legal system is legislation.
• EU commission- It issues directives in the form of law which are applicable on the member countries of EU commission. These directives are important for carrying the trade in European countries without any hindrance and by charging the tariffs as provided in the directives (Horspool and Humphreys, 2012).

Secondary sources- The information extracted from the primary sources which has been changed for making it more understandable is considered in secondary source. Some of the examples of it are as follows:

• Legal encyclopaedias- Halsbury's law of England and Wales is the authentic source from which the laws can be understood. It has been designed in a comprehensive way with the inclusion of expert advice.
• Parliamentary and non-parliamentary publications- These are the debates held and speeches of the members of parliament by mentioning the key points regarding the laws that have been implemented in the UK. On the other hand, non-parliamentary publications include the reports prepared by the departments of the government which are posted on the official websites so that general public can access them (Olle, 2013).
• Law commission- A commission was constituted by the UK government to overlook the the current laws which are applicable to the whole UK. The recommendations of the committee are independent of any factor. The report is presented to the interested parties and other experts for receiving their suggestions as well.
• Textbooks- The books which are written by different authors showing their different interpretations along with real case laws which have taken place in the past reflecting the applicability of the law in particular situations.
• Law journals- These are the source in which amendments in the current laws are included which are provided to the practitioners practising the law. These can be provided for a particular area or as a general.

3. Identify the roles of the government in law-making and show the application of statutory and common law

Government has different roles in variety of sectors in a country. These are exercised for the betterment of the society in which it is operating. It has three role in UK law making which have been provided below:

Executive role- In this, the Queen, Prime Minister and rest of the cabinet ministers have the role to ensure the enforcement of the statutes made applicable in the country (Wehner and De Renzio, 2013). It is the first job in which all the plans, policies along with statutes are overseen by these authorities so that their implementation is done effectively. This make sure that every individual is following them leading to improved justice and legal system in the country.

Legislative role- As the name suggests, the laws are formed by the members of the parliament by passing the bills through the fixed process. The house of common and house of Lords can present bill in front of the parliament or the queen so that they can be enacted by receiving the royal assent. The bill passing procedure is as follows:

• First reading: In this stage, the bill is presented before the parliament as a formal introduction.
• Second reading: After the bill is presented, it put forward for the discussion between both the houses of the parliament. This is done to highlight the key points in the bill.
• Committee stage: In this stage, the bill is examined by a standing committee formed for the purpose of reviewing the bill for making amendments (Procedure for passing of a bill, 2019).
• Report stage: The report prepared by the committee is provided to the House of commons within two weeks.
• Third reading: In this stage, modifications are subject to the approval of the both the houses of parliament. The draft bill is reviewed for the last time.
• Royal assent: This is the final step in which the royal assent of the queen is received for enacting it as a law throughout the UK.

Judiciary role- This role gives the power to the government officials for establishing courts as well as tribunals as a part of the judiciary system. The main motive is to provide sufficient number of courts with individual jurisdiction so that justice or decisions can be made promptly. This leads to increase in the efficiency of the legal system in UK.

The courts in UK use different kinds of laws which have their own applicability and scope. The same have been discussed below:

• Common law- It means the law which emerges from new decisions made by the judges, courts and tribunals. It is based on doctrine of judicial precedent and is also known as case law or judge-made law. The underlying fact is that it is unfair to treat the same facts in a different manner in different circumstances. Courts use this to decided the factual situations having the same facts and issues. In other words, it is future cases are decided on the previous cases (Gillespie, 2013).
• Statutory law- It is the main base on which the legal system of a country is formed. These are provided in written form and enacted by the parliament of UK. The legal authority to present the bill in the parliament is with the members both the houses. Also, every citizen of the country is required to adhere to them in order to work lawfully. It represents the will of the legislature and is more of a command which every person has to follow and abide by. The statutory law encompasses the rules for regulating the society and is made considering the future cases.

4. Explain the different between legislation, regulations and standards

Legislation- It is the statutes which are enacted by the supreme authority i.e. Parliament in UK. It is compulsory to follow without breaching any of the provisions. The impact upon a business is that additional financial burden can arise due to non-compliance.

Regulations- These are the specifications or rules according to which the administrative work is done. It is also mandatory for the organizations to follow. Without adhering to this, hefty penalties may be imposed on the entity (Difference between Legislation, regulations and standards, 2019).

Standards- These are used by the corporations as a base against which the actual output is measured to overcome the difference. It can reduce the wastage and increase product or service quality.

5. With the use of examples, show the impact of contract law, employment and upon a business

• Employment law- It regulates the appointment of the candidates through interview and other methods for choosing the best employees. It plays a significant role in a business enterprise because it governs their employment rights such as leaves, termination, resignation, and many more. It has impact upon the working of the organization. It is designed to protect the rights of the employee and extends to almost all the aspects of the employer/employee relationship. There is a compulsion for organizations to follow these laws in order to provided protection to the employees. For example, an employee has not been given his employment rights this can impact range from higher job satisfaction, happier staff, enhanced productivity, less disputes and stress and many more.
• Contract law- The impact of contract law is huge on any business irrespective of its size, nature or type. These are prepared by including all the possible clauses as decided by the concerned parties. It should be a valid contract by containing all the essential conditions. Mainly, the it is formed between a seller and a buyer for transacting goods or services. It comprises of the details such as goods or services described, clauses for payment, amount, mode of payment, cancellation etc. Acting against the terms of the contract renders it revoked. The effect of such action is negative which hampers the business activities (McKendrick, 2014). Apart from this, terms should be stated clearly and in case of any ambiguity, there could arise financial obligations which is actually an additional burden on the whole organization. The impact could be the any amount specified in the contract which is paid in advance will be forfeited by the party who has received it. Furthermore, the provisions of the act govern the rights and duties of the agreements between the businesses which facilitate the free flow of trade.
• Copyright law-It is one of the law which explains that how rights of any of the person or organisation can be protected. The main benefits of copyright law on business organisation is that it doesn’t allow any of the unauthorised person to misuse the product. In short, the impact of copyright law is that it gives developers and publishers the rights to control unauthorised exploitation of their work.

6. Provide a critical reflection of the UK legal system using examples to demonstrate the strength and weaknesses.

English legal system in UK has been modified in order to maintain the quality and to update the previous acts which have not been changed from many years. It has a consistency in the legislations but the judiciary system fails to provide appropriate judgement due to loopholes present in the acts. Therefore, it should change the legal structure to make it more effective and to overcome the shortcomings by removing them. There are many acts such as Companies Act 2006 which have not incorporated the changes according to the current scenario. This shows the inefficiency of UK's legal system.

TASK 2

1. Explore different types of business organizations in both private and public sector

A business can be established in any form based on the requirements of the owner and advantages/disadvantages of the chosen entity type. These have been explored as follows:

• Sole proprietorship- It is an unincorporated business owned and managed by a single person who is termed as sole proprietor or sole trader. The law does not distinguish between the entity and the owner. This means that there is no requirement of registration. Furthermore, it is treated as an extension of the owner and the liability may extend to personal asses. In simple term, sole proprietor is personally responsible for the debts and liabilities of the business. The individual who are interested in starting a small business to be controlled without the intervention of the any other person. It can be formed simply by registering the owner (Abdulsaleh and Worthington, 2013).
• Partnership firm- It is an association of the people who are called partners to form a firm, carry the business lawfully and share the profits of a business. It has main features which should be there in order to incorporate a partnership firm. It is not compulsory for it get itself registered however, it can have benefits of the act after registration. A partnership deed is executed between the partners which comprises of terms and conditions as decided by the partners. The liability is shared jointly and severally and a partner can be held liable for the acts of another. Deed is the evidence by which it is witnessed that a partnership firm has been established.
• Limited company- Law has identified company as an artificial entity which is different from its members. It is the feature of distinct or separate legal identity which gives powers to the company to acquire and sole properties, open own bank account, enter into contracts on its own. This is entirely the matter of the corporate and there is no involvement of the members who are known as shareholders. Their liability is restricted up to the amount unpaid on the shares held by them in case it is limited by shares. There could be another types of liability which is to the extent of guaranteed amount so specified in the MOA which is to be contributed at the time of winding up. It is formed by filing application form in IN01 along with number of documents with the Companies House (Companies Act,2006).
• Limited Liability Partnership (LLP)- The hybrid form of a company and a partnership firm is known as LLP which combines the features of the provided entities. The members are called partners who have limited liability just like the shareholders in the case of a company. Furthermore, the management and structure are also flexible which can be changed as per the ease of the partners. Generally, the professionals like CA, CS, lawyers opt for this type for carrying out their business.

2. Advantages and disadvantages of different legal structures.

3. Explain how the business organizations are managed and funded

• Sole proprietorship- The organization is simple and generally, the size of business is smaller. This is why the management becomes easy which is done by the sole trader all alone. Decisions are taken and implemented by the owner however, family members or other individuals can be appointed for carrying activities on daily basis that too on the instructions of the sole proprietor. When it comes to funding the business, there are very few options left to raise funds. The business is funded either with the personal saving or investment or by obtaining loan from banks or financial institutions (Council, 2012).
• Partnership firm- Partners are the people who form a partnership firm hence, they are the individuals who have the authority to make decisions, enter into contracts, take actions etc. with an objective to apply to the firm. Apart from this, every partner is required to share the liability jointly and severally. In terms of financing, it has number of avenues from which the funds can be raised. Some of these includes bank/financial institution loans, contribution by the members to the capital of the firm, venture capital, loans from friends etc. The position on fund raising is better than any other types.
• Limited company- It is an artificial person which cannot act, make decisions, manage the daily activities etc. Therefore, it appoints directors who act as an agent of the corporate and carry their work according to the directions and instructions of the company. They are provided certain rights, duties and powers as per the Companies Act and the Memorandum of the body corporate. They hold the decision making power and every other possible powers which are exercised to benefit the company. The main sources for raising funds are share capital and debenture. Others are borrowings, retained earnings, loan from creditors, loan from banks or financial institution, deposits, and many more. It has variety of options for raising funds which is an attractive feature of this type of organization.
• Limited Liability Partnership (LLP)- It is administered by the partners who have established it (Wilson, Hayward and Wilson, 2017). The activities are handled by the partners by making decisions which are applied for meeting the objectives. In addition to this, the sharing of liability is similar to that of a partnership firm. Funding for this type of entity is not that difficult as it has number of sources such as loan from bank or financial institution, contribution by partners, borrowings from friends or relatives, crowd funding and many more options can be used for this purpose.
• Social Enterprises- These are those business organisation which performs business activity at a greater platform where main motive is to help the society and people at large. The main source of collecting the funds in social enterprises is through public donations and even government funding and many more. Directors, Shareholder have the responsibility to manage the work of an organisation.
• Public corporation- This are the organisation which is incorporated with the special aim and objectives. The main decisions are being taken by the government and shareholders of a company who plays the significant role. For funding, it can easily trade the share in share market, government agencies provide the loan in it.

SECTION 2 Legal Solutions to the Dispute

1. Recommend legal solutions for resolving a range of disputes with the use of examples

Explanatory Memorandum ToHealth and Safety Act 1974.It is necessary for every business organisation that they must provide all of the necessary payment to their employees while working with the organisation. They are needed to follow the rules and regulation of health and safety act 1974 which explains about the rules related to safety of employees. as memorandum is prepared for next board meeting it is explained to company that that employee should be provided safety equipment while working in hazardous industry. Also, there is the requirement to make different medical facilities to the employees if something wrong happens. Company should provide the leave to female employees who are going to the period of maternity

Charlotte is working as accountant in the finance department of a company now her friend has asked to work her as a bookkeeping while she is free. As per the employment law it is necessary that person should not work in two different place at a single time because it might leak the internal information from one organisation to another. But, there is no contract between Charlotte and her company that she must work for a single company only. It means that Charlotte can easily work in her friend’s firm as a secondary option to earn the money.

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CONCLUSION

From the above report, it has been concluded that legal system in a country is a set of different types of laws which are applicable on the individuals, also the organizations which are part of the country. It is categorised into various categories having their individual applicability and scope. Business law is a part of legal system which governs the commercial transactions. It is necessary to be aware about the legislations and rules which are applicable to a particular entity and for this purpose number of sources can be accessed. Furthermore, common law and statutory law have different application which should be understood for using it in the courts with a view to get desired decision. Apart from this, impact of company, employment, contract and all other major laws should be evaluated for determining its impact upon the business. Also, different types of organizations have been explored along with their management and funding in this report which may be beneficial for a businessperson. Lastly, dispute resolutions methods have been explained for getting quick solution to legal matters without the intervention of courts.

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