Unit 7 Business Law Assignment Sample

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Business Law Assignment 

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TASK 1

As a paralegal in the firm Legal Advisors Association, the following is drafted advice for the small companies on the legal system and the important legislation that they are required to be acquainted with. Hence, the following is a piece of advice for the companies.

a) Sources of law and compliance of organisations

Discussing the various sources of law in the United Kingdom, it can be stated that the sources can be categorised under two main sources of laws in the UK that is the primary sources and the secondary sources. The primary sources consist of the legislations, common lawthat is derived from case laws. Legislations are the enacted and codified laws that are in the form of Acts, statutes and regulations. Whereas, case laws are the judge-made laws that are decided by the judicial body of the nation and these judgments are binding on the subordinate courts and act as judicial precedents. Common law in the UK is derived through the customs of the nation and the case law instead of Acts and statutes. The secondary sources of law include the commentaries of scholars and experts and also the opinion of the judges. It also includes law reports, reviews and text material of law.

Discussing the laws that are required by the organisations to comply with is the Companies Act 2006 that provides for the registration of the companies and all the provisions required by the companies to follow in respect of the duties of the directors,the process of registration and termination (Legislation.gov.uk. 2021).

b) Lawmaking process and effectiveness of English legal system in terms of reforms and developments

The law-making process of the UK is carried by the legislative body of the state consisting of two houses namely the House of Commons and the House of Lords where the House of Commons is the lower house and the House of Lords is the upper house. The law is stated in the form of the bill and is passed in both houses in stages and finally receives royal assent. Hence, the bill is turned into the Act after undergoing the process in various stages.

The court applies the statutory and common law in determining the merits of the case and deciding it accordingly. The court first relies on the statutory law for the findings of its judgment and in the absence of any statutory law or if the statute is silent or ambiguous, the court relies on judicial precedent that is the common law.

Further discussing the effectiveness of the English legal system, it can be stated that the English law along with the UK legal system is an effective system and flexible to adapt to the changing needs of the society. The process of arbitration adopted by the legal system is a part of reform and development which has proven to be cost-effective (Otsuka, 2017).

c) The three fields of law having a potential impact on business

The three fields of law that is company law, employment law and contract law have a potential impact on the business in the UK as all the three fields of law apply to the organisation in terms of different aspects. To illustrate with examples, it can be stated that company law is applied as there is the application of the Companies Act 2006 in the formation and running of the organisations. Employment law is applied as the organisations are required to abide by the provisions and rules of the Employment Rights Act 1996, Health and Safety at Workplace Act 1974, Minimum Wage Act 1998 and Equality Act 2010, etc. (Kraakman, and Armour, 2017).

Discussing the difference between legislation, regulation and standard the following table can be considered:

Legislation

Regulation

Standard

     

Legislations are the written laws passed in the form of Acts and statutes.

Regulations are also written laws in the form of rules to abide by.

Standards are the minimum requirements to be followed in the business.

Legislations are passed by the legislative body that is Parliament.

Regulations are not passed by the Parliament, rather created by other delegated authorities or administrative bodies (Coulding, 2018).

Standards are drafted by the organisations themselves consistent with the legislation.

Example of legislation is Companies Act 2006, Employment Rights Act 1996, etc.

Examples of regulation include the Minimum Wage Regulation 2015 that requires the payment of £8.20 to £8.36 per hour [Regulation 4A(1)(a)].

Examples of the standard include the standard to protect the environment and reduce the pollution in the operations.

d) Critical analysis of English legal system

On critically analysing the English legal system, it has been observed that the law is reactive and not proactive. This means that the judicial body creates the law keeping in mind the situation of one person that is the law is developed on the principles only in the light of particular specific situations. Another criticism of the English legal system is the burden of the judicial body that makes the delivery of judgment a long and time-consuming process. Reference of the case King v. Daltry[2003] EWCA Civ 808 can be taken in which it was held by the court that there are unnecessary delays in the delivery of judgment by the English courts and the reason for this is the number of cases pending (Hannigan, 2018).

e) Legal formation of different types of business organisations

Different types of organisations are legally formed under the Companies Act 2206. As per the provision of this Act, there is the formation of a limited liability company, sole trading company and partnership where the required procedure is to be followed. The formation of limited liability companies legally gives it a separate legal entity where the company is held liable for the debts.

The sole trading company holds the owner liable for the debts and the liability of the owner in this type of business structure is unlimited. In partnership, the legal formation of the firm makes the partners equally liable for the debts and liabilities and also the profits unless there is a contract to the contrary.

f) Management and funding of organisations

The management of different organisations requires funding and there are several ways by which an organisation can be funded. The different ways of funding the organisation and raising the capital are through:

  • Crowdfunding: This method involves inviting a large section of the public for funding in the business. A large section of the public is approached through various social media platforms and encouraged to invest in the business (Rossi, et. al., 2020).
  • Self-funding: Under this process, the owner raises the funds on his own through his savings or asking for funds from his friends and relatives. The owner may also raise money through business loans taken from the banks.
  • Shares and debentures: The organisation may also raise funds by issuing shares and debentures among the shareholders of the company. debentures are the loans that are issued by the company to the holders in return for some security upon which the company pays an amount to the holder as interest (Hossain, 2019).

Discussing the advantages and disadvantages of different business structures, the following table can be taken into consideration:

Business structure

Advantage

Disadvantage

Sole trading company

· The advantage of a sole trading company is that the registration process is easy and simple.

· This structure is subjected to low tax rates.

· The owner has full control over the business activities (GOV.UK. 2021).

· The owner shall be liable for the debts and liabilities.

· The liability of the owner shall be unlimited.

· The business structure does not have a separate entity.

Partnership firm

· The formation of a partnership firm is easy and simple.

· The liability is distributed among the partners equally.

· The death or insolvency of one partner may end the life of the firm.

· The firm has no separate legal entity.

· The partners of the firm have unlimited liability and hence, they are personally liable for the debts.

Limited liability company

· This business structure has a separate legal entity.

· It has perpetual succession and a common seal to be used as a signature.

· The liability of the directors is limited up to their share.

· The registration process is complicated.

· It requires the filing of audits and reports annually.

· The structure is subjected to corporate taxes (Great.gov.uk. 2021).

TASK 2

Company law

As Ben wants to start up a new business in the UK, it is advised that he start by registering as a limited liability company under the Companies Act 2006. Though there are other options available as well regarding the business structures under the UK company law, the best option for Ben is to start as a limited liability company as he is willing to do the business overseas.

The different models available to Ben for doing the business of organic seeds overseas are a sole proprietary company, a firm in partnership and a limited liability company. the description of the above-mentioned three business structures are as follows:

Sole proprietary company: This business structure includes the entire business under the control of one owner. The business and functions thereunder are controlled by one owner. The registration of this business structure is done under the Companies Act 2006 of the UK and this business structure falls within the meaning of unlimited company as the liability of the owner shall be unlimited and he shall be solely liable for the debts and other financial liabilities of the business.

The advantage of this business structure is that the formation of the sole proprietary company is easy and very simple. It does not require the filing of audit and annual reports. Further, it also gives the freedom of controlling and managing the business with authority and right. The disadvantage of this structure is that it attracts unlimited liability in case of debts where the owner is held personally liable for the debts to the creditors (Milman, 2017). Hence, this business structure is not advised to Ben.

Partnership firm: A partnership firm shall be formed between different partners under a partnership deed that shall cover the terms and conditions of partnerships. The deed shall provide for the share of the partner in cases of profits and loss. But the partnership firm also attracts unlimited liability of partners in cases of financial liabilities and debts.

The advantage of this structure includes the benefit of its easy and simple formation. Further, it also gives the benefit of sharing of liabilities between the partner where one partner is not burdened with financial liability. The disadvantage of this structure is it does not have a separate legal entity that protects the partners from liability and hence, the partners to the firm are held personally responsible. Furthermore, there is no perpetual succession which means that the life of the firm shall come to an end if there is insolvency or death of any partner (Bayern, et. al., 2017).

Limited liability company: This business structure involves the hiring of other employees and staff where the working of the company is controlled by the manager or owner and the work is being carried out by the employees. this business structure is considered to be the best suited for the business to be done overseas as it protects the owner in cases of debts to limited liability only and it also provides the status of perpetual succession and separate legal entity.

The advantage of a limited liability company is that it protects the owners and directors from liability as it attracts limited liability up to the share of the director. Further, it also has perpetual succession which means that the company's life shall not be affected in instances of death or insolvency. Moreover, there is also a separate legal entity and common seal in this structure. The disadvantage of this structure includes its complicated procedure information. The company is registered under Part 2 Section 9 to 16 of the Companies Act 2006 which requires a long process to be followed for a valid registration (Mujih, 2021).

Contract law

As per the facts of the case where Alan has bought a second-hand car from a dealer stating that the car was the best running car he has sold, there is a breach of the warranty in the contract of sale as the car broke down on road causing a massive traffic jam. As the seller of the car has assured the condition of the car but the car was not up to the assurance hence, there is a breach of the warranty in the contract of sale.

A breach of warranty occurs when there is a violation of the express or implied term of the contract and thus, it is a breach of contract. It can also be stated that when the seller or the warrantor fails to give the assured warranty of the product he is selling, there is a breach of warranty under the contract of sale. Under the contract law of the United Kingdom, there is the assurance of warranty either under the express terms of the contract or under the implied term (Ojogbo and Ezechukwu, 2020).

In this case, the seller has assured the warranty of the car by expressly stating the condition of the car and calling it the best-sold car ever. Hence, the buyer Alan has relied on the judgment of the seller for the purchase of the car. Though there is the signing of the contract between Alan and the seller for the sale of the car which states that the buyer shall not be liable for any damage to the car if the damage has occurred after 24 hours of purchase, yet Alan has relied on the expert judgment and opinion of the seller for his purchase and hence, he shall be entitled to remedies as the time of 24 hours is not a reasonable time. Thus, Alan shall be entitled to the remedies available for breach of warranty under the contract law of the United Kingdom.

As per the law, there are three remedies available for Alan for the breach of warranty. These remedies are:

  • Firstly, Alan is entitled to monetary compensation for the breakdown of the car as he was assured that the car is the best-selling car he has ever made. Thus, Alan can claim damages and compensation from the seller for the breakdown of the car.
  • If the breach seems to be serious, the buyer is entitled to terminate the contract. Thus, in this case, there isa breach of the warranty in the contract of sale and this amounts to a serious breach as the car is not in the same condition as it was at the time of purchase. Thus, Alan shall be entitled to terminate the contract and can claim the amount of the car back from the seller along with damages.
  • There is also a remedy of an injunction for the breach of warranty where the party breaching the contract is restrained from making future breaches. But in this case, this remedy is not applicable and the above-mentioned two remedies are the most suitable remedy for Alan (Coulding, 2018).

Employment law

As per the facts of the case, Jane has been working in a company Channel 77 as a newsreader but she realises that she is being paid just half as compared to male employees on the same post. on a complaint made to the manager, she is given no response and hence, this is to advise Jane that she is entitled to the same salary as the male employees under the Equal Pay Act 1970. This Act was enacted in the United Kingdom on 19th May 1970 but came into force on 29th December 1975.

As per the provision of this Act under Section 1 Clause 1, it has been stated that there shall be no discrimination done in the payment of salary of the male and the female employees. the provision is read as follows-

"The provision is enacted to secure equal pay for the male and the female employees that is to say-

  • For the men and women employed in the same work, there shall be no less favourable condition of work for any one of them
  • For the work for both men and women treated as equivalent in terms and conditions, there shall be no less favourable conditions.”

Further, it is also noted that under the provisions of this Act, the claimant (Jane in this case) shall be required to satisfy before the court the following things:

  • Firstly, she has to satisfy the court that the work done by her is the same or broadly the same as compared to the other employees.
  • Secondly, the work done by Jane is of equal value as compared to the other employees in terms of decision, demand, skills or efforts.
  • Lastly, the work done by Jane is rated the same in the evaluation study as the other employees (UK. 2021).

To further under the requirements under this Act from the side of the claimant, reference of the case Shield v. E Coomes Holding Ltd [1978] 1 WLR 1408can be taken where the court held that the claimant is required to prove that there is like work done by him or her as compared to the actual comparator and this shall make them entitled to equal pay for equal work.

Moreover, it has been advised to Jane that she has been paid less in the last 3 months and thus, she is entitled to the salary indifference in the last three months. The payment of Jane was just half as compared to the male employees which is a violation of the provision of the Equal Pay Act 1970 and hence, she shall be entitled to get the full salary in the future and also the difference in salary for the last three months. It is therefore advised to Jane that she is entitled to equal pay as compared to other employees and she is also entitledto the 3-month salary that is paid less to her.

Report to line Manager

To,

The Line Manager

Legal Advisors Association

Subject: In respect of the advice given in the above cases

As per the advice given to different parties in the above part of the memorandum, it is hereby stated that the best available option to get the disputes resolved is through alternate modes of dispute resolution. As per the above advice, the parties are required to make certain claims against the opposite parties where it is recommended that the claiming parties approach the tribunals for alternate modes of dispute resolution also called the ADR methods. To get solutions for the problems outlined above, the following methods for resolving disputes are recommended:

  • Mediation: Under this method, the parties are made to decide by mutual consent.The interest of both parties is taken into consideration so that the interest of both parties can be protected and a mutual settlement is achieved. The process is carried by a third person impartial and independent called the mediator. This process is recommended as it is time-saving as well as cost-effective as compared to litigation.
  • Negotiation: The process of negotiation is between two contesting parties and under this process also the interest of both parties is protected. The parties negotiate at the point of difference and arrive at a settlement by mutual understanding. The third person carrying this process is the negotiator (UK. 2021).
  • Arbitration and conciliation: The process of arbitration and conciliation in the United Kingdom is governed by the Arbitration Act 1996 which provides provisions for arbitration and conciliation to be done by an independent third party called the arbitrator or the conciliator respectively. The judgment of the arbitrator is called the Hence, this method of dispute resolution is recommended for the above parties as this process is cost-effective and time-saving (Rajoo, et. al., 2017).

As advised for Alan in the above case, it is recommended that Alan gets the claim settled through an alternate mode of dispute resolution instead of litigation as the process of litigation is time-consuming and also costly. Through the process of mediation, Alan and the car seller can get into a mutual settlement.

It is also recommended for Jane that get her claimed settled in the arbitral tribunal instead of court as it shall be an easy and cost-effective method of settlement. The matter between Jane and her employer shall be determined in less time in the tribunal as compared to the process of litigation and hence, she shall get an increased salary and also the less paid salary for 3 months.

On comparing the different solutions for dispute resolutions, the following conclusions can be drawn:

Litigation

Mediation

Arbitration

· Costly

· Cost-effective

· Cost-effective

· In the court before the judge

· Before a neutral party called the mediator

· Before a neutral party called an arbitrator

· Time-consuming

· Time-saving

· Time-saving

· The decision is called judgment and is binding on parties

· The decision is called settlement and is not binding on parties

· The decision is called award and is binding on parties

The recommended solution shall prove to be effective for the parties as it shall save the time and money of the parties. further, there shall be healthy relations continuing between Jane and her employer despite the dispute. For Alan also the recommended solutions shall be effective as he shall be compensated for the wrong product in less time.

References

  • Bayern, S., Burri, T., Grant, T.D., Hausermann, D.M., Moslein, F. and Williams, R., 2017. Company law and autonomous systems: a blueprint for lawyers, entrepreneurs, and regulators. Hastings Sci. & Tech. LJ9, p.135.
  • Could, S., 2018. Company law. Cavendish.
  • UK. 2021. Alternative dispute resolution for consumers. [online] Available at: <https://www.gov.uk/government/publications/alternative-dispute-resolution-for-consumers/alternative-dispute-resolution-for-consumers> [Accessed 2 August 2021].
  • UK. 2021. Browse: Contracts of employment and working hours - GOV.UK. [online] Available at: <https://www.gov.uk/browse/employing-people/contracts> [Accessed 2 August 2021].
  • UK. 2021. Set up a business. [online] Available at: <https://www.gov.uk/set-up-business> [Accessed 2 August 2021].
  • gov.uk. 2021. Register a company in the UK - great.gov.uk international. [online] Available at: <https://www.great.gov.uk/international/content/invest/how-to-setup-in-the-uk/register-a-company-in-the-uk/> [Accessed 2 August 2021].
  • Hannigan, B., 2018. Company law. Oxford University Press, USA.
  • Hossain, M.B., 2019. Regulatory Issues on Raising Capital through Debentures by Public Companies in the United Kingdom. Sriwijaya Law Review3(2), pp.111-123.
  • Kraakman, R. and Armour, J., 2017. The anatomy of corporate law: A comparative and functional approach. Oxford University Press.
  • gov.uk. 2021. [online] Available at: <https://www.legislation.gov.uk/ukpga/2006/46/pdfs/ukpga_20060046_en.pdf> [Accessed 2 August 2021].
  • Milman, D., 2017. Stakeholders in modern UK company law. Sweet and Maxwell's Company Law Newsletter, (397), pp.1-4.
  • Muji, E., 2021. Corporate governance reform and corporate failure in the UK. Company Lawyer42(4), pp.109-119.
  • Ojogbo, S.E. and Ezechukwu, N.V., 2020. Shareholder Protection: A Comparative Review of the Corporate Legal/Regulatory Regimes in the UK and Nigeria. Journal of African Law64(3), pp.399-424.
  • Otsuka, A., 2017. Reforms of Corporate Governance: Competing Models and Emerging Trends in the United Kingdom and the European Union. SCJ Int'l L. & Bus.14, p.71.
  • Rajoo, S., Ramesh, S., Towers, N. and Konstantinidis, I., 2017. Law, Practice and Procedure of Arbitration. LexisNexis.
  • Rossi, A., Vanacker, T.R. and Vismara, S., 2020. Equity crowdfunding: new evidence from US and UK markets. Available at SSRN.
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