The scenario of this report is based on legal practices and governmental approaches which are important to run a business. These kinds of practices consider contract law, employment law, person business lawsuit and so on.
- Evaluate the basic role of legal system in the context of Country Pine.
- Analyse the potential influence of law upon Country Pine.
- Explain appropriate legal solutions to business problems of Country Pine.
- Discuss the legal solutions based upon alternative legal advice.
Business and Commerce laws are the regulatory body of performing trade and sale of goods in the market. It is covered by civil laws or we can say that it is a subsidiary branch of it. Matters related to business and trade are conducted by these laws. It is essential to abide by the business laws of the state in order to regulate a business. Moreover, the business statutes are obligation over those who are conducting trade and commerce. These laws were originated from historical time, as the trade was the only way to survive in the civilisation. Moreover, civilisations were established in the course of trade and business. Economy of a state is depend upon the trade and business, how much they earn through it and where they stand in the market. In United Kingdom business and trade are the primary source of strengthening the economy as it plays a major part in the calculation of GDP. Also the business sector is growing immensely, so to regulate the functioning of company it is essential to follow business laws. In the given scenario Country Pine is an emerging furniture organisation and they wants to expand their business. In order to do so they have incorporate themselves into a limited one. For such conversion they are going to face some legal and business related problem. Business Future, a consultancy company, is helping by providing solution to the Country Pine. This report is a complete study of business laws.
P1 Sources of law
There are two ways in which laws has been described, Civil and Criminal Law. As discussed above business laws comes under civil liabilities. These laws are made by law making body. The sources form which the laws are being created is divided in two parts, Primary and Secondary. Primary sources are such which includes the customs of the said area, constitution , international conventions, treaties etc. whereas Secondary sources includes the precedents and judgements of the Courts, also such texts which provides explanation to the Primary Sources.(Pepper v Hart (1993, HL)
In United Kingdom laws are formed by three sources, the European laws, the legislature and the Courts. European laws are the most significant source of laws as they act as a parent to all the statutes that has been enforced till now. These laws are formed by a cluster of treaties, regulations, directives and decisions. Treaties are such legal obligation which binds two state for certain agreement made between them. It is a main source of trade and business laws. When two organisation from separate states wants to do trade and business then treaties are the most important thing that needed to be followed. Apart from it there Regulations and Directives are made by state to perform those acts that are mentioned in the statues. European Unions is a political and economic union which has 28 members. Its main purpose is to ensure legislation. A European Commission is established under it which act as an implementing body of the laws related to business and policies. It was formed under Communities Act 1972.
Business laws are implemented by EC and it is an obligation for the organisation to work according to it. For the purpose of starting a new organisation it is essential to decided in which sector an organisation is going to regulate their business, Private or Public. It is conspicuous that an individual shall work in a private sector as the public sector is run by the state authority. The functioning and structure of the organisations are entirely different in both of these sectors.
In order to expand the business it is also necessary to have an idea of what type of liability partners are going to share in the organisation. As there are three kinds of liability, Unlimited liability, in which an individual is liable for the payment of debts, profits, loss and paper works unlike a Limited and Limited Liability Partnership. In this type of organisation the duties and liabilities are defined for its partner, also they are responsible for their acts and not of others. The liabilities are divided according to the amount they have invested in the company. (Fisher v Bell (1961)
In the given case Country pine is expanding their business. They are functioning as a sole trader but for the expansion they want to go limited. So for such shifting they have to comply with the provision of Companies Act 2006. According to the Act it is necessary for the company to construct a Memorandum of Association, which defines the detail information about the Capital of a company and its Shareholders. Moreover in order to operate the internal function of the company an Article of Association is formed. It is mainly consist of how the Directors are appointed in a company and their duties and liabilities also its employees.
For expanding business, Country Pine must register their organisation by the Registrar of the companies under Companies Act 2006. Also they have to work according to the rules and regulation given by the government. Converting into a limited company is a great initiative to earn profits but for such earnings they have to abide by he laws that are mentioned above otherwise the company will be treated as invalid for business. (Adler v George (1964)
P2 Role of government in the law-making
Laws are framed by the governing entity of a certain region. A government is comprise of the legislature, the executive and the courts. The legislature is responsible for the initiation of statutes. Executive is obliged to implement the laws and the courts acts as a guardian of the constitution and other laws. Also courts perform judicial activism if the state fails to perform their duties. As discussed above, the legislature act as primary source of law so it is evident that they are solely responsible for enacting the laws. In United Kingdom, legislature is comprise of the House of Lords and House of Commons. These houses passes a bill which becomes an Act through a process of discussion and debates in the Parliament.
A bill is generally of three types, Public, Private and Hybrid bill. A public bill is made to enforce laws upon the public as whole where as in Private Bill it influence the interest of people individually. In a Hybrid bill laws are made and enforced publicly but it affects the interest of every individual. It is up to the legislature to propose such bill which is applicable for a particular situation. A model draft bill is introduced in the legislature which deals with the concerned changes regarding a suitable circumstance. The bill which becomes an Act is implemented by the Executive entity of the Government.(Smith v Hughes (1960)
For passing a Bill it is essential to comply with the administrative and statutory provision of the parliamentary law. A Bill is proposed in the house of commons in its First Reading for the introduction of the facts that are mentioned in it. In the Second Reading, a debate or discussion is done over the applicability and implementation of the laws also to know the negative aspects of passing such Bill. After the completion of these two stages it is then transfer to a committee which makes a report regrading to the Bill in its Report Stage. It is then transfer to the legislature again, for the further discussion. The main purpose of it to make changes or amendments if there is any. A complete Bill is then produced before the Queen. After getting the Royal Assent a Bill becomes an 'Act of Parliament'. This is how laws are made in United Kingdom. It is essential to follow the procedure in order to enforce it upon its people.(Royal College of Nursing v DHSS (1981, HL)
Laws are an essential factor of a civilised society. Also it makes easier to perform functions that are assigned to the people. Laws are enacted for a particular purpose such as Employment laws regulates the act of employment. Due to which there is diversity of laws. Every matter is regulated by a different law, so it has increase the ambit of its implications. There are certain negative and positive effect of such diversity. As it is easier to regulate specific matter with the provided statutes it has also increased the complexity of laws.
Laws are made by the help of its sources, sometimes it is helpful and most of the time it is not. As the sources are depend on the Customs of the particular region it is not necessary it will remain same for centuries. Necessities of individual is increasing on daily basis so it is tough to make laws according to the customs which is according to historical period. Also it is difficult to form such laws which do not have any existing primary source such as laws related to Information and Technology. Considering secondary source of laws it is not always reliable and not answers can be found in these types of sources. So it becomes quite impossible to make laws according to it.
Constitution of United Kingdom is not a codified one, so it becomes difficult to interpret the laws. The states are bind in course of treaties and they have their own courts and statutes to regulate the functioning of the society. Common laws are the source of creating a new statues which means the justice is given upon decided cases and precedents. Sometimes the situation are new so it becomes difficult to provide justice. The major drawback of English legal system is that the laws are no codified which becomes difficult to provide justice. Moreover there is no guideline according to which a court provides its judgement. The legal structure of UK becomes complicated due to the incompetency to interpret the laws.
P3 Impact of employment laws and contract laws
In this modern world wrongful activities are increasing day by day for gaining maximum income in order to become a most wealthiest person of a nation. Business law is all about necessary norms, beliefs, rules and regulations in order to create a nation free from any wrongful conducts for promoting economy of a nation. Therefore, legal bodies are playing eminent role in enacting useful norms or procedures for encouraging equality amongst the society. Corporate world is following all the terms and conditions which is set by governing and legal bodies as well as apply necessary acts such as; employment and consumer protection acts. According to given case study Business future is engaging in promoting new start-ups towards expansion process in order to generate maximum revenue.(Sweet v Parsley (1969, HL) (Alternative dispute resolution (ADR), 2017) Thus, Country Pine is a sole trader involved in designing qualitative furniture for establishing their positive image at marketplace by launching creative products. As per given scenario company is involving in expanding their business for gaining maximum benefits by satisfying clients. In order to establish new outlets company needs to hire best employees for accomplishing business activities in proper manner. Proper management of staff members are indispensable for company success because handling of business is depend upon them only. Company is focussing on implementing various norms in order to facilitate employees as well as consumers. Some of the major acts of workers are described as follows:-
Health and safety act 1974:- According to this policy, managers of company needs to focus on various necessary elements for offering best facilities to their staff members so that they can continue the business for longer time period.
Apart from this, some other acts which is included in this are; Equal wage act, Equal remuneration act and consumer protection act. Hence, it has been understood that manager of Country Pine needs to consider above explained factors for enhancing the company performance by encouraging employees towards set objectives or goals. (Bagley, 2010)
Contracts are the most essential element in performing a business. It is comprise of terms and conditions on which parties are going to perform business. These terms are binding upon the parties who enters into it. Non performing of such duties or liabilities will result in the breach of contract and it is punishable under law. English law of contract are responsible for regulating the laws related to contracts in United Kingdom. It is consists of some basic elements which has to followed unless a contract would be invalid. For a valid contract there must exists an offer, acceptance and consideration. An offer is the proposal of doing an act. It can be to a specific person or proposed to the public in first come first service basis. The objective of a contract is necessary to be a valid one that is it must be in accordance to the law. Also there must exist an intention to the contract without such it is an invalid contact. To every offer there must exist an acceptance which should be without any inducement. An acceptance is made with a consideration, generally it is in the form of money. A consideration should not be prohibited by law. Overall, a contract is a promise which is brought with some amount. (Bodie, Kane and Marcus, 2014)
Instead of contraction responsibilities there are some authorities which is granted by employment rights acts 1996 like; right against discrimination, redundancy and so on. However, as per the section 230 sub-clause 3 of specific act an employees is responsible for having minimum wages and must acquired sick leavers. Apart from this, same decision was taken in the scenario of Uber taxi, Aslam vs Uber BV in which supervisors get sued for not offering immunity to their subordinate which is authorized by given section.
With respect to the contracts employees are employed for a contract of service. It is their responsibility to obey the guidelines given by their employer. But it is not essential to follow such which is illegal (Morrish v Henlys Ltd.). It is mandatory for an employee to perform his duties according to the contract of employment, otherwise they will be responsible for its breach. Similarly, employers has certain duties also, but more of it is discussed in certain statutes. (Crane and Matten, 2016)