This unit is based on a case of Country Pine which is a business entity currently run by two brothers where they seek business advice from a business consultation firm named as Business Future Ltd. the organisation need to understand different sort of legal formalities.
- Define nature as well as role of the English legal system.
- Examine the possible impact of legislation on the Country Pine.
- Provide some suitable legal solutions to the business problems.
- Define suitable legal resolutions by using ADR methods.
For the purpose of initiating a business it is necessary to work in the ambit of business law. These laws are generally civil liabilities, it is mainly comprise of statutes that has been passed by the legislature. In the given scenario Business future is a consulting organisation which is providing business advice to Country Pine, which is a sole trading company. CP wants to expand their business to earn more profit for that they need some legal advice regarding what are the legal criteria of conversion. (Mann,)
The report is critically analyse to give provide CP the information of laws which they have to comply with on such shifting and expansion. Also, some statutes regarding the establishment of an organisation has been discussed here in order to give an idea of the laws which they are going to face on their expansion.
P1 Sources of law
In United Kingdom the supreme power is of Monarch, that is Queen, nothing is above the crown. But the laws are defined from various sources, basically there are three sources which has been considered in the formation laws in UK, these are, the European Laws, the Legislature and the Court. The European laws are gest of all the statutes that are being enforced by the government. Moreover under European Laws there exist European commission which is the root organisation of function of business, implementation of laws and upholding the treaties in UK and European Union, which has been established under. The European Law is comprise of treaties, directives and regulations. ( R.A.Roberts, B.S., 2011)
In order to establish an organisation it is necessary to comply with the business laws, which has been implemented by the European Commission. The statute that regulates the setup of an organisation of companies is Companies Act 2001, according to it the company must be incorporated and registered by the Registrar of the Company. Also there are some basic elements for the formation of a company such as formation of Memorandum of association, which is consists of the details of the capital of a company and its shareholders. Also for the better functioning of the organisation it is essential to construct an Article of Association, which deals with the rules and regulation, appoint of Directors, their liabilities and lot more. After getting the assent of the registrar a certificate will be issued by him, which is a proof of that the company is incorporate under companies act and can perform their business anywhere in UK. (Kroes, Q.R. ed., 2010)
The client wants to expand their business, so it is must for them to comply with the laws and provisions as mentioned in the statute. So these were the sources of law and the procedure they must follow to become a valid company.
P2 Role of Government in law
Laws are the most important criteria which is conducted by the government. In United Kingdom the authority of passing the law is in the hand of Queen but for reaching at that place there are certain steps which has to be followed by the lawmakers. In order to become an Act of Parliament, a bill has to be scrutinised by various steps.
Bills are generally of three types, private, public and hybrid bills. Private bills affects the interest of individuals or group of people unlike a public one which has an impact on the interest of the public as whole, where as a hybrid bill is a public bill which affects the interest of individuals. About hundreds of laws are passed every year in UK. (Macaulay, S., 2018)
A bill is introduced in the parliament, by a first reading. It provide time to the members to debate and have discussion over the facts of the bill, in its second reading. After the bill has been discussed by the members it is then delivered to a committee which scrutinise the bill if there is any change in the provisions in its committee stage. A report is made regarding the bill in the report stage then it is represented in the House of Commons for voting and then it is finally placed in front of Queen for the royal assent. After getting the Royal Assent the bill becomes an Act of Parliament.
Similarly, the laws related to business has been passed by the legislature so parliament has a significant in making laws related to business. (Folsom, R.H and et. al., 2013)
P3 Influence of employment and contract law on business
Incorporating a business is the first step of establishing a company, but it includes a lot of responsibilities related to the appointment of employees and managing the relationship with their partners. In order to make it easier there are certain statutes which they have to comply. Sometimes it is mandatory and sometimes it is not.
Maintaining a relation between the employees and employer is very essential. Also there have been some rights given to the employees in order to save them from harsh treatment pf their employers. Employment Rights act is one of them. As mentioned in the scenario Country pine wants to expand their business so they have to appoint new workers but they are bit confuse regarding their profile, as according to the case of Uber taxi (Aslam v Uber) it was decided that the workers are employee so they are entitled for the minimum wages and sick leaves.
Apart from that contract plays an important role in the formation of partnerships. A contract is an agreement which is enforceable by law. In order to construct a valid contract there are certain elements which should be considered such as a there must be an offer and for that a party should accept such offer without any inducement, such acceptance is made by a consideration. It is essential to note that there must exist an intention to form the contract and the objective of it should not be prohibited by law.
Country Pin on appointing the workers should understand the nature of contract that is it should be a contract made by the worker as contract of service. A contract of service means that the worker s an employee to the company and has to work according to the instruction of the owner.
P4 legal advice for the business problem
Country Pine wants to expand their business and for that they have to convert themselves into a limited company. For now they are a sole trader, that is, the liability of the losses and gain in profits are vested upon an individual.
For becoming a limited company it is necessary for them to comply with the laws of incorporation. They have to register their company under Companies Act, also they have to comply with certain laws such as related to goods and service, employment rights, etc.
But before that it essential for them to understand the differences between the sole trader and limited company so that they could know what are the possibilities for the functioning of the organisation. For now the company is running as a sole trader which means the taxes are paid by the single person but in a limited one the partners are liable for that amount which they have signed for. And if look upon the drawbacks of being a limited company, there is lots of paperwork, as the director has to file annual taxes which is his fiduciary duty.
The process is futile but in order to expand their business Country Pine has to take that risk.
P5 Justification for legal advice
Converting into a limited company is a best option in order to expand business by Country Pine, it is a bit futile but worth taking risk. Also it provides better opportunities in brining of new investors ad customers.Basically, above solutions which is followed by Country Pine to get convert from major business problems are fully appropriate because it aids in resolving major issues in one go without harming others. Along with this, company is also taking a major step of converting company from sole trader to limited company which a major procedure ( Eren and et. al., 2012). It means, it is essential for an organization to follow major rules and regulations of legal bodies in appropriate manner by considering necessary terms and conditions. For example; usage of employment acts, consumer acts, contract laws and so on are best decision which is taken by mangers of an enterprise because it aids in making positive relations with staff members as they are consider as most indispensable factor for company success. An n
P6 Recommend solutions on the basis of country
A dispute can be solve by two ways either by court or by alternative dispute method. Filing a suit is much costlier than the other method. An ADR has major three methods Arbitration, Mediation and negotiation.
An Arbitration is such method where parties appoints an arbitrator of their own and the elected arbitrator appoints an Umpire whose decision is binding upon the parties. It is necessary for an arbitrator to act independently. Also an arbitrator can be a expert in his field.
Mediation is such process where the parties appoints a third party which acts independently to bring the dispute to an end by helping the parties to make an agreement on the issue of dispute. The third person appointed is known as mediator.
Negotiation is the cheapest and simplest way o solve a dispute. Parties are involved in the negation and no third person is involved. In a negotiation the parties comes up to an agreement regarding the disputed issue and such agreement is being upon them.
Conciliation is another method which is similar to that of Mediation. A conciliator is appointed to resolve the dispute between the parties. His duty is provide possible solutions to the dispute and for that he’s responsible, but it is up to the parties to oblige with the suggestion of a conciliator.
In order to solve the dispute of timber supply with the parties Country Pine need not to file a suit. The issue can be solved by the process of ADR. Parties can enter to negotiations if that doesn’t work then they can solve it by the method of mediation. And finally if that too was not fond that helpful then they can enter into an arbitration.
From the above analysis it has been cleared that business laws are very important in regulating and initiating a business. Also, the various sources of laws has been discussed which is the reason for enforcing business laws. A brief advice has been given to the client with the knowledge of what is best for him for the expansion of the business. Also in this report various methods regarding the resolution of dispute has been discussed.