Business Law includes all the legislation that is relevant to a business. The legal department of an organization is quite important because its function enables the business to operate in the relevant market.
You have been asked to train the newly recruited employees in your organization about its different legal aspects. Your training notes have to cover the following tasks. You will be observed and graded on the basis of the training sessions held by your supervisor. The grade that you achieve will be used for your performance appraisal. You will start by giving a background of your organization.
Task 1 – Explain the basic nature of the legal system
P1: Explain different sources of law and laws that organizations must comply with
Company law considers the legal nature of companies, the principal.
Rules develop about rules – how to make or change rules, how to determine the validity or meaning of rules. In this way, the rules become systematized.
The basic purposes of law often revolve around ideas of protection and the maintenance of the peace, which are basic functions of any state. So, laws are passed about crime and disorder and also the peaceful settlement of disputes between citizens. But as social and economic interaction develops, there will also be rules about how commerce can be skilful and how the state can care for the needs of its citizens. So, there are rules about industrial processes, land use, and motoring, and also social welfare, health, housing and education, none of which exists in primitive societies.
Though there can be bad laws and good laws, it has been argued that laws should only be recognized as having authority as such if they comply with the requirements of the rule of law. In this way, we should be able to distinguish between a system of laws and a system of terror.( Marson, Katy Ferris 2015)
The English legal system is the laws of England and Wales only. Wales is developing into its own jurisdiction today. English law has spread to many other countries, including former English colonies such as the USA, Canada, Australia, and New Zealand.
The evolution of English law starts from 1066 introduced by King William the Conqueror in England and Wales. William needed a way to establish power and order. He was the first king to produce a unified system of laws. Prior to that were complex local laws and courts governed by different systems and customs derived by ancient traditions in the area; e.g. Danelaw in the north of the country.
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The king laid the formation needed for a central system of justice with laws that would be obeyed by the people. He founded the King’s court which consisted the king and his most trusted advisors. William would travel around the country bringing his court with him to maintain authority. Disputes and complaints by the public were brought forth to him which were to be judged, resolved and gave a ruling by the court. This lead to the Court of King’s bench, which offered a beginning to a consistent approach to working with the law.
He also paved way for the start to jurisdictions when royal ministers determined the values of estates to 12 freemen under oath who become the integrated juries.
King Henry 2 also developed the jury system in 1154 and created land laws after the massive disruption made by King Stephen. This regained stability and focused on creating a single system of justice. Judges were sent out on circuits although there were only 18. The 5 stayed in London as part of benches of judges and the remaining judges are sent to dispense justice. Local law soon became national.
Decisions were recorded and published by the 13th century as yearbooks including the development of legal doctrines, concepts and methods which are the recognizable reports we see now.
William Blackstone in the 18th century, was also important being the first scholar to attempt to bring together all of the common laws. (John R. Goodwin 1982)
Sources of statutes
A stature is written law passed by an Act of UK parliament, a bill that has been approved by the commons and nearly the lord. It is the law that is enforceable in the courts. Statutes originate from Parliament. Example: Employment Rights Act 1996. (Each Act has a chapter number: ERA 1996 is ch.18. )
An Act may allow a Minister or some other party the authority to make legal provisions. Principal vehicles are statutory instruments (Ministerial Orders or sets of regulations.) (Howard, 2013)
Common’ law: law made through principles established in cases over the centuries during the standardization of law throughout England and Wales from the eleventh century onwards. (Howard ,2013)
This is also known as a case law common law made by judges and is so named because it is common to every person in every region of Britain. It is law formed on the basis of law must be followed by other courts in the future if they face a similar case. Most of the original laws concerning civil rights began in this way, such as freedom of movement. (Howard, 2013)
Law from the EU
EU was established in 1951 by the creation of the European coal and steel community (ESCS)UK joined the EU in 1973, EU law can overrule the national law. The laws and treaties of the EU have become a significant source of the British constitution. Also has been especially important for economic and social legislation. European Convention on Human Right, which has been an increasingly important source of law since it was incorporated by the Human Rights Act of 1998. (Stuart, Donald and Ole, 2013)
Misrepresentation Act 1967
Act to amend the law relating to innocent misrepresentations and to amend sections 11 and 35 of the Sale of Goods Act 1893.The Misrepresentation Act exists to protect consumers from false or fraudulent claims that induce you into buying something or entering into a contract. It also allows you to claim damages.(Brenda and Ann ,1999)
The prime aims of the Act are: to modernize and simplify company law, to codify directors duties, to grant improved rights to shareholders, and to simplify the administrative burden carried by UK companies. As if often the case with legislation, the Companies Act has been criticized by some commentators for delivering a number of reforms, without necessarily making the life of limited company directors any simpler. ( Sheikh, 2013)
An Act to make provision about the procedure for the resolution of employment disputes; to provide for compensation for financial loss in cases of unlawful underpayment or non-payment; to make provision about the enforcement of minimum wages legislation and the application of the national minimum wage to Cadet Force Adult Volunteers and voluntary workers; to make provision about the enforcement of offences under the Employment Agencies Act 1973; to make provision about the right of trade unions to expel or exclude members on the grounds of membership of a political party; and for connected purposes. (Gillies, 2004 )
Equality Act 2010
The Equality Act came into force in October 2010 and brought together all existing anti-discrimination legislation (such as the Race Relations Act 1970 and The Disability Discrimination Act 1995). It identifies several ‘protected characteristics’ previously protected under separate equality legislation; Race, religion or beliefs, gender, age, disability, sexual orientation, marriage and maternity and also strengthens other characteristics that were not provided cover by aspects of equality law. (Michael, Rebecca and Stephen,2010)
Health & Safety at Work Act 1974 also referred to as HSWA, the HSW Act, the 1974 Act or HASAWA) is the primary piece of legislation covering occupational health and safety in Great Britain. The Health and Safety Executive, with local authorities (and other enforcing authorities) is responsible for enforcing the Act and a number of other Acts and Statutory Instruments relevant to the working environment. (Jeremias,2015)
P2: Explain the role of government in lawmaking and how statutory and common law is applied in the justice courts.
Statutory Law is the term used to define written laws, usually enacted by a legislative body. Statutory laws vary from regulatory or administrative laws that are passed by executive agencies, and common law, or the law created by prior court decisions. (Rush and Michael,2006)
Common law is a body of unwritten laws based on guides established by the courts. Common law influences the decision-making process in original cases where the outcome cannot be determined based on existing statutes. The common law draws from institutionalized opinions and interpretations from judicial authorities and public juries. Similar to civil law, the goal of the common law is to establish consistent outcomes by applying the same standards of interpretation.(Rush and Michael,2006)
Equity and the common law represented opposing values in the English legal system. In its broadest sense, equity is fairness. As a legal system, it is a body of law that addresses concerns that fall outside the jurisdiction of Common Law. Equity is also used to describe the money value of property in excess of claims, liens, or mortgages on the property. Equity and the common law represented opposing values in the English legal system. ( Jeremias,2015).
Company law encompasses all of the laws that dictate how to form and run a business. This includes all of the laws that govern how to start, buy, manage and close or sell any type of business. Business laws establish the rules that all businesses should follow. A savvy businessperson will be generally familiar with business laws and know when to seek the advice of a licensed attorney. The business law includes state and federal laws, as well as administrative regulations. (Andrews,2011)
Contract law: A contract is a written or expressed agreement between two parties to provide a product or service. Most contracts are enforced by state common law. This includes contracts for employment, real estate, insurance, business contracts, or intangible items. (Andrews,2011)
When a salesperson asks you to sign on the dotted line, it is important to understand the contents of the agreement you are signing. After all, the agreement you are entering into is a contract.( Andrews,2011)
Organization of the judiciary
The Constitution created three equal branches to prevent any one branch from having too much power. England system of government rests on a separation of powers. The legislative branch, Congress at the federal level and legislatures at the state level — makes the laws. (Dervort,2000)
Executive branch departments execute and enforce the laws – the President at the federal level and governors at the state level. It is the job of the judicial branch to apply and interpret the laws and to resolve disputes that arise under them. Federal and state courts may exercise only judicial powers and perform only judicial functions, and judges can decide only cases that are before them. (Gillespie and Weare,2015)
The judicial branches of the federal and state governments operate within their respective court systems. A court is an institution that the government sets up to settle disputes through a legal process. People come to court to resolve their disagreements. Courts decide what really happened and what should be done about it. They decide whether a person committed a crime and what the punishment should be. They also provide a peaceful way to decide private disputes that people can’t resolve themselves. (Gillespie and Weare,2015)
Jurisdictions and the structures of the court
Different types of case are dealt with in specific courts: for example, all criminal cases will start in the magistrates’ court, but the more serious criminal matters are committed (or sent) to the Crown Court. Appeals from the Crown Court will go to the High Court, and potentially to the Court of Appeal or even the Supreme Court. Civil cases will sometimes be dealt with by magistrates, but may well go to a county court. Again, appeals will go to the High Court and then to the Court of Appeal – although to different divisions of those courts.
The tribunal’s system has its own structure for dealing with cases and appeals, but decisions from different chambers of the Upper Tribunal, and the Employment Appeals Tribunal may also go to the Court of Appeal.
The court’s structure covers England and Wales; the tribunal’s system covers England, Wales, and in some cases Northern Ireland and Scotland.(Gary and David , 2009)
The diagrams below show the routes taken by different cases as they go through the court’s system, and which judges deal with each.
M1: Evaluate the effectiveness of the legal system in terms of recent reforms and developments.
The legal system is the process of interpreting and enforcing the law. It elaborates the rights and responsibilities in a variety of ways. The three major legal systems of the world consist of civil law, common law and religious law.
Examples could be the Jury system, which is a legal system for determining the facts and issues within a lawsuit. The Tax system is also a legal system for assessing and collecting taxes and the Electoral system is a legal system for making democratic choices. (Partington, 2013)
The UK has three separate legal systems– one each for England and Wales, Scotland and Northern Ireland. They reflect their historical origins. The English legal system mainly deals with England and Wales.
The UK has an unwritten constitution which shows that there is no single written document that sets out the rights of individual citizens and how the Government should act. It is comprised of a variety of sources, some are written – like statutes and others are unwritten- like constitutional conventions.
Westminster Parliament is considered the supreme law-making authority within the constitution. Since 1999, there has been a distribution of powers from the Westminster Parliament to assemblies in Wales, Cardiff; Northern Ireland, Belfast and the Scottish Parliament in Edinburgh. However, other law-making bodies, such as the devolved assemblies or local authorities, derive their law-making authority from powers that they have been granted by the Parliament in Westminster.( Partington,2013)
The courts are expected by citizens to make decisions which should be implemented effectively and in a fair manner. Well-functioning civil justice systems protect the rights of all citizens against infringement of the law by others; this includes powerful parties and governments. An important feature of the rule of law is based on effective and fair judicial systems, to ensure that the laws are respected and appropriate sanctions are issued when laws are violated. Although, it is very difficult to isolate the impact of well-functioning judicial systems on security outcomes and crime control from the involvement of other stakeholders such as the police and the correctional systems. Therefore this constitutes a major limitation in making causality links between those two.(Partington, 2013)
The UK law must constantly adapt to fit modern society’s needs and standards. The process of modernization can render the dynamic, influential and internationally respected parts of the UK law. Significant developments of the law have resulted in radical statutory reforms that concern transparency, accountability, prevention of abuse and deregulation of UK company law. (Emerson,2009)
Constitutional reforms Act 2005
The Constitutional Reform Act 2005 was an Act of the UK Parliament that was divided into three parts. The first reformed the office of Lord Chancellor, the second created and set the framework for a UK Supreme Court and the third regulates the appointment of Judges. (www.legislation,2017)
Legal reform 2005
The House of Lords Reform Act receives Royal Assent. It introduces the principle of resignation from the House of Lords and allows for the expulsion of members in certain specified circumstances. Bills and Legislation set out the proposals for new laws and plan to change existing laws, that are presented for debate before Parliament.
Keep up to date with the progress of current and draft Bills before Parliament; read the full texts of Acts of Parliament, and find out the details of delegated legislation that change laws under existing Acts. (www.gov,2017)
The impacts of the recent reforms and developments
Company act 2006
There will potentially be some costs arising to any companies who had been planning to use a ‘cancellation’ scheme of arrangement but now choose to revise their takeover plan. These costs will be a mix of internal staff time and are associated with obtaining external professional advice on revisions to their takeover plans. It has not been possible to assess these costs due to the lack of robust data on both the number of companies that would affect and the amount of staff time that would be involved.(www.gov,2017)
Small and Micro Business Assessment: Takeovers through ‘cancellation’ schemes of arrangement are more commonly used for takeovers of large or medium-sized companies than smaller companies. Merger and acquisition advice normally comes from larger and more specialized businesses instead of small or micro businesses. Other impacts –which includes environmental impacts – of placing forward this measure have been considered and none have been identified in comparison to not taking action.
To further modernize it, the reduction of administrative burdens and bureaucracy on companies have been performed by avoiding unnecessary duplication of effort in the filing requirements at Companies House and streamlining company registration.
The recent changes can impact on many aspects of company law, insolvency and directors’ disqualification with transitional phases for their new implements to allow companies the time to adjust and comply in a manner suitable to deadlines.
Task 2 – Illustrate the potential impact of the law on a business
P3: Using specific examples illustrate how a company, employment and contract law has a potential impact on business in your organization.
Morningstar nursery is a limited liability company that acts through two bodies of people – its owners and its board of directors. The board of directors are in charge of the management of the Morning Star business. The role of the Nursery directors is to provide professional leadership and management of the nursery, to effectively manage the day to day running of the nursery and to deliver the highest standards of care and education. They establish, develop and maintain highly professional working relationships with relevant Local Authority Departments, regulatory bodies and other agencies. They further intend to create and maintain a culture of self-evaluation and reflective practice throughout the nursery.
The term employment is the state of giving paid work offered by the employer within their trade or profession.
This will lead to a contract law which is a legally binding agreement between an employer and an employee. An employment contract is commonly written and signed by the parties. However, there are several other types of contracts that are considered and can be enforced. Although employment contracts are governed by contract law, there are many statutory rules which affect employment contracts too.For example, promises involving money or something valuable. Both parties thus intend to carry out what they promise to do, which is within the law. The contract is typically voluntary, deliberate, and legally enforceable, therefore, binding. The employee must agree to this contract as a condition of their employment.
Employment contracts cover a variety of procedures and often policies that are required for the employer to protect its own interest. It also states a duration of time restricting the employee after they leave the company, from working for a competitor or in a similar industry. This section is however often contested in the courts.
This is when workers are able to set their own working times, but usually within a core hours policy – for example ‘clocking in’ between 8 am and 10 am and ‘clocking out’ between 4:30 pm and 6:30 pm. Some employers even run on a ‘total flexible working’ pattern without fixing to a core hours system. Morning Star nursery’s employee can choose when to work and there’s usually a core period during which you have to work. Morningstar nursery gives their staff flexible working hours depending on their circumstance. As an example, after six months/ 26 weeks of working an employer has the right to submit a request for flexible working.
Working time regulations
Under the regulation 1998 act, Morningstar nursery state that employees should normally not have to work for more than 48 hours per week and workers including part-timers have the right to 5.6 weeks’ paid leave each year from 1 April 2009. This equates to 28 days of annual leave for someone working five days a week.
However, this can be permitted so long as an employee does not do exceed this amount on average. In order to calculate the average, the figures are generally based on the past 17 weeks. Reasons, why a person will take time off work, is because of illness, childcare, or simply want a holiday.
Holiday pay and time off
All Morningstar nursery workers have the right to a certain amount of paid holiday each year. The time they can take off generally depends on how many hours they work, as well as what is stated in their employment contract. It is important that people are able to take time off from their job to rest and enjoy themselves, which is why morning star nursery’s employees are allowed a certain amount of holiday every year. Morningstar nursery makes sure everyone is treated fairly, there is a legal minimum amount of annual leave that workers must be given. Where Morningstar nursery gives their employees to additional days off for bank and public holidays, the rights of part-timers may not always be clear.
Part-timers are as much entitled as full-time staff to sick pay, maternity, paternity and adoption leave and pay plus parental leave. If companies give more than the statutory entitlement, part-timers must also get these contractual benefits.
Morningstarnursery under a shift system where all full-time and part-time workers are equally likely to be scheduled to work on a bank holiday then it may be enough for your employer to give all part-time workers a paid day off.
Even if the business is very small and the person hired is a member of the family, there are some mandatory formalities which must be taken into account and filed with the federal and state government.
Dismissal from Employment: This is the termination of employment against the will of the employee.
Common Reasons for Dismissal: Dismissal can be due to the employee’s lack of performance and issues with it. However, it also may be due to factors outside the employee’s control, such as downsizing, company restructuring, or the elimination of a position.
Some common reasons for dismissal include poor performance or incompetence, attendance problems, and behavioural problems. Misconduct is another common reason for a dismissal. This is when employees are let go because of ethical issues, such as lying, giving false information, stealing, or other major misconduct in the workplace.
The role of the Nursery directors is to professionally lead and manage the nursery. The Companies Act of 2006 also imposes certain obligations as a director. Some are personal and are specifically addressed to the directors, others come from the responsibility of the directors to ensure that the Morningstar nursery carries out its obligations – which if not, make the directors liable in the event of a failure.
The potential penalties depend on the specific obligation affected but typically involves a fine or, for the most serious offences only, imprisonment. Morning star nursery directors are responsible for the financial management of the nursery. This means that they develop a budget, manage the accounting and oversee accounts payable and receivable. The director also develops the marketing plan for the nursery, developing public relations and advertising campaigns as necessary.
The director delegates tasks to employers after ensuring that all staff meet the requirements for their jobs; for example, the director orders staff background checks and confirms that necessary licenses are valid. Nursery directors are also responsible for maintaining their own qualifications; most states require childcare Centre directors to complete continuing education courses each year, in addition to other requirements.
And appraise all staff to ensure delivery of high-quality childcare practice. This is due to the fact that Morning star is a small company and therefore without an HR such responsibilities of training would go to the directors in charge of employees. This then develops a well-qualified and experienced team able to meet and exceed all relevant standards. Yet, they must continue to identify training needs; develop training plans and evaluate training undertaken by staff.
Directors should develop open and positive working relationships with staff. They are responsible for all administrative duties associated with the nursery, such as maintaining children’s records and inventories, ordering equipment and keeping personnel records.
Furthermore, Morning Star can delegate staff specialized in promoting high standards of quality within the nursery which is also in respect of the environment, resources and experiences offered to children.
Sex Discrimination act 1975
This is an act to stop unlawful kinds of sex discrimination perhaps on the ground of marriage and establish a Commission with the function of working towards the elimination of such discrimination and promoting equality of opportunity between men and women generally, and for related purposes. ( Thornton ,2010)
Equal pay act of 1970
Employers must give men and women are obliged to provide equal treatment in the terms and conditions of their employment contract when becoming employed to the same or broadly similar work. (Crook ,2013)
National minimum wage act 1999
The national minimum wage (NMW) is the hourly rate below in most sectors of the economy must not be paid which adult workers from the age of 21 are fully entitled to. A lower minimum rate applies to 18 to 20 year-olds.
The Low Pay Commission (LPC) was established as an independent body as a result of the National Minimum Wage Act 1998 to advise the Government on the National Minimum Wage. ( Carey , 2009)
Data Protection act 1998
This controls how your personal information is used by organizations, businesses or the government. Everyone responsible for using data has to follow strict rules called ‘data protection principles’. They must make sure the information is used fairly and lawfully and is limited. The data is used in a way that is adequate, relevant and not excessively accurate and according to people’s data protection rights, kept safe and secure. (Crook ,2013)
M2: Differentiate and analyze the potential impacts of regulations, legislation and standards on your organization.
A rule made and maintained by an authority, relating to the actions of those under the authority’s control.
They are issued by various federal government departments and agencies to carry out the intent of legislation enacted by Congress. The bureaucracy has one of their government functions as rulemaking. The rules issued by these agencies are called regulations and are designed to guide the activity of those regulated by the agency and also the activity of the agency’s employees. This also ensures application of the law.
Regulation and standards
Standards are used to establish the technical detail, allowing the legislation to concentrate on long-term policy objectives – for example, product safety, or environmental protection.
If you comply with a British Standard then you show that you take your responsibilities seriously as an organization. However, standards aren’t the same as regulations and following a standard doesn’t guarantee that you’re within the relevant laws.
Standards are not written by Government are written by organizations such as CSA, ANSI, CGSB, etc. They refer to creation performance or how to do a job and have no authority on their own, but may be adopted into regulations making them legal requirements. This may be referred to specifically in a regulation or through a “General Duty Clause”.
The legislation is another term for statutory law. These laws have been passed by a legislature or the governing body of a country. Legislation can also mean the process of making the law.
Regulations, however, can be used define two things; a process of monitoring and enforcing legislation and a written instrument containing rules that have the law on them. It is a rule that we must follow. Rules that the Government makes under an act (example: Health & Safety Act Regulation for Hearing Protection).
Potential impacts upon a company in regards to various legislation
legislation on data protection and confidentiality
Morning star nursery always concerns should be kept confidential and particular care taken when dealing with sensitive information. Recording an accurate account of disclosures, conversations, child’s behaviour and observations is vital to ensure that factual and clear information is passed on to Careline. All records must be up to date and stored safely.
Morning star nursery with managing other safeguarding risks, staff should be alert to changes in children’s behaviour that could indicate that they may be in need of help or protection. Children at risk of radicalization may display different signs or seek to hide their views. Staff should use their professional judgement in identifying children who might be at risk and act proportionately.
Morning star nursery wants children to feel safe and happy within our setting as well as feel secure and comfortable with the staff. We also want you as parents to have confidence in both your child’s wellbeing and your role as an active partner within our setting. At Happy Children Nursery we aim to be flexible with our daily routine and as far as possible cater to individual eating and sleeping patterns (particularly for younger children)
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Additional legal requirements when setting up a nursery include; ensuring your premises comply with planning and building control regulations, Morning Star nursery must also comply with the requirements of their local authority environmental health department and local fire authority. Ousted has a protocol with the fire service that sets out the requirements in relation to fire. when setting up a nursery requires Morning star nursery to complete a health declaration booklet, which requires you to submit any health problems and medications you are taking to Ofsted safety.
Health and safety legislation and consumer legislation:
Morning star nursery employers have effective health and safety legislation and consumer legislation policies in place that set a clear direction for the business to follow and the Morning star nursery should have planned how to implement these policies. An important part of reaching health and safety outcomes is having a strategy and having clear plans. The policy sets a clear direction, whilst planning enables you to successfully implement the objectives of the policies.
Staff must follow child safeguarding policies should make it explicit to all workers that preventing harm to children should be a commitment of employers and employees. They need to understand that they represent, or are identiﬁed with, the Morning star nursery at all times.
Maladministration is the actions of a government body which can be seen as unjust. Maladministration can mean incorrect action or failure to take any action.
An example of maladministration for Morning Star nursery; In terms of medication, as like wrong asthma puff, the misappropriation and misuse of drugs by staff is part of the wider issues regarding the misuse of sedatives to control challenging behaviour. Such issues are extremely serious and should be referred to safeguarding procedures.
Morning star nursery follows some simple steps to protect their business against online security threats. Having good cybersecurity measures in place will help protect your cash flow, their staff and children data and their reputation. Morning star nursery can also get a Cyber Essentials certificate to protect against common internet threats and show their customers Morning star nursery take the issue seriously.
Morning star nursery Keeping children safe from bullying connected to race and faith is integral to building safe and thriving communities. This guide highlights some key actions that can both prevent, and respond to race and faith targeted bullying in a nursery environment. There are also links to further resources and activities that can help you in your approach to promoting good relationships and equality in Morning star nursery.
Check what privileges your accounts have – accounts with Morning star’s administrative privileges should only be used to perform administrative tasks. Usual accounts should be used for general work. By confirming that your staff don’t browse the web or check emails from an account with Morning star nursery’s administrative privileges they cut down on the chance that an admin account will be compromised. Because an attacker with unauthorized entry to an administrative account can be far more damaging than one accessing a standard user account. ( Stevens ,2015)
Suggest appropriate legal solutions to business problems
P4: Suggest appropriate legal solutions for a range of business problems e.g. termination of contract, rescue from insolvency and liquidation using your organization as an example
The Companies Act 2006 governs all UK companies under a single law regime, but Companies House operates in three separate jurisdictions, each of which is served by a different registrar: England and Wales (Cardiff registrar), Scotland (Edinburgh registrar), and Northern Ireland (Belfast registrar).
Company formation is the process of registering a business as a limited company at Companies House. As a result, the business becomes a distinct legal entity. The process is also referred to as ‘company incorporation’ and ‘company registration’.
When you incorporate a limited company, it becomes an individual ‘person’ in the eyes of the law. Incorporated businesses are completely separate from their owners in terms of finances, liabilities, contractual agreements, and ownership of property and assets.
The law does not view unincorporated businesses as sole traders as distinct legal entities.
Once incorporated, companies must adhere to strict accounting practices and reporting requirements in accordance with the Companies Act 2006. All corporate details are placed on public record to ensure full disclosure and transparency for the benefit of the public.( Brenda Hannigan – 2015)
Once a party formally agrees to a contract, they become liable under law to fulfil their contractual duties.
A contract can be legally terminated before the contractual duties have been fulfilled. This is known as “termination of contract” and may occur for several different reasons including redundancy, poor performance or reorganization of a business. And employees may terminate their contract by resigning or an employer may terminate the contract by dismissing an employee and are strict guidelines which employers must follow to in order to remain fair to the employees whose contracts are being terminated. Termination of the contract is governed by contract laws, which may vary according to each individual state.
Often a legal solution such as unfair dismissal compensation can be made to prevent the termination of a contract by arguing the liability and breach within a contract, This can be a fee paid to their employee. If either party fails to do so as requested or fail to take responsible care to avoid loss, damage or injury in the discharge of contracts, an action is liable and argued for negligence. This restricts a person to terminate their contract for death or personal injury resulting from negligence. Offers can also be made by either party to compromise and reduce the risk of terminations in the future.
Insolvency is the state of bankruptcy after being unable to pay the money owed by a person or company. This is a common problem that business owners face and the ideal rescue solution to help save the business, could be applied as company rescue solutions. This includes company voluntary arrangements. A CVA is a deal between the insolvent company and its creditor. The CVA places a legal ringfence around the company preventing creditors attacking it. This allows the struggling company to repay some, or all, of its historic debts out of future profits, over a period of time to be – usually three to five years.
Liquidation is a situation when a company stops operating and sells all its assets to pay off its debts. This is normally after insolvency and the company is unable to pay the debts in the needed time. Any remaining amount after paying the firm’s unsecured creditors is distributed among the shareholders in proportion to their shareholder. When liquidation is compulsory it is harder to solve as the courts have petitioned for it also, otherwise, lawsuits are made to argue at court why it should be petitioned against or asked for a longer time period to pay off debts to creditors if the debts are rather high.
Generally, the main reason to register a limited company is to reduce the financial responsibility of the people who own the business. This protection is known as ‘limited liability’. Private companies can be limited by shares or limited by guarantee.
The owners of a morning star nursery benefit shares are only liable for the value of their shares. The morning star nursery by guarantee is only liable for the value of their guarantees. Their personal finances and assets are protected beyond the limit of their liabilities.
This is not the case for unincorporated business structures. Sole traders, for example, are wholly liable for all business debts and liabilities because there is no legal or financial distinction between the individual person and the business.
Aside from the obvious benefits of personal financial protection, limited company formation creates a professional corporate image and allows business owners to manage their personal remuneration in a more tax-efficient manner.
Furthermore, limited status gives the impression of an established and reliable business. As a result, incorporated businesses are more attractive to investors, lenders, clients and suppliers.
If any employer of morning star nursery in Instances of Mistake, Fraud, or Misrepresentation: If the contract was formed under conditions involving mistake, misrepresentation, or fraud, the contract may be terminated, since it was not formed according to sound contract principles.
Morning star nursery according to a Prior Agreement: Termination of the contract may occur if the parties had previously formed an agreement regarding contract termination. For example, the contract itself may have contained a provision stating the conditions under which it may be terminated. Such a provision is known as a “termination clause”, and is enforceable if both parties agree to the termination terms.
So, it is important that a contract is clearly written and that the parties thoroughly understand their contractual duties. A sloppily-written contract can result in the contract being unlawfully terminated behalf the morning star nursery becomes insolvent, the owners cannot be held personally liable for a limited debts or claims beyond the amount they have invested in shares or committed to pay in guarantees. This financial protection is known as ‘limited liability’ and it is one the foremost reasons for choosing to operate as a limited company rather than a sole proprietorship. fore it has been completed.(Beatty, Samuelson-2006 )
M3: Assess the positive and negative impacts of legal solutions to business problems mentioned in P4.
Business problems such as terminations show the importance of contract laws and liability. It is easier to argue one’s way out of a termination of a contract by showing how liable both parties have been the contract. This can lead to arguments such as negligence which stops an employer or employee terminate their contracts as they are at fault for liability for personal losses. However, a disadvantage of using this as a legal solution is the fact that the lack of liability from either can argue for the termination.
The importance of company rescue solutions is shown via cases of insolvency. It depicts the values responsibility of meetings and arrangements to communicate thoroughly between companies and creditors voluntarily to legally settle for a deal to solve the bankruptcy faced. However, a disadvantage is that creditors may not compromise with the company and are unable to both settle for a certain period. It could be either too long for creditors to receive their payments or too short for the company to pay off their debts. This only results in an increase of tension and disagreement between each other.
Liquidation is a problem that is hard to solve when the company is under utter financial struggle and pressured by law to liquidate as well. It is easier to be solved by lawsuits and firms especially if the courts have petitioned against the liquidation of the company. However, the creditors are advantaged as they are guaranteed their money from the debts made during insolvency which are promised to be paid off by the firm. This is a disadvantage for the business as it likely means they will have end operating either way.
The impact of legal solutions to business problem in two ways positive and negative. The positive side is no more conflict between individuals and sort it out by the court with justification and proper reasonable way by the analysis and examination of law. The negative impact is that some people have bad intention to do that for their own interest and they took away company assets before declaring company liquidation.
Recommend appropriate legal solutions based upon alternative legal advice provided
P6: Recommend legal solutions based upon a different country’s legal system and/or a different legal framework.AZ
Legal framework laws are laws that are more specific than constitutional provisions. They lay down general obligations and principles but leave to governing authorities the task of enacting the further legislation and other specific measures, as may be required.
I choose Canada and china legal system outside the UK.
For example, Canada’s System of Justice. Apart from Quebec, where civil law is based on the French civil code prevails, the Canadian justice system is one of the most unique in the world. It possesses two official languages (English and French) and two legal traditions (common law and civil law) that co-exist within their system of justice. This thus causes the legal framework to be bilingual and systemic. The legal system is also inherited from the English legal system. As Canadians, they are all responsible for understanding their rights and freedoms and their duties as members of society. Courts resolve disputes, and in doing so, they interpret and establish the law for all Canadians. (Bagley, 2016 ).
Sample Canadian’s court system blow.
Introduction to China’s Legal System
China’s -civil law influenced by Soviet and continental European civil law systems.
The legal system of the People’s Republic of China (PRC) is defined by the government as a “socialist legal system.” Despite the official definition, however, China’s legal system is based primarily on the model of Civil Law. The Constitution of the People’s Republic of China is the highest law within China.
There are four levels of the court system in China: the grassroots, intermediate, higher and supreme people’s courts, in addition to special courts such as the military, maritime, railway and forestry courts. This is different to the democratic way the UK law behaves, as China is run by a dictatorship and effects businesses differently as well as all businesses in China are owned by the government. ( Potter , 2014)
Sample China legal system blow
The role of citizen advice is helping people within trade unions about work-related issues for example. They give advice on cases like benefits, work, consumer, family, housing, law and courts, immigration and Health issues.
The role of ADR is to advise someone who has a complaint about something one bought or a service and dealing directly with the trader hasn’t worked. You could ask an independent person to look at your consumer problem and try and find a solution. Not all ADR schemes are the same. This is a better method than to go to court as if you’re successful, you will: avoid paying any court fees; avoid going to court (which will be more complicated than ADR) and still receive your compensation.
Work-related issues that can be resolved using legal solutions based on different country’s legal system
China’s legal system presents the belief that it can decrease the work-related issues occurring in China. An example of legal solutions for the termination of the contract could be the written employment contract that all businesses and employers should have for all full-time employees. This makes it harder to terminate employees at will which causes legal trouble.
China employers without a written employment contract expose themselves to the risk of penalties, administrative fines and other legal trouble for having an open term employment contract with employees – which essentially means there is no fixed duration and definite end between the two parties’ labour relationship. ( Potter , 2014)
Recommend legal solutions
Aside from written employment contracts to prevent termination. China also possesses a standard working hour system where most cities enforce an 8 hour work day and 40 hour work week. The system works with the exceptions of the flexible working hours system and the comprehensive working hours system. The flexible working hours system applies to certain categories of employees such as senior management and sales personnel. The flexible working hours system can benefit employers needing greater employee hour flexibility, without having to pay overtime every time one of their employees works outside the standard hours. The comprehensive working hours system states that the total working hours over a given period must not exceed the applicable limit under the standard working hours system. China also provides a financial legal solution to employees whose employers have failed to provide them with annual leave. This is resolved by the employer is legally obliged to pay 300% of the employee’s wages to them for every unused vacation day.
Both the federal government and the provincial legislatures enact as an employment law statutory framework in Canada the puts in place the core aspects of the relationship between an employer and employee. This assures and maintains the health, safety, minimum wage and equal pay of an employee is not discriminated against. This law is a way of stopping termination by enforcing the rights of an employee. This, as a result, means an employee cannot be contracted out of employment at the ‘will’ of the business or employer.
M4: Compare and contrast the effectiveness of these recommendations.
China’s vacation rules are an effective way of ensuring that workers receive the annual holiday they are entitled to as employers will not want to spend such a large sum of money of 300%. However, the problem with such a policy put forward is that it is likely employees are bound to take this as an advantage to benefit them by voluntarily having unused holidays.
China’s prevention of termination procedures is similar to Canada’s as it refuses the termination of contracts ‘at will’. However, it is more likely that Canada’s legal solution will be more effective as its main focus is to stop terminations out of discrimination of age, gender ethnicity etc. It will further be more effective as the federal government enact as the framework making it harder to by law terminate such countries. China, however, has the prevention of a termination decided locally and through mostly municipalities that may discriminate themselves and petition for a termination out of negligence.
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- https://study.com/academy/lesson/what-is-business-law-definition-overview.html (assessed 12/12/17)
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- http://openlearn.open.ac.uk/file.php/2984/W100_2_Reading6.pdf [accessed 2/12/17 ]
- Mylawyer.co.uk. (2017). How does Employment Law affect my business? | My Lawyer. [online] Available at http://www.mylawyer.co.uk/how-does-employment-law-affect-my-business-g-A77211B77227/ [Accessed DEC. 2017].
- Pitman Potter, (2014) China’s legal system polity press.
- Partington, M. (2013) Introduction to the English Legal System. Oxford: Oxford University Press.
- Slapper, G. and Kelly, D. ( 2010) The English legal system, Cavendish Publishing Limited.
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