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Executive summary

This paper will discuss the business laws and their aspects also. It will include the different types of formation of the business organization. Then, the advantages and disadvantages will also be explained in the further part of this paper. There are basic rules and regulations described the business organization must follow to maintain the business in the market. 

Table of Contents




There are different ways through which the English law can be created, and then it will evaluate the role of legislation. Through this, it will be observed which the most important source of law is. The English laws are further created in four different ways: legislation, case law, human rights law, and EU law. There is another way through which the law can be created. It is known as the custom, but it has not been discussed since case law and legislation have largely been incorporated. . It will conclude all the common law and statute under one new statute. Legislation law can be passed through the parliament, or it can be in devolved legislation. Every business organization requires capital in order to invest in their new projects and through which they can grow further.

Nature of the legal system

Main sources of law in the UK

The legislation law comes from the bodies or a person authorized by the parliament to enact laws. Parliament is the but with the exceptions of EU law. The developed legislation law must come, and then it should be consistent with a parent act. For example, the law that has been passed by the Scottish parliament is further enabled by the Scotland act. Legislation law can be consolidated and codify law. Consolidation law can be defined as the law which brings different types of statutes under one statute, and it is done without changing anything. For example, the insolvency act 1986 (Artunç et al., 2021). 

The common law or the case law is also important for the part of making the laws. The statutes which can be interpreted are made the law through the courts. The statues which are created by the parliament are must cover a wide range of circumstances. Further, this will make the statute a non-specific one and can be clarified the needs that are to be applied in the circumstances before the court. Interpretation of the statute by the court will bind the system of the judicial precedent. 

Law is also created by human rights law. The human right act 1998 has become the domestic law that will be further incorporated as the European convention on human rights. Even the European communities’ act 1972 has also passed in order to be known as the EU law, which will be as British laws. Another source of law can be from the court of justice in the European Union. As the domestic law gives a different way to interpret from the ECJ, that is why the parliament will be again bound to adopt the ruling of the ECJ. 

Role of government in making laws

In the business world, there are many challenges that come into, and those are very complicated also. So staying in a business needs full preparation and the business also requires proper maintenance. It is also necessary to learn the business laws. Every responsible citizen should know about the rules and regulations of an independent country. Further, the discussion will be on the role of the government in making laws, and it will be understandable for the business laws. Government and the parliament structures are the two different branches of government only which plays a vital role in making the laws (Santoso et al., 2021). 

There are a few stages through which the government roles will be discussed. In stage one, the ruling party will provide a vision, goals, and some directions. Some of the major policies are made by the ruling party based on some of the debates and discussions. At this type of conference, the particular issues are discussed, and the ruling party will take the decision of the vision, goals, and direction.

In the next stage, the ministers draw up the policies on an issue. This will further occur at the national level, where the ruling party can resolve it. Here the ruling party will try to convert it to the official government policy or law by the constitution. In the next stage, the policy finalization will take place. After the discussion, the policy will be finalized by the relevant department and the ministry where the issues and the option have been prepared in the final policy, which will be published as a white paper. After that, the law will be passed as the white paper will be further considered the basis of legislation (DiMatteo et al., 2021). 

Potential impacts on business

This will conclude how the company, employment, and contract law potentially impact business. The company act 2006 was passed by the parliament of the UK, and it is known as the primary source of law. It was the longest act formulated by the UK, and it has over 1300 sections conglomerated in 700 pages. This act has been surpassed by the new corporate tax act of 2009. This act aims to modernize and simplify the company law and also wants to codify the duties of the company directors. It also wanted to grant the rights to stakeholders and simplify the administrative burden carried out by the organization operating in the UK (Conklin et al., 2021). There will be different tasks further assigned to the directors, which are described in section 171 to section 177.

Further, the employment law can be described as the safeguard to the rights of the employees and for the employers also. The contract law will make the employer and the employee bind in a contract when offering jobs to them. The contract will include the important terms for both the employer and the employees. 

It is well known that the business will need some time to operate in a very competitive environment that will need some ideas and be full of regulatory constraints. Some regulations have international and national standards, and some legislations are also. Every organization should follow these, and they should also know the difference between all these three things. Some regulators enforce regulations, which are the rules required to be followed. After that, the legislation can be said as the law formally formed by the government after a parliamentary session. Legislations are influenced by the structure of the organization and also by its functions (Bulturbayevich et al., 2021). 

Formation of the business organization

Advantages and disadvantages of formation of business organization

Business organizations are where the business is made to be run and where these are conducted. There are various types of business structures, but to be the most important, there are six to seven forms of business organizations to be prioritized here. Many factors can affect the business forms, and those are like the capital of financial requirement for the business. Nature of the liability and flexibility in the operation which is needed to be conducted in the business so that the business can run smoothly in an organization. These are the forms that have a on the business organization (Wernaart et al., 2021). 

The business organization formations have some advantages like through that it is easier to set up the business. Like in the sole proprietorship, the states do not require any registration. With the help of formation, the business organization is easy to form, and it can continue to exist as one of the biggest business organizations in the market. 

Sources of funding for the companies

There are three major ways which can raise capital, like from the net earnings from organization operation and by borrowing or by issuing equity capital. Further, the debt and equity capital can be further obtained by the external investors, and there will be some drawbacks also for the firm with the type of capital. The retained earnings can be earned by selling a product or the services with a profit which can be done by selling those with more than the cost for making it. The primary method through which the company can make money. These funds can be used further in the business so that it may grow. The company borrows money from external investors, and it can be done through bank loans also. There is another way through which it can be done publicly through a debt issue. A company can also raise some capital by selling off the ownership stakes in the form of shares to the investors who have become the stockholders. This is known as equity funding for the company (Khanna et al., 2021).

Occurrence of dispute in a business organization

Resolving a range of disputes

If the disputes even occur, they can be resolved by some negotiations. When the parties do not reach an agreement, then there will be some disputes, and they need some solutions in order to resolve the disputes. There are many ways through which disputes can be resolved, but the most common way is court litigation, as it is the best choice for many reasons that will be further discussed. There can be some alternatives for resolving disputes which will further depend on the needs and interests of the parties which will be suitable (De Luca et al., 2021). 

All types of business-related disputes can be resolved in court, and the right turn which is derived from the court is from the constitution only. Subjecting some of the disputes that must be gone to the court like both the parties of business are located in the same country and speak the same language further they also share the same culture as well. It is most important that the cost of the claim will not be too high. The nature of the business relationship is very common in our economic environment. There will be some mutual claims which will not be so big as the business relationship is small or medium in nature (Løyning et al., 2021). 

Different sources of legal advice

There are three different sources for legal advice that can resolve any dispute that occurs in the business organization. The parties can reach the court to solve their problem in the business, which is known as litigation. Litigation has already been discussed as it is the most important solution for any dispute. Further, the arbitration will be discussed as if the court has the right decision for the disputes between the parties, which will be based on the law. After that, there is the authority of an arbitral tribunal which will come for the parties’ agreement. The dispute cannot be referred to arbitration without an agreement between the parties. Arbitration institutions can provide the standard provisions, but it is necessary to consult with a specialist about the standard provisions. 

Mediation is the combination of the court and the arbitration where the parties will agree to resolve their dispute with a settlement with the help of a mediator. The mediator will be an unbiased person who will try to find the need for both the parties and after that, they will help them to reach the agreement. There are many international arbitration institutions that have offered mediation services for businesses that are facing disputes. The parties can choose some of the mediators from there also, and they can also further choose mediators without being administrated by a certain institution (Gant et al., 2021).


Here it can be concluded that business laws are necessary for every business organization. It should be followed by everyone in the company, and everyone should have knowledge of the rules and regulations. The organization will always need capital to run the business properly, and in order to expand the business, they can raise funds from external funding sources also. Every company does have the aim to earn profits and then use those profits for the ongoing business operation. This process is the most profitable way for any business to raise funds for its business organization. After passing the law by the national parliament, then it will become published. In the whole process, the national, provincial ministries will be responsible for the implementation of the law everywhere.


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