LAW2130 Business Law

Question:

Task 1

As a trainee, you work with Caroline Spencer, a partner at the law firm, as an ‘Legit Solicitors’ lawyer.

You will be advising new start up companies on the legal system, key legislation and how to apply it.

Caroline Spencer requires you to give a cohesive and critical evaluation of law and the legal system. You will need to use evidence drawn from a wide range of relevant examples to back up your conclusions.

In order to provide guidance and business advice, you will be asked to prepare a handbook for new businesses.

The following areas must be included in the handbook:

Explanation and compliance with different laws.

Explanation of how statutory and common laws are applied in England & Wales Courts

An objective and coherent evaluation of the legal systems and their effectiveness in light of recent reforms. You will use evidence from a variety relevant examples to support you decisions.

Specific examples will illustrate how contract, employment, and company law could have an effect on businesses.

Analyse the potential effects of regulations, legislation, and standards on organisations and businesses.

Task 2

You have successfully completed your training with Legit Solicitors.

Your first task will be to critically examine and evaluate the following cases, using appropriate legal solutions as compared with alternative advice.

Andrew is a Manchester sole trader.

He was registered as self-employed to obtain National insurance and tax benefits.

Andrew is considering incorporating the business as Limited Liability Company.

(b) Thomas has been elected to the board as a director of Golden Plc.

Thomas is curious if he will be paid for his services. He also wants to know how Golden Plc would relate to its employees.

Thomas is also curious about what happens if Golden Plc fails to thrive.

(c) TMT, a UK limited liability company, deals in the production and sales of household appliances.

The Metro Newspaper advertised several positions for employment by the Company.

Paul, who lives with his family in Australia, applied online to the position as Marketing director. Paul’s wife also applied.

After an interview, the company offered to hire the husband. He claimed that he is the breadwinner in the household and that men are more energetic and strong than a wife.

Paul was fired by TMT after 5 years. Paul stated that the Company was shutting down its high-level emission releasing facility, which had a significant impact on the environment. Also, TMT was cutting down its staff force as it is not growing and spending more than it earned.

TMT leaked Paul’s personal data to several organizations and individuals after 10 years of Paul being fired.

Paul also registered a business using the TMT logo symbol.

Discuss the legal implications arising from the above situations.

(d) At the beginning of February, ‘MPP Ltd.’ made it clear to all employees that they would be starting compulsory overtime in March without any prior consultation.

The decision was welcomed by some employees, with Michael being a member a trade union called ‘Join us.

Michael did the overtime work alone and resigned as of 31 March.

Michael applied to work as a Court Clerk for a company in the United States of America.

In Each of The Cases Listed Above, You Will Need To:

To suggest the best legal solution for each case.

Give justifications for the adoption of appropriate legal solutions for the above cases.

Evaluate the impact of legal solutions on the business problems.

Recommendations for legal solutions in each of these cases are based on the legal system of a different country and/or a completely different legal framework.

Answer:

Task 1

The UK has three main sources of law: the statutes (or the acts of Parliament); the common law (or the laws that have been made by applying the principles set out in the cases over the time); and the laws of EU, as a result of the directives and treaties.

The secondary sources of law are the commentaries that are referred and include legal journals, legal encyclopedias, textbooks, as well as parliamentary and non-parliamentary documents (SOAS 2017).

The UK Parliament is responsible for passing laws. They are the result of government proposals.

These proposals address a particular issue and shape society. The general election is used to inform the government’s agenda. When they are part of the government’s agenda, the parties bring the events to attention of the minister. Based on different factors, laws are created (UK Parliament 2017, 2017).

As was stated before, the common and statutory laws are two sources of law in the country. The Parliament creates the statutory laws. Therefore, the government is involved in their creation. The Employment Rights Act, 1996 is an example. It is broken down into chapters and each chapter has its specific provisions.

It is formed by a consultative or green paper, followed with draft proposals or white paper. However, before it becomes an act, the bill remains. The Royal Assent (In Brief 2017, 2017) is used to make the transition from bill into act.

The courts use the principle of statutory interpretation to apply the statutory laws.

The common laws are cases that have been used as law by the courts.

A case judgement includes the factual description and legal position of the case, also the ratio and decision.

This ratio is binding for those courts that are lower than the hierarchical levels of the courts of England or Wales.

However, the system allows for flexibility in the context of the ability to overrule the decision of a lower judge or to distinguish one case from another.

Common law is therefore applied in courts based upon the analysis of the entire case (In Brief, 2017, 2017).

The nation’s legal system has many aspects. Each aspect is described from the creation of an Act, through its amendments, or its repeal.

Amendments and repealing acts are made due to developments and reforms in the specific area of the act, or in the modified judgments.

The Brexit is also causing changes in the current environment.

After the agreement is made, the UK will no longer be subject to the EU laws.

This would eliminate many of the problems that the UK faces due to conflicts between EU and national norms.

The Equality Act (2010), which combines the various anti-discriminatory acts in the UK in one legislation (Elliot & Quinn 2017) is a prime example of how reforms can lead to changes in the legal part of the nation.

No matter what country the business is located in, there are common laws that affect businesses in a similar way.

The UK’s statutory laws regarding companies and employment play an important role. They also include the common law that is in line with contract legal.

Companies Act, 2006, and the related regulations are used to incorporate, govern, and even end UK companies.

This can have different consequences for the company or the directors of the company if it isn’t followed.

The company laws must be followed in order to avoid any civil or penal liabilities (Hannigan (2015)).

Similar laws apply to employment law.

Businesses must avoid discrimination based on age, gender, race, or any other criteria toward any employee or potential employee (Hardy & Butler 2016, Gennard & Judge (2005)).

Kwele-Siakam (v. The Co-operative Group Ltd UKEAT/0039/17/LA) alleged that the company engaged in racial discrimination pursuant to the Equality Act, 2010, (Employment Cases update, 2017a).

Nearly every business activity requires that a contract be drawn. Therefore, it is more important for companies to follow the common laws of contract law.

This means that companies need to correctly draw the contract, ensure it is not broken, and not use any vitiating factor in the contract which could result in liability for the company (Andrews (2015)).

The government, professional bodies and regulatory bodies will require that the work of the organisations be done in accordance with certain requirements.

These bids are based on their jurisdiction, the work being performed, applicability, and various other factors.

These legislations must be followed by businesses. They are supported by regulations that detail the requirements under each section.

Equality Act, 2010 should be followed by employers in relation to employment law. It is accompanied with regulations like Equality Act 2010 – Disability Regulations, 2010 and Equality Act 2010 – Specific Duties Regulations, 2011. (Hepple, 2013).

The minimum requirements for certain activities are called standards.

UK GAAP is an example of the financial reporting standards that organizations must follow (Deloitte 2017).

Task 2

There are several ways of doing business in the United States.

It is important to understand the key factors involved in transforming from sole trader to LLC.

There are differences between the two types of business in the country, including tax rates, national insurance, and tax bands.

Limited companies have the National Insurance payable on salaries and bonuses.

In comparison to a sole trader’s national insurance charges, the national insurance cost is higher than the one for a limited company. For 2017-18, Class 2 National Insurance Contributions are paid at PS2.85 per Week, and Class 4 are paid on the profits at more than PS8,164 (MadeSimple 2017).

The taxation landscape is very different between sole traders and businesses.

A sole trader can have personal allowances of PS11,000. This means that the amount earned before income tax is paid is not subject to any tax.

For 2017-18, taxation is 20%, 40% and additional 15% based on income limits between PS33.501 and PS150,000 and above PS150,000.

Companies have different rates and losses that can be carried forward can be offset against future profits and profits from prior years.

For sole traders, they must be deducted for the same tax year (MadeSimple 2017, 2017).

Andrew should only take on higher taxes and a heavier national insurance burden if he is certain of good returns.

Andrew could be subject to new tax rates and insurance schemes if he decides to leave the UK to start this company.

When it comes to tax and national insurance, there are significant differences between sole traders and LLCs. Andrew is advised to remember these points before incorporating the LLC.

Any director in the UK is entitled to receive the wages they are entitled under the drawn contract.

When a contract is drawn between the company and the directors to provide a service, the director has the right to such pay.

This can be approved via an ordinary resolution (Company Law Club 2017).

It is an example of transparency regarding the remuneration paid to directors by the company. This will help clarify the expectations of all parties, including employees, about the standard.

Different measures can be taken to improve the company’s situation, such as restricting. If all else fails, the company will be liquidated.

Thomas is advised to claim the pay covered by his service agreement. He should also disclose it to preserve the trust of his employees.

Thomas should continue to make efforts to prevent the company’s winding down.

The Equality Act, 2010 prohibits discrimination based on the person’s sex/ gender (Sargeant, 2013.).

This is in addition the Equal Treatment Directive (2006)/54/EC that continues to apply in the UK. Where equal opportunity must be given to male and female for employment and occupation opportunities, (Official Journal of the European Union 2006).

If this is not done, an employer could be held responsible for discrimination.

Rajaratnan V Care UK Clinical Services Ltd UKEAT/0435/14/DA was the appeal of indirect sexual discrimination. (Employment Cases Updating, 2017b).

It is called redundancy when an employee is terminated from employment due to the employer’s need to reduce their workforce.

An employee who is made redundant must be paid redundancy, given notice, consult with their employer, have the option of moving to another position, and given a time frame to find a job.

The employee may also file a claim against the employer for unfair dismissal if this is not done (UK Government 2017, 2017a).

Data Protection Act, 1998, imposes on employees the obligation to keep employees’ personal data safe and secure (UK Government 2017,b).

Similar data must only be used lawfully, in a fair, and legal manner.

An employee’s personal information should not be kept for longer than it is absolutely necessary (UK Government 2017,c).

The company should not have kept this information after Paul was dismissed ten years earlier.

This was made worse by the fact that they leaked the information which violated the Data Protection Act.

TMT would be responsible for Paul being hired instead of his wife because man is stronger than women.

He can also sue the company for unfair termination for not giving Paul the chance to exercise his rights concerning notice period and redundancy payment.

Paul can also file a complaint against the company under the Data Protection Act for unlawfully storing his personal information and also for the leakage of that data.

A person cannot be forced to work more than 48 hours a week under the working time regulations.

The contract may not allow an employee to be required to work overtime.

The work time regulations do not allow an employee to be required to work more than 48 hours even if overtime is covered under the employment contract.

The written agreement stating that the employee can not be forced to work overtime is signed by the employee (NI Direct 2017, 2017).

In the case in question, no such “opt out” agreement was signed. Michael therefore cannot be forced overtime work as the employment contract didn’t mention this clause.

This would allow him leave his job and to take on another.

MPP Ltd should encourage other employees to sign the opt-out agreement. They should also refrain from suing Michael for failing to serve the notice period.

References

Contract Law (2nd edition).

UK: Cambridge University Press

Company Law Club.

Are directors entitled for a payment?

UK GAAP.

English Legal System.

London: Pearson Education Limited.

Update on Employment Cases

Kwele-Siakam in The Co-operative Group Ltd. UKEAT/0039/17/LA.

Employment Cases Update.

Rajaratnan in Care UK Clinical Services Ltd UKEAT/0435/14/DA.

4th edition. Employee Relations.

London: Chartered Institute of Personnel and Development.

(2014).

Oxford University Press.

European Employment Laws: A Comparative Guide (3rd edition).

Equality: The Legal Framework.

Bloomsbury Publishing: West Sussex

In Brief.

(2017).

NI Direct.

Official Journal of the European Union.

Directive 2006/54/EC Of The European Parliament & Of The Council

Discrimination in Law.

Sources of UK Law.

Government of the United Kingdom.

Government of the United Kingdom.

Government of the United Kingdom.

Data protection.

Parliament of the United Kingdom.

How laws are created.

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