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.

The job involves advising new start up businesses on the legal system and key legislation that they must know and apply.

Caroline Spencer asks you to make a coherent, critical and objective evaluation of the legal system. She will provide evidence drawn from a range relevant examples to support her judgments.

A handbook is required for all new companies. This will support your business advice.

The handbook should cover the following:

Explanation of the different sources of law, and the laws that organisations should comply with them.

Explanation on the role of government in law-making and the application of common law in the Courts of England & Wales

It is a comprehensive and critical evaluation of legal system and effectiveness, including evidence drawn from relevant examples. This will support your decision making.

Exemplify how the law of employment and company can impact your business using specific examples

Analyse and distinguish the potential impact of regulations, legislation, or standards on companies and organisations.

Task 2

You have completed your training at Legit Solicitors.

Your first task is reviewing and evaluating the following legal cases. You must use appropriate legal solutions to compare with alternative legal advice.

Andrew is a Manchester-based sole trader.

For tax and national insurance purposes, Andrew registered as a self employed.

Andrew is now contemplating incorporating his business as a Limited Liability Company.

(b.) Thomas has been named to the board.

Thomas is unsure if he would receive any pay and wants to know how Golden Plc will relate to its employees.

Thomas is also interested in what will happen to Golden Plc if it fails to survive.

(c. TMT is a UK Limited-Liability Company that deals with household equipment manufacturing and selling.

The Metro Newspaper published several job openings for the company.

Paul, who is currently in Australia with his wife and children, applied online for Marketing director.

After interview, the husband was offered the job by the company. The husband claimed that he is the breadwinner of his home and that men are more active and stronger than women.

Paul was dismissed after five years. Paul was accused of shutting down the Company’s high-level emission releasing plants, which have caused significant pollution. TMT is also cutting its work force as it is not growing and is spending more than its revenues.

TMT made public his personal information after Paul was dismissed for 10 years.

Paul also registered his company using the TMT logos and symbols.

Discuss the legal implications for the above scenarios.

(d). ‘MPP Ltd. made it known to employees at the beginning February without prior consultation. All employees will be subject to mandatory overtime starting March 1.

This was a positive development for many employees, aside from Michael, who is a member in good standing of the trade union “Join us”.

Michael did not join the overtime workers and resigned effective 31 March.

Michael applied to work as a court clerk for a company located in the United States of America.

For each case, you must:

Each case will be treated as a unique case.

Give reasons for the use of appropriate legal remedies in these cases.

Analyze the positive and the negative impacts of legal solutions to these business problems.

We recommend that each case be considered based on the laws of a different country and/or its legal framework.

Answer to Question: LAW2130 Business Law

Task 1Q.1.

The UK’s primary source of law comprises the statutes, or acts of parliament, and the common law. This is law that has been created through the principles set out in cases. And the laws of EU, within the context of the directives and the treaties.

Secondary sources of laws include commentaries. These include books, law journals, legal encyclopedias, textbooks, and other parliamentary and non-parliamentary documents. SOAS, 2017.Q.2.

The UK’s laws are made by the Parliament.

These proposals are designed to solve a specific problem or shape society.

The general elections inform the government’s agenda.

After becoming a member of the government, political parties bring the relevant events to the attention the minister.

On the basis of different factors, laws are made (UK Parliament 2017).

As mentioned earlier, there are two main sources of law in the United States: the common law and the statute laws.

The Parliament created the statutory law, so the government also contributes to their creation.

The Employment Rights Act (1996) is an example. Each chapter in the act has its own provisions.

It is created by a consultative (or a greenpaper), followed by draft propositions or the whitepaper. But before becoming an act it remains a bill. The transition from bill form to act is made via the Royal Assent.

The courts follow the principle that statutory interpretation applies to the statutory laws.

Common laws are those cases that are used to interpret the law as a result of judicial decisions.

A judgment of the case refers to the facts, legal position, the ratio, and the final decision.

This ratio becomes the binding percentage for lower courts, which is equivalent to the hierarchy of English and Welsh courts.

The system is flexible in that it allows the court to overrule a judge of a lower level or to differentiate between cases.

Accordingly, courts are guided by the analysis of all cases (In Brief 2017).Q.3.

The nation’s law system is very comprehensive and detailed. Every aspect of it is covered from the formation of an article to its amendments or repeal.

The reforms and developments that have occurred in the relevant area of the act or in changed judgments lead to amendments or repeals.

Due to Brexit, there are likely to be changes.

The UK’s laws will be no longer subject to EU law once these terms have been confirmed.

This would allow the nation to avoid the conflicts between EU norms and its own norms.

One of the most prominent examples of reforms leading to changes within the legal system of a nation was the incorporation of different anti-discriminatory acts by the UK in one legislation, i.e. the Equality Act of 2010 (Elliot & Quinn 2017.Q.4.

No matter the country where the business operates, there will be similar laws that are applicable to the businesses. They have specific impacts.

The UK’s statutory laws concerning companies and employment, along with the common law aligned with contract, play a key role.

Companies Act (2006) and its regulations govern the incorporation, governance, and termination of companies in the UK.

When this is not observed, other consequences can be imposed on the company or those running the business of it, i.e. the directors.

For civil or criminal liability to be avoided, company laws must be adhered to (Hannigan, 2015).

Similar rules apply to employment laws.

Employers or potential employees are protected from discrimination based on their age, gender, race, or any other criteria (Hardy & Butler (2016); Gennard & Judge (2005).

Kwele-Siakam, v. The Co-operative Group Ltd. UKEAT/0039/17/LA, a lawsuit was brought against the company for racial disparity based on Equality Act, 2010. (Employment CasesUpdate, 2017a).

Nearly every business activity requires the drawing of a contract. It is therefore more important for companies that they follow the common legal provisions of contract law.

This means that companies must properly draft the contract and ensure it isn’t breached.Q.5.

The requirements of the government, regulatory bodies, or professional bodies are required for the organization to perform their work.

These requirements include jurisdiction, work performed, applicability, as well as other factors.

The legislations refer to the laws which must be followed. These legislations can be supported by regulations that detail the requirements under each section.

Equality Act, 2010 has to be followed within the context of employment laws by the organizations. These regulations include Equality Act 2010/Disability Regulations, 2010 as well as Equality Act 2010/Specific Duties Regulations, 2011 (Hepple,2014).

These are the minimum requirements required to carry out certain activities.

UK GAAP refers to the financial reporting standards that have to be followed (Deloitte 2017.

Task 2(A)

There are several forms of business you can do in the US.

Some key points must be considered when changing from sole trader or LLC.

In the United States, there are significant differences in the tax rates and national insurance for the two business types.

For limited companies, the National Insurance is payable on both the salary and bonus of the directors.

The national insurance fee is more expensive than one charged by sole traders. In 2017, Class 2 national contributions were paid at PS2.85 each week. Class 4 contributions are paid on profits at PS8,164 (MadeSimple 2017.

It is not uncommon for sole traders to have different taxation arrangements than companies.

A sole trader is entitled to a personal allowance of PS11,000. This allows him or her to earn this amount before any income taxes are paid.

For 2017-18, taxation will remain 20%, 40% and 45% based upon income limits of PS33.500 between PS33.501-PS150,000 and above PS150,000.

For companies, the rates can be different. The losses can also be carried forward. They can be used against future profits or against previous years.

These cannot be deducted for sole traders and must be set off for one tax year only (MadeSimple 2017).

Andrew must be certain that he will make good on his business ventures, and therefore should avoid higher tax obligations and the national insurance burden.

Andrew might consider setting up a company outside the UK. The tax rates and the insurance program would also change.

It is important to note that there is a significant difference between sole trader vs LLC when it concerns national insurance and tax purpose. Andrew should be aware of these differences before incorporating the LLC.(B)

UK directors have the right to receive the salary due under their drawn contract.

The director becomes entitled to the salary or benefit if a contract was drawn between the company, director, and them to perform a certain service.

This can also be approved in an ordinary resolution (Company Law Club of 2017).

This is why it is necessary to disclose the remunerations of directors prior to the company. This would make it clear for all parties and employees about the guidelines.

There are many options available to help the company survive.

Thomas should therefore be informed that he will be entitled to the salary covered by his service contract and to make the disclosure to employees to keep them in good faith.

Thomas should ensure that the company doesn’t wind up.(C)

The Equality Act, 2010 prohibits discrimination on the basis of sex/ gender.

This is in addition the Equal Treatment Directive 2006/54/EC. The Directive requires equal opportunity to all genders for employment or occupation (Official Journal of the European Union – 2006).

The employer can be held accountable for discrimination if it is not followed.

Rajaratnan and Care UK Clinical Services Ltd UKEAT/0435/14/DA saw the appeal for indirect sex-discrimination being upheld with cost (Employment Update, 2017b).

Redundancy refers to an employee being fired for cause.

Employees who are made redundant should be provided with redundancy payment, notice, consultation and the opportunity to change jobs.

An employee can make a claim to unfair dismissal if they are not satisfied (UK Government, 2017a).

Data Protection Act (1998) imposes a duty on employees to ensure that personal data is kept secure and safe (UK Government, 2017b).

The same data must be used in a limited and fair manner.

Personal information of employees cannot be retained for more than what is necessary to perform their duties (UK Government, 2017c).

After Paul’s dismissal ten year ago, the company shouldn’t have kept this information.

Even worse, they leaked the information, violating the Data Protection Act.

TMT would be held responsible for Paul hiring his wife rather than his wife on grounds of man being more powerful than woman.

The company can also be sued by Paul for unfair dismissal if he is not allowed to exercise his rights related to notice period or redundancy pay.

Paul can also sue the company if he believes that the Data Protection Act was breached. This is because his personal information was leaked and not just unlawfully stored.(D)

A person cannot be required to work over 48 hours per week according to the working hour regulations.

A contract that does not provide overtime cannot force an employee to work overtime.

Employees cannot be forced to work overtime, even if the overtime is covered by their employment contract. This is based on work time regulations.

Only after an employee signs the written “optout” agreement, can they be made to work overtime (NI Direct 2017).

In the present case, no such opt-out agreement was signed. Michael cannot therefore be forced overtime work as the employment contract does not contain this clause.

This would permit him to change jobs.

MPP Ltd is advised to have the other employees sign the “opt-out” agreement. Michael should not be able to make a case for not following the notice period.

ReferencesAndrews, N. (2015).

Contract Law (2nd Edition).

UK: Cambridge University Press

Company Law Club. (2017).

Are directors entitled for a payment? Retrieved from: https://www.companylawclub.co.uk/are-directors-entitled-to-be-paidDeloitte. (2017).

UK GAAP. Retrieved from: https://www.iasplus.com/en-gb/standards/uk-gaapElliot, C., & Quinn, F. (2017).

English Legal System.

London: Pearson Education Limited.

Employment Cases Update. (2017a).

Kwele-Siakam and The Co-operative Group Ltd. (UKEAT/0039/17/LA). Retrieved from: https://www.employmentcasesupdate.co.uk/site.aspx?i=ed35968

Update on Employment Cases (2017b).

Rajaratnan and Care UK Clinical Services Ltd UKEAT/0435/14/DA. Retrieved from: https://www.employmentcasesupdate.co.uk/site.aspx?i=ed27674Gennard, J., & Judge, G. (2005).

Fourth Edition of Employee Relations.

London: Chartered Institute of Personnel and Development.Hannigan, B. (2015).

Law for companies.

Oxford University Press.Hardy, S., & Butler, M. (2016).

European Employment Laws – A comparative guide (3rd Edition). London: Spiramus.Hepple, B. (2014).

The Legal Framework for Equality.

Bloomsbury Publishing. West Sussex.

In Brief. (2017). English Law: An introduction. Retrieved from: https://www.inbrief.co.uk/legal-system/english-law/MadeSimple. (2017).

(2017). Retrieved from: https://www.companiesmadesimple.com/sole-trader-v-limited-company.html

NI Direct. (2017). Overtime. Retrieved from: https://www.nidirect.gov.uk/articles/overtime

Official Journal of the European Union. (2006).

Directive 2006/54/EC Of The European Parliament & Of The Council Retrieved from: https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:204:0023:0036:en:PDFSargeant, M. (2013).

Discrimination, the Law. Oxon: Routledge.SOAS. (2017).

Sources for UK Law. Retrieved from: https://www.soas.ac.uk/library/subjects/law/research/file70249.pdf

Government of the UK. (2017a). Redundancy: your rights. Retrieved from: https://www.gov.uk/redundant-your-rights

Government of the UK. (2017b). Personal data an employer can keep about an employee. Retrieved from: https://www.gov.uk/personal-data-my-employer-can-keep-about-me

Government of the UK. (2017c).

Data protection. Retrieved from: https://www.gov.uk/data-protection

Parliament of the UK. (2017).

How laws are made. Retrieved from: https://www.parliament.uk/education/about-your-parliament/how-laws-are-made/