Business laws in British

There are numerous legal requirements for conducting business in the UK. An aspiring businessperson must first decide on the structure of their organization and their legal form before launching their own company in the UK. Such a form establishes the fundamental rights and obligations of the company as a whole as well as its founders in accordance with legal standards. The service sector is the dominant one in the structure of the British economy. It is dominated by financial and business services, which dictate the nation's specialization in the system of international economic relations. Industrial manufacturing is another crucial pillar of the British economy.
Generally, there are five major legal forms of organizations. Sole Trader is the easiest form to start and run a business. It implies ownership and full control over the business belonging to one person (BIS 2). Unincorporated associations are those uniting several participants, who have drawn up an agreement and signed a joint agreement specifying the purpose and subject of the activity (BIS, 2). Partnership is a relatively simple way to start and run a joint business in order to generate profit for two or more business partners (BIS, 2). Limited partnership implies the presence of two classes of partners, namely simple and limited ones (BIS 3). This form is similar to a partnership, but the main difference is that special partners cannot participate in business management, and their liability is limited to the amount they invested in the charter capital of the partnership. Trust is an unincorporated organizational and legal form that does not have an independent legal entity (BIS 3). In essence, trust is a legal mechanism used by entrepreneurs to own assets with the condition of separation of ownership and economic interest. This form holds assets on behalf of an individual or other organization and determines how they should be used.

Section 1: Nature of Legal Systems

The legal system of England is based on the Anglo-Saxon Legal System, the main source of which is the rule formulated and expressed in judicial precedents, or decisions on a particular case, which are then given binding force. Additionally, the statutory law of parliamentary origin is also a source of law. In the UK law, there is no division into public and private regulations. Furthermore, there are also no European codes in England, the branches of law are less pronounced than in the continental legal systems, and the problems of their classification in practice and in scientific doctrines are paid much less attention. The courts in England have general jurisdiction and consider different categories of cases, for instance, those pertaining to civil and commercial spheres.

While reviewing cases, English judges usually have to find out if any similar case was considered earlier, and in case of a positive response, they are guided by an existing pattern of actions (Martin, 224). The degree of mandatory precedent depends on the place in the judicial hierarchy of the court considering the case. The Court of Appeal, which consists of civil and criminal branches, is obliged to comply with the precedents of the House of Lords and its own ones, while its decisions are binding for all lower courts (Marson & Ferris, 63). The High Court is bound by the precedents of both higher instances. Its decisions are binding for all lower courts and also affect the consideration of cases in the branches of the High Court, although they are not strictly binding for them.

In the area of tariff regulation of imports, the basic document is the Integrated Tariff of the United Kingdom, which includes the Common Customs Tariff of the European Union as well as the system of statistical nomenclature, harmonized description, and coding of goods developed within the framework of the Council for Customs Cooperation. In the UK, a range of goods, customs duties, and procedures are used similarly to those adopted in the EU countries.

The Queen has broad and important powers, which were previously concentrated in the hands of one person, but are now distributed between the Cabinet and other structures. The powers are divided into two categories, those based on tradition or prerogative and on the law and decisions of the parliament. In the second case, any disagreement is rare, in the first instance, it is very difficult to determine the limits of the monarch’s abilities. On the other hand, the constitutionality of the British monarchy is expressed in the fact that royal prerogatives are applied on the advice of ministers. For their implementation, parliamentary approval is not required. Moreover, before the next meeting of the parliament, which will discuss a bill that in some way can affect royal interests or prerogatives, it is necessary to obtain the monarch’s consent in advance. Furthermore, such prerogatives have a number of limitations. For instance, the monarch cannot introduce new taxes.

In legal and judicial matters, monarch also does not play a special role, although formally heading all the judges of the Kingdom and having the royal right of pardon. The present executive body of Great Britain is the Cabinet of Ministers. It carries out the action of all bills, brings them to life, and keeps track of all organizations on behalf of the crown. Even in the sphere of international relations, the Cabinet does not allow the monarch to play a more significant role than an agent of the Cabinet of Ministers, who is responsible for the work of the authorities in all spheres. The task of the monarch is limited to being informed about the existing situation inside the country and in the world and having the opportunity to discuss it with his ministers.

Section 2: Impact of the Law on Business Organizations

In the UK there are certain rules and requirements to be followed when establishing a business to avoid problems. It is very important to get professional advice on such points as tax legislation, intellectual property, labor law, and insurance. Tax legislation means that an accountant must be employed to help entrepreneurs understand the tax issues applicable to their types of businesses and the system of payment (Kershaw 21). As for intellectual property, there must be a layer in a company, who would deal with relevant laws and regulations to avoid potential problems and litigation. It is especially important to comply with labour laws since deviation may lead to serious consequences for the owner and his/her business. Registration of insurance in some cases is a legal obligation since would help to protect an entrepreneur and his or her business from potential problems.

The UK tax system includes nationwide and local taxes (James, 10). The former group includes income tax for individuals, corporate income tax, capital gains tax, oil income tax, and inheritance tax, value added tax, duties and excises, and stamp duties (Barnard 20). State taxes in England represent over 90% of tax revenues to the state budget. Local taxes only belong to the property tax, part of which is about 10% of tax revenues. Any profit received in England is taxed regardless of the residence or formal residence of the person or country of incorporation of the company. In the case of private individuals, those who are not tax residents should pay tax only on profits earned. The revenues received outside the country are not taxed.

English non-resident company, which trades in the country through a permanent establishment, is liable for corporate tax on all revenues associated with permanent establishment (Tiley & Loutzenhiser, 110). The corporate tax rate is set separately for each financial year from April 1. If the reporting period of the company does not coincide with the financial year, its profit should be distributed over time, and the corporate tax rate is applied accordingly.

VAT is charged on the supply of most goods and services provided by companies in England. This tax is levied at every stage of the supply chain, most frequently when the ownership of goods passes or when services are performed. Registration as a VAT payer is compulsory for those English companies with the turnover exceeding the established threshold of £85,000. Voluntary registration is also possible when the turnover does not exceed the established threshold. There are no VAT registration thresholds for companies providing taxable goods and services to England, which do not have a business address in the country. Unless the reverse charge mechanism is applied, such companies must register for VAT immediately after the taxation of supplies.

The tax on additional security, payments, and benefits on the part of the employer in the interests of the employee is not levied (Barnard, Deakin and Hobbs 19). Transfer pricing legislation details the procedure for conducting transactions between related persons based on the internationally recognised principle of outstretched hand. For tax purposes, such transactions are considered with taking into account the profit which would arise if the transactions were carried out by independent parties under comparable conditions (Van der Puil et al., 45). English transfer pricing legislation also applies to transactions between any related entities in England. Most small and medium-sized companies are exempt from the application of transfer pricing rules. Small companies that have no more than 50 employees and an annual turnover or a balance sheet of less than 10 million euro are considered small. Companies that have no more than 250 employees and an annual turnover of less than 50 million euro or a balance total of less than 43 million euro are considered medium-sized companies.

The CFC rules are provisions aimed at combating tax evasion aimed at preventing the diversion of profits from England to low-tax areas. If the profits bypass the CFC rules, they are distributed and levied by an English corporate shareholder, which has a share of at least 25% in a foreign controlled company. In general, CFC profit will be taxed using the usual corporate tax rates and rules for persons controlling CFC if the profit passes through the CFC gateway and is not an exception.

All employed people in England have the right to a state minimum wage, fixed working hours, health service, protection from unfair discrimination employment, and to join associations (“Employment Status”). In addition, workers over 22 years of age should receive a minimum pay of 5.73 pounds per hour. Employees from 18 to 21 years old must receive a minimum pay of 4.77 pounds per hour, while workers from 16 to 17 years should receive a minimum pay of 3.53 pounds per hour. However, there is also a residue problem since deductions from wages for goods and services are provided. An employer should not reduce the salary below the minimum. Legislation does not provide for fixed hours since some people are paid for the amount of work done work rather than how long they work.

Each employee is entitled to a 20-minute rest break if the duration his or her work day exceeds six hours. Regarding vacation leave, each employee is entitled to 28 days of paid annual leave. Any employer must provide the employee with a working environment which guarantees the protection of health and safety of work, particularly including training in safety. There are many special rules to be followed at each workplace where there are special risks for employees. Additionally, everyone has equal rights in terms of age, sex, race, disability, pregnancy, sexual orientation, religion, or beliefs. According to the British law, Health and Safety at Work Act 1974, every employee is fully protected from potential negative factors, such as harmful effects on production, the threat of disease, injury, and burns (“Health and Safety at Work etc. Act 1974”).

Case Study 1

The 16-year-old girl was damaged, and the responsible person was not there at the right time. The term of work accident means that in the performance of work duties, the physical or mental health of the employee has been harmed. In England, there is the law on the prevention of accidents at work. Any employer must take care of the health of his employees. In accordance with the norms of the law, the employer must monitor the level of noise, gas and dust contamination, and provide workers with protective clothing, footwear, or eye protection. Additionally, for minors and trainees, management should be thoroughly monitored. The illnesses and incidents should be reported to the responsible institution, and recorded in the book of incidents.

The management is required to conduct briefings related to the activities of employees. The workers need to fully cooperate with the employer. If a safety violation has been detected, or the equipment needs to be repaired, it should be reported as soon as possible so that the employer could take appropriate measures. Thus, an employee would have confirmation that he/she tried to prevent the accident and informed the head of this matter. In the case of a 16-year-old girl, the first thing to do was tell the supervisor and make sure that the case was recorded in the Accident Book. If the employer does not have such a book, all the details of the incident should be recorded and transferred to the employer to retain the copy.

The next step is to consult a doctor. If an ambulance was not called at the scene of an accident which was not too serious, the employer should immediately contact the family doctor or the Accident and Emergency Unit. In addition to examining and prescribing appropriate medications, the doctor will record the fact in the medical history. It is an important point as the employer will have to refund the treatment to the girl. In the future, she will have to apply to the Department for Work and Pension for the manual (“Employment Maintenance: Jobseeker’s Allowance: Joint Claims to Jobseeker’s Allowance”). Additionally, a minor girl should be laid on a sick-list Statutory Sick Pay. Due to burns, she will not be able to work for a while. Therefore, she may need to enjoy Industrial Injuries Disablement Benefit. Furthermore, she has the right to demand compensation for harm to health from the employer.

Section 3: Legal Solutions to Business Problems

Case Study 1

If there is a possibility to check the CCTV cameras, then it is worth checking the video recordings. If it is not possible, then Calvin must prepare a lawsuit. The Defamation Act of 2013 was approved by the Queen in 2013. Section 2 of this law introduced a new defense method for a defendant, which does not allow to be held accountable if the claim contained in the claim contains a judgment that is substantially true. In addition, Section 2 includes one of the long-standing norms of common law. In this case, if the impugned statement contains several judgments, and some of them are not considered to be substantially true, the defendant does not lose the right to defense under section 2 of the law of the Defamation Act 2013, provided that such judgments do not cause serious damage to the plaintiff's reputation.

The UK law in the field of labor relations gives the employer the right to dismiss an employee in case the position being replaced is declared uncalled for in his activities. The order of redundancy reduction and its terms are established by the Labor Rights Act of 1996 and the Employment Rights Act of 1996 (“Employment Rights Act 1996”). The Law on Labor Rights provides for cases when the employer makes a decision to reduce redundancy workers due to a production need or by agreement with them (Department for Constitutional Affairs). In each of such cases, the employer must fairly choose the workers to be reduced and not allow discrimination on any grounds. With the reduction by agreement, the employer appeals to the employees in search of persons wishing to put forward their candidacies for reduction or early retirement in exchange for mutual satisfaction. The proposal for early retirement should apply to all employees, which means that sending to individual workers is not allowed.

Case Study 2. Any entrepreneur always has an additional responsibility for paying taxes and other mandatory contributions for his employees as well as for employers’ liability insurance. Insurance for business is very important; however, even in a highly developed state, controversial situations may occur. The presence of insurance, for example, would save the entrepreneur from risks posing a potential threat to business. The fire was such kind of a risk since it physically destroyed the store. The activity of insurance companies in England is regulated by the relevant legislation. The insurance activities in the UK are regulated by the Insurance Companies Act of 1982. The law regulates the insurance activity of companies in the form of joint-stock companies. In this case, the insurance company refuses to compensate for the financial losses after a fire.

In this case, the lawsuit in court will be accounted for by the Financial Services Act of 1986. This law regulates investment activities in England, including life insurance and pension insurance (“Financial Services Act 1986”). The written claim is the first option to be used before filing a claim in court, which must be submitted in writing, fixing the date of transfer of the claim. The letter itself should contain the essence of the claim as well as a description of the situation that has developed (in this case, the refusal to pay). The company will have 30 days to respond, and if there is no answer, the court is the next step. During the trial, using the above laws, the court obliges the insurance company to either pay at least part of the amount, or Kevin and his father will lose the court.

Section 4: Recommending Appropriate Legal Solutions Based upon Alternative Legal Advice

In today’s economic environment, it often happens that traditional litigation cannot be the most acceptable way to resolve commercial disputes. In addition to offering the full range of legal services in the field of judicial representation, various forms of Alternative Dispute Resolution (ADR) can help in the prevention and resolution of disputes. Alternative dispute resolution includes all methods that do not relate to proceedings in a state or arbitration court. “Alternative” in this case would mean the approaches differing from the main ways of resolving disputes. Neutral assessment at an early stage of the dispute is the neutral conciliator chosen by the parties constitutes an opinion on the nature of the dispute, which is given to the parties in the form of a recommendation. As a rule, in relation to other types of alternative dispute resolution, expertise is of an auxiliary nature, although exceptions are possible. The difference between the examination and the neutral assessment is its technical nature.

Case Study 1

The presence of protracted conflict situations in the relationships of business partners is a consequence of poorly-managed corporate governance. Each of the partners in the business pursues its goals, but nevertheless, all possible disagreements must be foreseen and warned. In addition, even if such agreements were not fixed in the documentation, in the event of friction, it is important to use all the ways to reach an agreement.

Given the specificity of this situation, the first thing to do to resolve the situation is to hold negotiations and adapt to changes in the business environment. This adaptation always occurs with respect to the number of subjective factors, one of which is the coordination of interests. It is beneficial for these two entrepreneurs to cooperate. The need for reconciling interests is closely related to business management issues. Without coordinating the interests of everyone, their further successful coexistence is impossible. In fact, the introduction of corporate governance allows to coordinate interests at all levels. The main tool for resolving interpersonal conflicts is negotiating. Therefore, the knowledge of the nature of organisation and management is an obligatory component of the competencies of the leader of the entity. In this case, before the two business partners go to court, they need to get involved and try to negotiate. Since there is a contentious issue, the involvement of a lawyer can also be useful.

It is difficult to make concerted decisions when one of the partners strives to maximize today’s profit at any cost, while the second is aimed at forming long-term values, completely ignoring the current needs of the business (Blumberg 23). Conflicts of values undermine trust between partners, without which any joint business management is ineffective. If the partners differ in understanding the objectives of the activity, they cannot agree on the key principles of coexistence, and it is unlikely that they will be able to achieve long-term cooperation. The way out of conflict of values, as a rule, is possible only through the termination of partnership.

Settlement of conflicts of interest can be problematic since the changed situation may not be obvious, and the recognition of the changes that have occurred is painful. The resolution of such conflicts is possible if the partners have a common system of values and the desire to eliminate contradictions. When deciding the most beneficial for the business, one of the partners most likely will have to put aside personal interests and ambitions.













Works Cited

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