This chapter studies the various forms of business organization that are available to those who trade. It focuses on the types of trading structures available, how they are established, and provides an overview of the implications of each form of business organization. It should be noted that there is no one model that will suit every individual or every business model. It is very much the decision of the individual—having assessed the business, what they wish to do with it, and how they see it continuing in the future—to determine the form of enterprise chosen. Being aware of the consequences for the business organization is crucial in making this decision.
Chapter
15. The Administration of Corporations
Chapter
2. The administration of the law
This chapter examines the administration of the law under the English legal system. It aims to clarify how, and by whom, the law is administered. It identifies the structure, jurisdiction, and composition of the various courts, and also discusses how the tribunals system fits into the administration of the law. In addition, the chapter looks at less formal approaches to dispute resolution, such as alternative dispute resolution. This chapter describes the duties and responsibilities of the different members of the legal profession including the judiciary, the law officers, barristers, solicitors, legal executives, and paralegals. It also considers the appellate procedure.
Book
James Marson and Katy Ferris
Business Law provides an introduction to the subject. Packed with up-to-date and relevant examples, it demonstrates the real applicability of the law to the business world. The book is split into eight parts. After an introduction about studying the law, Part 2 covers the English legal system, the constitution, EU law, and human rights. This comprises important issues including statutory interpretation and the legislative process, and court structures. Part 3 considers contractual obligations. Here terms such as, contractual capacity, mistake, misrepresentation, duress, contractual terms, regulations, and remedies for breach are discussed. Part 4 discusses tortious liability and describes issues of negligence, nuisance, economic loss, psychiatric injury, and statutory duties. Part 5 examines company law, including trading structures, maintenance of finance and capital, and corporate administration and management. Part 6 explores the employment relationship, the nature of which will determine many important factors for both the individual and the employer. It includes discussions on the Contract of Employment, statutory regulation of dismissals, equality in employment relationships, and Statutory and Common Law Regulation of the Conditions of Employment. Part 6 then discusses agency law and the duties and responsibilities that exist for both principal and agent. Finally, intellectual property and data protection issues are considered in Part 8.
Chapter
15. Business Organizations
This chapter discusses the common types of business organizations and explains the difference between unincorporated and incorporated businesses. The three types of partnership arrangements are considered, namely a general (ordinary) partnership, a limited partnership, and a limited liability partnership. The chapter includes discussion of the rules relating to partnerships under the Partnership Act 1890 and the Limited Liability Partnership Act 2000. It explains how different types of partnerships may be set up and looks at the relationship between partners and the relationship between partnerships and outsiders. It considers the dissolution of the different types of partnerships. The chapter concludes with a discussion of the different types of companies and the separate legal personality of companies.
Chapter
15. Business-related torts
This chapter examines the different types of torts that can affect businesses. A number of these torts (namely product liability, and wrongful interference with goods) aim to protect persons’ usage of goods, whereas other torts (such as nuisance, and the tort in Rylands v Fletcher) are more about protecting persons’ enjoyment of land and property. The tort of occupiers’ liability discusses the duties that are owed by persons who occupy land to those who are present on that land (both lawful visitors and non-lawful visotors). The chapter also discusses the protection of more abstract interests, such as how the law of defamation seeks to protect a person’s reputation. In addition, a number of other torts are discussed, including employers’ liability, and breach of statutory duty.
Chapter
18. Businesses and the Responsibility to Agents
This chapter identifies agency relationships, their prevalence in business, and how the agency exists to bind the principal in contracts with third parties. It begins by defining agency as the relationship that exists between two persons when one, called the agent, is considered in law to represent the other, called the principal, in such a way as to be able to affect the principal’s legal position in respect to strangers to the relationship by the making of contracts or the disposition of property. Agencies exist in corporate organizations, sole trader, and partnership trading structures, and the law in this area applies to many relationships and is frequently seen in commercial enterprises, including high street retailers, between partners, and the directors of a corporation.
Book
Lee Roach
Card & James’ Business Law provides analysis of the English legal system, contract law, the law of torts, company law, and employment law, with online chapters providing further discussion relating to the economic torts, corporate governance, the sale of goods, consumer credit, and the law relating to unfair and illegal commercial practices. All of this is discussed using relevant examples from the business environment, and the key legal cases to help develop a greater understanding of the interconnections between the law and the corporate setting. Part I of the book looks at the English legal system. Part II looks at the law of contract including the formation, terms, exclusion clauses, and remedies. Part III looks at the law of torts in detail. Part IV considers partnership and company law including business structures, the constituents of a company, shares, capital maintenance, shareholders remedies, and corporate rescue. Finally, Part V is about employment law.
Chapter
16. Company Law I
Formation and Finance
This chapter explains how companies limited by shares are formed and looks at the contents of companies’ constitutions. The discussions cover the role of promoters in setting up a company and the meaning of a company ‘off the shelf’. The chapter examines the steps and documentation necessary to register a new company limited by shares and the rules relating to a company’s name. It discusses the constitutional documents of a company and the rules relating to its constitution. The chapter concludes with a discussion of the financing of companies. It examines the different types of shares and the issuing of shares. It also considers debentures and charges.
Chapter
17. Company Law II
Company Officers and Liabilities
This chapter discusses the rules relating to the officers of a company. It considers the meaning of ‘director’ and the position of the Board of Directors. It examines the appointment, retirement, and removal of directors and considers the powers of directors and their authority to act on behalf of the company. The chapter examines the general duties of directors, including the codified duties under the Companies Act 2006, and considers the effect of a breach of those duties. The appointment and the role of a company secretary and company auditors are examined. The chapter concludes with a discussion of the meaning of corporate governance.
Chapter
18. Company Law III
Company Meetings, Shareholder Protection, and Liquidation of Companies
This chapter discusses the different types of company meetings and how meetings are convened and managed. It examines the different types of resolutions that may be made by shareholders both at meetings and outside meetings, and the rights of shareholders to propose their own resolutions. It explains the difference between voting by a show of hands and voting by poll. It considers the protection given by law to minority shareholders. It discusses the meaning of insider dealing and market abuse and the penalties they attract. The chapter concludes with a discussion of methods by which a company can be wound up and the meaning of wrongful and fraudulent trading.
Chapter
20. The constituents of a company
This chapter examines the principal constituents who make up and contribute to the success of companies in the UK. The role of the members is discussed, especially their role in corporate decision making. What is a director and the powers of the board of directors are examined, as well as a discussion of the appointment and remuneration of directors. The importance of the company secretary is examined. The chapter than looks at the role of the company’s auditor as well as the liability that can be imposed upon a negligent auditor. Finally, the chapter looks at the position occupied by a company’s creditors and examines how they can protect themselves via taking security, such as a fixed or floating charge over the company’s assets.
Chapter
25. The contract of employment
This chapter examines the issues concerning contracts of employment. It begins by looking at how employment law disputes are resolved, namely by discussing the role of employment tribunals and the Employment Appeal Tribunal, and how they fit into the courts structure discussed in Chapter 2. The chapter than discusses the difference between employees and independent contractors, and looks at the status of several special classes of worker. An examination of the terms of the contract then takes place, including a discussion of express terms, and the terms that are implied that relate to the conduct of the employer and employee.
Chapter
13. The Contract of Employment and its Termination
This chapter discusses the contract of employment and its termination. It considers the difference between an employee, an employee shareholder, an independent contractor, and a worker, and the tests used to establish their status. It discusses the types of implied terms contained in a contract of employment. The chapter also considers termination of a contract of employment, examining the difference between unfair, constructive, and wrongful dismissal. It looks at claims for unfair dismissal, considering the potentially fair reasons for dismissal, the band of reasonable responses, the automatically unfair reasons for dismissal, and the remedies available where unfair dismissal has occurred. The chapter concludes with a discussion of redundancy.
Chapter
24. Corporate rescue, insolvency, and dissolution
This chapter examines the different procedures available to companies that are experiencing financial difficulties. The chapter begins by examining what is a rescue culture, and the extent to which such a culture is present in the UK. The chapter then discusses a series of mechanisms that are designed to rescue a struggling company, namely administration and company voluntary arrangements. Receivership is then discussed, which is not a rescue procedure, but a mechanism designed to allow a creditor to recover monies owed. The chapter then looks at winding up (or liquidation) which is the process whereby the assets of the company are realized and paid out, prior to the company being dissolved. The chapter ends by looking at the rules relating to dissolution and restoration.
Chapter
2. The Court System and Alternative Dispute Resolution
This chapter discusses the English court system, civil disputes, and alternative dispute resolution. The courts in England and Wales form a hierarchy. At the lowest level are the Magistrates’ Courts and the County Courts, then the Crown Court and High Court, then the Court of Appeal, and finally the Supreme Court. The chapter considers the role of the Court of Justice of the European Union in interpreting EU law within Member States. It explains the position of the European Court of Human Rights, which deals with allegations of state breaches of the European Convention on Human Rights. Civil disputes arise in every area of business. An explanation of the civil procedure rules from commencing a claim to enforcement of a court judgment is provided. The chapter concludes with a discussion of alternative methods of dispute resolution including arbitration, mediation, and conciliation.
Chapter
3. Creating, Finding, and Applying the Law
This chapter discusses the administration of the legal system and introduces its essential elements. It begins by identifying the various sources of law in England and Wales and continues with an examination of the roles played by the judiciary in interpreting and applying legislation. It demonstrates the active and important role adopted by judges in giving the full effect of the law. It considers the law-making process, along with the workings of the parliamentary system and the use of delegated legislation. It also considers the sources of the law to identify where laws may derive, and delineates the ‘hierarchy’ of laws in England. The chapter concludes by identifying and critiquing the ability of Parliament to delegate the responsibility of passing legislation.
Chapter
22. Directors’ duties
This chapter examines the duties placed upon company directors. These include the duty to act within the company’s powers, to promote the success of the company, to exercise independent judgment, to exercise skill and care, and the various duties relating to conflicts of interest (such as the duty to avoid a conflict of interest, and the duty not to accept benefits from third parties). It describes the company transactions that require member approval and explains the limitation period for an action alleging breach of duty by a director. This chapter also considers the ways a director who is liable for breaching his duties may obtain relief from liability.
Chapter
8. Discharge of Contract and Contractual Remedies
The discharge of a contract means that the obligations of the contract come to an end. When discharge occurs, all duties which arose under the contract are terminated. This chapter discusses the various methods of discharging a contract and the consequences of each. It considers how a contract can be discharged through agreement between the parties; the elements necessary for a contract to be discharged by performance, including the rules relating to partial performance of a contract; and the meaning and effect of the frustration of a contract. The chapter discusses the meaning of breach of contract, both actual breach and anticipatory breach, and its consequences. The remedies for a breach of contract are explored, including the rules relating to remoteness and measure of damages and the difference between liquidated damages and penalties. Equitable remedies of specific performance and injunctions are explained.
Chapter
11. Discharge of the contract
This chapter examines the procedures and processes involved in the discharge of a contract. It describes the situations under which a contract will become discharged and discusses the four methods of discharge, namely discharge by performance, discharge by agreement, discharge by breach, and discharge by frustration. This chapter also explains that there are cases where a contract will be automatically discharged with no possibility of continuance (such as where the contract is discharged by frustration) and there are those where the actions of one party may result in the other party being entitled to terminate the contract (for example, breach of a condition) or may simply entitle him to recover damages only (for example, breach of a warranty).
Chapter
14. Discrimination and Health and Safety
This chapter considers the employment law aspects of discrimination and health and safety. It discusses the meaning of the protected characteristics which were brought together under the Equality Act 2010 and considers prohibited conduct under the Act. It explains the difference between direct and indirect discrimination and when direct discrimination can be justified. The chapter discusses the difference between positive action and positive discrimination and the interaction between protected characteristics and prohibited conduct. It also explains the law relating to harassment and victimization. The chapter concludes with a discussion of the law covering health and safety in the workplace, looking at both criminal law and civil law.
