The Scottish Legal System
The Kingdom of Scotland was completely isolated from England before 1707. During the period of its legal system development it was greatly influenced by France and its Roman origin law bases. Although, the two countries of Scotland and England share one monarch the government of Scotland Act 1998 re-designed the Scottish Parliament, thus making it partly independent and obtaining law-making abilities in majority of internal issues, as well as tourism.
3.1 The court system in Scotland
Criminal courts
Business Organizations
This chapter will examine different types of business organizations in Scotland and different legal rules that govern them.
It is essential that the business owner seriously considers the various forms of business organizations. First of all,
4.1 The Sole Trader
If an individual whishes to start a business on his/her own the sole trader, “one-man” business, is the appropriate decision. Accordingly, all business profits are the owner’s, as well as losses.
In order to invest in the business a sole trader can put his own money or use different institutions for a loan. However, the are limited in money source, as they are not allowed to persuade the investment of other individuals money or attract partners with capital.
Sole traders have unlimited liability, meaning that in order to cover the business debts a private property can be confiscated. In case the sole trader cannot pay his debts, the creditors can dissolve the business (Bankruptcy Scotland Act 1993)
The process of terminating the business of the sole trader is less time consuming and complicated. When the business is closed, assets are sold, debts are paid and liabilities are implemented a sole trader can retire to the country and send a reminder.
Generally, there is no law that restricts people from setting a sole trader business, therefore, it is available to anyone. However, once the trader has officially opened the business, he is obliged to follow the legal regulations.
4.2 Partnership
The Partnership Act 1890 defines Partnership as “the relation which subsists between persons carrying on a business in common with a view of profit”. Setting up a partnership involves 2 up to 20 people that make an agreement of cooperation.
Section 4 of the Partnership Act 1890 claims that in Scotland a firm is seen as a separate entity from the partners that attend it. Therefore, the debts of the company are paid by the company, not by the partners. In case a business has no sources to pay back, liability of the partners of the firm is joint and several.
One of the important things to discuss while arranging the Partnership contract is the assignment of authority each partner will have. Any partner who infringe upon the agreement can be bound on the contract.
As for the liability to third parties, in Scotland the victim of unfair treatment or robbery in the person of one of the partners, first applies against the firm. In case, it cannot pay, an action can be brought against the partner who was involved in illegal actions.
4.3 Company