Types of Business Organization and Legal Consequences

This report discusses different types of business organizations such as sole proprietorship, partnership, limited liability corporation, and corporative. It analyzes the benefits and drawbacks of each type and provides a recommendation for choosing the best option for expanding a business. The legal consequences of each type are also discussed.

BUSINESS LAW

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Types of business organization....................................................................................................3
Recommendation for Sam............................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................1

INTRODUCTION
Business law is refers to the commercial law or corporate tax and this is applied on the
basis of rights, relations and then conduct of persons and business which are help for engaged in
commerce, trade, merchandisings and sales (Acosta, Varda and Xenakis, 2018). There are
different types of business law such as consumer goods sales, intellectual property, taxes,
employment law, immigration law etc. Present report is based on different types of reorganizing
IOM solutions and the legal consequence for each option. Then, study will present
recommendation which can be most suitable type for Sam for choosing IOM solutions.
MAIN BODY
Business refers to collects the information which can be used in day to day business
operations and analysis. There are different types of business which can be operated by company
in order to focus on earning profit. This is the long term process in order to help in productivity,
financial protection and employment. Then, main purpose of business is to describe the purposes,
reason which can be initially founded in context to make it successful. There are different type
of business which are help for structured on the basis nature of business, also there are own
benefits and drawbacks of each type of business. It is necessary for the business entity that help
for analysing which income tax return will be filled by owner.
Types of business organization
Sole proprietorship- This is the type of business in which individual can own a business
by himself, the owner are approved of ass board or partner which are make daily business
decision in order to determine regarding business profit. This is the commons structures which
are own by people in order to focus on personal liability. By considering the legal outcome sole
proprietorship and owner are at same point (Ağır and Artunç, 2020).
Also, there are some advantages of this form of business such as It is easy to set-up and
do not require for fillings any papers and it has been stated that in context to legal business there
are not any requirement of proprietorship. Then, the need of tax return is for one time only for
owners. All the decisions taken by an individual who are owning business as well as the tax
forms are not complicated.
However, owner can be exposed to unlimited legal liabilities and owner are responsible
for selling his own car, property or other assets. Also, sole trader are not allowed for accept

capital from outside investors and it is very typical to borrow money from outside. When owner
is pass away the business will be liquidated accordingly.
The legal consequences of sole proprietorship are related to legal liability which is
unlimited on the basis of obligation of organization there are potential loss faced by company.
Also, in this type of business no partner can help for commit the financial loss. According the
legal status it can be said that owner is responsible for own debts which are cooperated under
own name (Asatullayev and Jabborova, 2022). If the owner is married but sole trader are only
responsible for owning the business and not their partner are liable. Then, in this situation sole
proprietorship prove no separations between business and owner in order to assume all tax and
obligation are legal liability of sole trader.
Partnership- Partnership is a non-corporate business that can be formed by two or more
people to operate business operation which help for sharing its profits and liabilities. Also, all the
partners are responsible for sharing profit and liabilities which help for operate business
successfully. Then both the partners are agreed for managing the risk in company equally by
more focus on other aspect and there are different type of partnership business such as law firms,
real estate, physician group and investment firms. All the partner are work as alliance in order to
focus more on taking decision equally which help for liable protection and day to day operation
and management.
The advantages of partnership are easy to form and all the partner are come together in a
group of individuals that are help for sharing different level. When one partner is died
partnership can be continued under the partner ship act 1890 (c.39) of parliament UK that can be
governed by rights and duties of people or other entity that help for conducting business in
partnership (Brewster, A.L., Straker and Curry, 2018). However, it has been said that partner
are carry burden of liabilities in order to responsible for debt. Then, it can be possible that there
is high chance of conflict between partners.
The legal status are related to two types of partnership such as limited partnerships
(LP)and limited liability partners (LLP). General partner are getting profit earlier on the basis of
personal tax returns then partner who are without limited liability can pay the self employment
tax. This is help for provide the clear impact towards social and environmental goal. Due to
personal habit another partners can impact by making decision in order to understand the other
problem and equity of partners.

Further, there are legal obligations in partnership which help for using law in order to
focus on good faith which is utmost towards the fellow partnership. There are different type of
consequences are faces by company in order to focus more on dissolving the partnership.
Limited liability Company- This is hybrid unincorporated business structure which are
help for combines and pass through on the basis of tax model of partnership with the protection
of an individual asset that can be provided by corporation. The owners of LLC are known as
members. All the partner have limited liability.
The benefit of using LLC very flexible to adopt with the help of different structures and
on the basis of tax deduction for business loss. Then, shareholder are not responsible for business
liabilities in order to restructure the company (Clarke and Crane, 2018). LLC are help for
protecting personal liability on the basis of vehicle, house and saving account that can be risk for
bankruptcy or lawsuits.
However, it is difficult to raise capital and can be more expensive in the form of other
structure and salary and profit are related to self employment rates. Also, on the basis of states it
can be related to limited life and when new member join or leave LLC can be reformed on the
basis of transferring and selling ownership. This most suitable for high risk taking business by
considering the significant personal assets and then protected accordingly.
By considering the legal consideration it can be said that separate legal personality that
can be depended on companies act 2006. It is governed by article of association and registered
company accordingly. With the help of initial public offer it is necessary to follow the obligation
by acquiring the shares and other company's stock.
Corporative- A corporation called C corp. Which is considered as the legal entity which
is separate from its owner and it can be make a profit and be taxed which cans bes legally liable.
Then corporation can be the strongest protection to the personal liability and be cost on higher
(Russ, Menon and Levine, 2021). Number of shares are limited in corporative and there is no
limit for number of owners. Further, owner are responsible for share profit on the basis of
investment and then it is depended on share holdings. Also, in the corporative there are boards
who are responsible for elected by owners.
In context to private corporation assets, liabilities and ownership is separated from
owners, and in the private corporation it helps for allowing individual in order to buy stock from

corporation by giving capital to grow business and invest accordingly for using the better
technology or tools.
The benefit of democratic control by members in order to focus more on equal rights as
well as it can be brought together for common cause than access for diverse and unique funding
opportunities. On the other hand, it has been analysed that there are fewer incentives for angel
investors and venture capitalists which can be impacted by decision-making among owners.
The legal consequences are impacted by followings the latest development which is
related to employment on the basis of wage increases. According to national living wage
increased in 2018 and April 2019. This is beneficial for workers in order to focus more on other
aspect which are related to meet the need of minimum wages. It is also helped employees which
is necessary for consider by enrolment pension schemes which is help for increasing to 3% for
employer and 5% for employees which can be increasing cost of business.
Recommendation for Sam
By analysing all type of business it has been analysed that all types are beneficial in their
own as well as it help for selecting the best option for Sam. It has been eight years Sam has run
the business but not he wants to expand its business by focus more on placed number of
pressures and providing different opportunities. In order to recognize the IOM solution it has
been analysed that partnership will be the best option for Sam. There are several reasons which
help Sam to expand business with the help of partnership, now he was liable for performing all
the task and all the profit and loss. Then decision-making power is in hand of Sam but if follow
the partnership in order to expand the business it helps for expanding business accordingly.
There are some common reason for adopting partnership such as follows:
 This is help for bridging the gap in expertise and knowledge, partnering with someone
helps for providing the access by considering the range of expertise because it can be
possible that another partner will come with good experience and knowledge which help
for providing and lacking on the basis of complementary skills in order to grow the
business. Partner are help for fill gap between the knowledge and expertise which is help
for providing the consideration in order to examine beneficial and drawbacks (Sani,
Othman and Hussain, 2018).
 Also, Sam can get more cash on the basis of infusion of cash into the business and it is
help for building the strategic connections. Partnership can be come with attracting large

number of investors in order to raise the capital which help for growing business and it is
beneficial for enhance the ability for borrowing cash from other sources.
 It has been recommended that cost saving help for partners in order to allow by sharing
the financial burden which are related to expenses and other capital expenditure and this
can be result on the basis of substantial savings.
 Sam can get opportunities for sharing partner in order to become productive and also it
help to afford for providing different types of IOM solutions to customers. It can be
eliminated on the basis of downside of opportunity cost. This is one of the advantages
which help for pursue other avenues. On the other hand it can be said that it help to Sam
by focus more on other opportunities in order to come the way (Winnubst, Schauder and
Olbris, 2019).
 This is also helped for better work life balance which are help for lighten the load in
order to allow for time off when needed and to get better suggestion individual help for
maintain work life balance that can be impact positive on the personal life.
CONCLUSION
It has been concluded that business law help for follow by company so that it help for
developing the idea of operating business effectively. Also, it has been analysed that there are
different type of business organization such as sole proprietorship, partnership, limited liability
corporation and corporative. There are different type of benefits and drawbacks of each of
business type. From all the types organization for Sam suggested for expanding business with
partnership so that it help for enhance their knowledge.

REFERENCES
Books and journals
Acosta, J.D., Varda, D. and Xenakis, L., 2018. How community and public health partnerships
contribute to disaster recovery and resilience. Disaster medicine and public health
preparedness, 12(5). pp.635-643.
Ağır, S. and Artunç, C., 2021. Set and forget? The evolution of business law in the Ottoman
Empire and Turkey. Business History Review, 95(4). pp.703-738.
Asatullayev, A.N. and Jabborova, O.G., 2022. Bleeding and its Types, Organization of
Emergency Assistance in Bleeding. European Journal of Life Safety and Stability (2660-
9630), 13. pp.111-116.
Brewster, A.L., Straker, J. and Curry, L.A., 2018. Cross-sectoral partnerships by area agencies
on aging: associations with health care use and spending. Health Affairs, 37(1). pp.15-
21.
Clarke, A. and Crane, A., 2018. Cross-sector partnerships for systemic change: Systematized
literature review and agenda for further research. Journal of Business Ethics, 150(2).
pp.303-313.
Russ, D.E., Menon, V. and Levine, A.J., 2021. A harmonized atlas of mouse spinal cord cell
types and their spatial organization. Nature communications, 12(1). pp.1-20.
Sani, J.A., Othman, N. and Hussain, M.R.M., 2018. Relationship between types of organization
with the quality of soft-scape construction work in Malaysia. Asian Journal of Quality of
Life (AjQoL), 3(12). pp.137-146.
Winnubst, J., Schauder, D. and Olbris, D.J., 2019. Reconstruction of 1,000 projection neurons
reveals new cell types and organization of long-range connectivity in the mouse
brain. Cell, 179(1). pp.268-281.
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