Business Law: Types of Business Organizations and Legal Consequences for IOM Solutions

Business law

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
Different types of business organisation that are available to IOM solutions for reorganising..3
Legal consequences of business entities.....................................................................................5
Recommendation for IOM electronics .......................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business law is known as the body of law that governs business organisation and
commerce. It is known as the branch of civil laws as well as it also deals private laws and public
law issues and problems. It helps in regulation of business hiring policies and practices, contracts
of corporate sector, consumer goods and services' sales and manufacturing (Alexander and
Alexander, 2021). Commercial laws in business are adopted by many different companies. This
project report considers in it the study of IOM limited which is used in providing to different
local garages various electrical parts. This business enterprise is looked after by sole trader, Sam
who is operating for over eight years this business. From last two years this enterprise is growing
and developing in market as a result it is creating difficulty for Sam in the functioning and
operating of business under pressure. In this report there is explanation of different kinds of
business enterprises that are available for IOM solutions (Young, 2019). It also considers
different types of organisation and their legal consequences. In addition to that, it also consists of
business recommendations for identifying suitable organisation type for Sam.
TASK
Different types of business organisation that are available to IOM solutions for
reorganising
IOM solution from last two years is seeing growth and development in market and as a
result is facing pressure for a sole trader that is Sam. For overcoming and meeting this demand in
market, there is option for company as it can adopt various options that are available in market
that is going to allow them in the management of business and also in its expansion. In today's
world there is a stiff competition that is going in between companies, making it essential to select
the best suited type of business (Bellace and Ter Haar, 2019). For increasing the business
efficiency and effectiveness, it is necessary to select most appropriate type of approach of
business. All the companies that are present in national and international market needs to
concentrate on the development of key approaches while choosing the best suited business type.
It is going to help and guide Sam in the reduction of work pressure as well as allowing in

considering numerous people in business for meeting the demands of market. For IOM solution
there are various options available and they are mentioned as follows:
Sole trader: This business is operated and run as well as owned by a single person who is
the owner and that person looks for different purposes of business. In this business existence
depends on owner's decision. In this type of business, if the owner is absent, there is no existence
of business. There is no separate legal identify that of business and the owner and it is best suited
if there is single person who is running the business (Boyd, Brian and Kane, 2018). It is the
business type that can be adopted as small business with lower initial cost. The taxation of this
business kind is done with the income that is generated by owner because it is personal source of
income. Sam has undertaken this business form for organisation. The profits and losses of
business is faced by themselves. There are less regulations that are present in this business. There
is super flexibility in operations and running of business for the owner.
Partnership: It is different form of business organisation that is based and run on formal
agreement that is done among two or more people who are ready to run business together. This
agreement is done in between two or more individuals or business. There is presence of clearly
stated authorities, liabilities, profits and loss sharing in business. All partners that are there in
business share responsibilities, benefits. There is impact over operations and functions of
company by the choice of partners. Two types of partnership are there in this and that are general
partnership and limited partnership of business. When the partners are liable for loss of company,
debts and other obligations, it is general partnership. In limited partnership, there is limited
liability of some partners whereas some partners are just investors of the business. Limited
partnership consists of partners that are general partners and limited partners. This business type
can be adopted by Sam for IOM solutions as a result it will help Sam with benefits of more funds
and shared responsibilities in business. It will reduce the work burden of Sam's business because
of shared responsibilities and increased business growth and development.
Limited liability: This business type consists of limited liability of the owner along with
income advantages. There are various benefits of this business type for owner because of limited
liability of loss and debts. In this the business profits are shared by the owner and that too
without double taxation (Cebriá, 2018). There is complete separate liability of the owner from
business and it is taxed as a different corporation or partnership. This business type can be
adopted by Sam, who is a sole trader of IOM solution as it has its separate identify. It will help in