Business Law: Legal Business Structure of UK Companies

This report discusses the role of business law in maintaining rules and regulations for organizations, promoting business in the marketplace, and solving crises or disputes. It covers the legal business structure of UK companies including sole trader, general partnership, partnership, and limited liability. The report also provides recommendations for business growth and survival in the marketplace.

Business law

Table of Contents
.........................................................................................................................................................1
Introduction .....................................................................................................................................3
MAIN BODY...................................................................................................................................3
Businesses & Organisations in the UK........................................................................................3
The legal business structure of UK companies............................................................................4
REFERENCES................................................................................................................................8

Introduction
Business law mainly involve in the maintaining rules and regulation of organization.
Make a law for welfare of business and solve the crises or disputes which was arisen in the firm
and promoting business in marketplace with right direction. This report will base on business and
organization apply in the UK and also explain the legal structure for start-up on new business
which includes some business types such as sole trader, general partnership, limited partnership,
limited liability they all have their features for start-up of business and then this report
recommend a potential business to Sam for growth and survivorship in the marketplace.
MAIN BODY
Businesses & Organisations in the UK
Nature of company means that company deals with business for organizational growth
and achieving higher goal (Akbulaev, Aliyev and Ahmadov 2019.). Business management
basically deals with focusing on management and organizing resource in appropriate manner that
also includes human capital. The companies act, 2006 regulates by UK government for various
roles and responsibility of boarding member which give an account on annual report of business
in terms of shareholder, revenue rate etc. Equality Act, 2010 mainly deals with the legal
protection of people which get discriminated by other people or society at work place. This act
is useful for employee for their growth. The business transaction involve in the exchange of
capital, goods and services with other business entity. There are basically two types of business
transaction, cash and credit. Vicarious Liability is a situation in which a party is partially
responsible for any unlawful action carried out by third party. Negligence is a protection law for
taking care of someone when a person meet with unreasonable risk. Business liability is make a
proper policy for employ if any unwanted injury would take place. Business grow in a particular
direction leads a positive effect on the profile of company positioning.
Director act as a parent of company which basically responsible for managing and
controlling of each affair. in case of breach of any general duties and on insolvency of that
company director is liable. In situation where directors allow trading of the company when it is
insolvent or near to insolvency directors are held liable. A process in which partners dissolve
their shares, accounts, liability by comes to at end of termination of partners and settling down
all the assets basically a process of discontinuation of relational between company and partner is
termination of partnership. Memorandum of association is a legal documentation which signed

by the company's shareholder that also includes business activity scope. Article of association is
another document in which all rules, regulation and activity is mention in written form that
agreed by shareholder, director of the company.
The legal business structure of UK companies
Sole Trader
Sole trader is a person who basically work on their own business and that also termed as
a self- employed person (Jones and Talbott, 2021). A sole trader run their business which
maintaining all roles and responsibility that is necessary for obtaining effective results in the
growth of their own business. Sole trader business started from the initiative taken by single
person or enterpriser. They didn't want any legal documentation or formalities for operating new
business only assemblage of business would be required and set a proper finance for its
initiation. Formation of business includes selection of firm is essential for start-up of any
business this decision basically decided by the product potential in market which is in demand
and availability of raw material and resources in adequate amount. The sole trader also on look
businesses which require less amount of investment at its initial phase that results in achieving
profit that is beneficiary for growth and that leads in excitement of person. Tax are paid by the
trader on the basis of profit that makes through annual statement of tax. They are responsible for
their depth and survival and unlimited liability are there because they run their business by own
assets and requirement and is considered as a distinct entity through their business.
As sole trader are self responsible for their growth and achievements so if there is no
increase in the growth that results in decline in the business and meet with dissolvent. The main
advantages of sole trader are only a person keep all profits and no seniors are there. Flexibility of
timing is in hand of person, simple start-up with low cost investment takes place. There is no
completion in between the employees, decision or any changes for the business which is
beneficiary would be done by individual. Disadvantages are also there for sole trader which
includes capital investment, time management, pay tax single handedly and individual is
responsible for any omission.
General Partnership
A general partnership is a arrangement of business in which more than two candidates
agreed on all assets of business majorly includes taxation, legal documentation, profit and
finance ((Keers and van Fenema, 2018. )). A general partnership is more beneficiary for startup

of some small business which have low cost investment and gian proximal amount of profit
margin. They make decision on their own for growth and achieving higher profit in the market
place. The general partnership formed by individuals which basically have knowledge on
particular area or sector so that it is easy to entering the market in effective manner. They may
take loan for start-up of business. General Partnership pay tax on the basis of their annual profit
margin. If partners invest on single business they have unlimited liabilities towards their business
because that in not in government surveillance. A business grow successfully in any sector by
increasing amount of number of share in order to gain profit. The business faces loss and their
investment are turns into declination than the partners may dissolve business and if any partner is
going through bankruptcy then also they face insolvency (Segrestin, Hatchuel and Levillai,
2021). The general partnership have advantages on which business run in appropriate manner.
Mainly there is no legal formalities, rules and regulation on which individual look upon, for
start-up of business there is no pressure and restriction on individuals, easy for decision-making.
The disadvantages basically includes unlimited liability which sometime results in negative
manner because at declination they pay form their private assets, sometime relation issue arises
and also stability is not maintained by the partners.
Partnership
Partnership is also termed as limited partnership. It is a type of partnership in which
shares of any partners is not fixed and contribute a amount of share which they can extract out
from their profit. The formation in partnership basically involve at least one general partner and
other limited partner which may be more in number. Limited partnership includes a person
which only interest in invest and no further involvement in the organisation and look on earning
from its investment (Monckton Smith, 2020). Taxation is payable by the partners but amount is
fixed on the basis of share percentage and profit margin. Each individual pay tax on the basis of
share profit and are not responsible for repayment of company depth which comes under in
limited liability. A limited partnership didn't get dissolve by limited partners or bankruptcy of
single partner unless all debt I settled down in the court or legal documentation. The advantages
of limited partnership have a number of shareholder which invest according to their finance.
From limited partnership business run in a progressive manner so that play an important role in
gaining of position in the marketplace. The strength of partner is utilised in terms of financial
support. Profit margins fixed according to share percentage. The disadvantages are requirement

of extensive documentation and general partner has more power to other in terms of decision
making. They pay excessive tax to the government and protection is in less amount for limited
partnership, no greater involvement.
Limited Liability
A limited liability includes two type i.e. limited liability company and limited liability
partnership (Travis, 2019.). At one hand, Limited Liability Company is a section of business in
which investment of any investors is in limited amount, and they didn't pay any debt of
company. Only directors and owners of particular firm get affected by any changes or loss that
would face by the company. The investors are totally free from any fear of loss. Only a company
is responsible for operation. The limited liability company pay a 19% of its profit margin . They
have liable for some taking some decision. The dissolution of business is only possible when
partners are mutually settled their share or shall be settling down with proper documentation in
the court. The main advantages of limited liability company is its status and own brand image in
the marketplace. Disadvantage is paying of higher amount of taxes to government. On the other
hand, limited Liability partnership is a section in which individual put their capital in any firm
for gaining profit and flexibility is also there for investor because they have complicated in
management. That main advantages are retain maximum amount of profit and the biggest
disadvantage is
Recommendations for IOM Solutions
According to above discussion on business organisation with structure this report
recommend suitable structure for growth and survival ship in market with better approach and
gain higher profit margin. As Sam is running a business from past 8 years as a sole trader inn a
field of selling electrical appliance's part in the market place. From past 2 year business grow
effectively and all function had been handled by Sam o it is quite difficult for maintaining
business that creates a pressure on the Sam's shoulder which apparently pull down by increasing
the number of employ and management so that Sam decide to expand business with proper plan
an execution of suitable structure (Kostruba and Vasylieva, 2020). Sam for adopting partnership
method for their business expansion because in partnership section two or more than two
shareholder can invest in expanding the business and percentage of share is not fixed it is
according to interest of investor that how much they can invests on particular business. As Sam
adopt partnership method that allow various benefits in terms of their growth. Sam act as general

partner in the business and some limited partner also invested, but they didn't take any decision
which is in favour of company. This structure have many points which is to be considered by
Sam that creates a positve impact and creates a footprint on the market in a goon manner. From
this structure many improvement in the firm can be seen and which also reflects a positive effect
on the face value of company. And it is easy to invest with more investor and taking advantage
of strength of some investors in terms of capital. Business should run in appropriate manner
when all terms and condition may followed by the Sam that creates a effective results on the
business profile. The professionalism of business show by the proper management partnership
structure is helpful for expansion of business and many new clients are also want to get touch
with organisation if business grow effectively. The tax is also payable by the company. The
formation two or more than two investors can invest in the business operation. Sam is on phase
of growth and that is very fruitful for their future.
Conclusion
In the above discussion of business law for organizing a business concluded that business
law play a essential part in management of organization in a appropriate manner by which
company get maximum amount of profit margin with less investment. And less investment is
very easy to maintain by the business holder and for their survival. For start-up of any business
some criteria should be followed by organization so that it is easy to achieve higher position.
Later this report discussed on the structure by which a organization work that includes sole
trader, general partnership, partnership, limited liability and at last this report had discussed
recommendation for Sam to opt for their growth and achievement in the market place.

REFERENCES
Books and Journals
Akbulaev, N., Aliyev, Y. and Ahmadov, T., 2019. Research models for financing social
business: theory and practice. Heliyon. 5(5). p.e01599.
Jones, S. H. and Talbott, S., 2021. Sole Traders? The Role of the Extended Family in Eighteenth-
Century Atlantic Business Networks. Enterprise & Society, pp.1-30.
Keers, B. B. and van Fenema, P. C., 2018. Managing risks in public-private partnership
formation projects. International Journal of Project Management. 36(6). pp.861-875.
Kostruba, A. and Vasylieva, V., 2020. International Regulation of Termination of Rights in the
Field of Civil and Inter-subjective State Relations. Anatoliy V. KOSTRUBA, Valentyna
A. VASYLYEVA. International regulation of termination of rights in the field of civil
and intersubjective state relations. Astra Salvensis. Supplement. (1). pp.131-153.
Monckton Smith, J., 2020. Intimate partner femicide: Using Foucauldian analysis to track an
eight stage progression to homicide. Violence against women. 26(11). pp.1267-1285.
Segrestin, B., Hatchuel, A. and Levillain, K., 2021. When the law distinguishes between the
enterprise and the corporation: The case of the new French law on corporate
purpose. Journal of Business Ethics. 171(1). pp.1-13.
Travis, A., 2019. The organization of neglect: Limited liability companies and housing
disinvestment. American Sociological Review. 84(1). pp.142-170.