Business Law: Legal Business Structures in the UK

This report discusses the various types of businesses that can be run in the UK and outlines the different advantages and disadvantages of each. It also provides recommendations for IOM Solutions and discusses the legal business structures in the UK.

Business Law

Table of Contents
INTRODUCTION ..........................................................................................................................3
Business and Organizations in UK..................................................................................................3
The legal business structure of UK companies................................................................................4
Sole trader:..............................................................................................................................4
General partnership:...............................................................................................................5
Limited Liability Partnership:................................................................................................5
Limited Liability Company:...................................................................................................6
Recommendations for IOM Solutions:............................................................................................6
CONCLUSION ...............................................................................................................................6
References........................................................................................................................................7

INTRODUCTION
The business is termed as the process of selling and purchasing the goods and services in
the market. The laws that discuss about the provisions of the business are known as the business
law. These laws helps the business in operating its several activities in the business organisation.
The United Kingdom has various types of business laws such as employment law, Equality Act,
2010, etc. These laws are to be abide by all the individuals of the society(Adamou, Kyriakidou
and Connolly, 2021). There are also various safety laws and health laws that are applicable to all
the business organisation. It provides for various rights of the workers who are working in an
organisation. This report would discuss about the various types of businesses that can be run in
the nation. It would also outline about different advantages and disadvantages business firms.
This report would also recommend the IOM Solutions for changing its business.
Business and Organizations in UK
The businesses in UK is run according to the Companies Act. The company act provide
for the various principles that has to be followed by every business organisation. The business
are operated with the help of various employees in the business. These employees are being
recruited by the employers of the company. The employees also has various rights under the
company act of UK. There is a certain relationship between the employer and the employee of
the company. These relations are managed from both the sides of individuals involved in it.
There are certain obligations that has to be followed by both the employer and the employee as
per the company act(Audretsch and Belitski, 2020). These obligation include the unfair treatment
of the employees. The employer can not treat unequally the employees of the company. If there
is any presence of mistreatment between the employees, then the employee can take legal
remedy under the court of the country. Moreover, the employer should also not do unfair
dismissal as per the employment law of UK. The company has various features. One such feature
is perpetual succession an common seal. The perpetual succession means that the company
would continue to survive even after the death of any of the board of directors of the company.
In addition to this, the company an sue and can also be sued under the courts of the nation.
The concept of vicarious liability is very much known in the business. This is the master
and servant relationship. The employer is the master and the employee is the servant. The
employer is also liable for the acts done by his employee during the course of the duty of

employee. In addition to this, if the employee does any act on the directions of his employer,
then also the liability would be held on the head of the employer for any wrongful acts done by
its employee. The director is the chief head of any organisation. The organisational policies are
framed according to the director of the company. All the major decisions for the company is
always taken up by the director of the company. Moreover, the director has the distinct legal
identity in comparison with the company's identity. The negligence is the condition where an
individual neglects to perform his duty and due to such neglect loss is occurred to the other party
of the case. So, negligence is a type of tort(Billis and Rochester, 2020). The negligence is a act
which provides for the remedies to the third party of the case. The director has the duty to frame
the best policies for the company in order to grow and develop it in the most efficient way. In
addition to this, the director should also cater the needs and the rights of the workers of the
company. The Memorandum of Association is signed at the time of incorporation by all the
shareholders of the company. This provides for the day to day functioning of the business
organisation. The Article of Association provides for the long term aims and objectives of the
business organisation. So, the main difference between both of them is the one is stating about
the rules for regular activities of the business and the other one is stating about long term goals of
the business organisation. Both the documents are the essence of any business arrangement in the
country. In the absence of this, no business organisation can run freely.
The legal business structure of UK companies
Sole merchant also called as the Sole proprietorship is the concern structure of IOM
Solutions that is the endeavour of Sam. He has been engaged in it for 8 years and in recent 2
years has grown his enterprise concern. Moreover, Sole trader gives the profit to Sam by
business income when it comes in his hands. There are various legal business structures that are
being mentioned below as follows-
Sole trader:
This is a self kind of business structure which is managed by an individual in its ability.
This business arrangement offers the profit with regard to the organisation that is cost amiable.
Hence, it is too easy to open, function and operate. This is too popular form of enterprise kind
among the young enterpriser who has developed and constituted its business on a very small
scale. This can be done by the accessibility of low capital and funds with them. It is generally

preferred by a single person who needs to act as a proprietor by opening its own business by the
form of small start ups. Therefore, the sole individual is earner of total the net income and
revenues which is being generated in the business arrangement. The decision are taken
independently without any difficulty of involvement of any individual. The ownership control
render with this kind attracts the new business individuals. But, by the personal and family time
out of the business is often very hard. The Income and corporation tax is to be paid by the owner
and they should keep data of its customised with respect to General Data Protection
Regulations(De, et.al, 2021).
General partnership:
This kind of business includes two or more than two individuals who gets involved as
general partners in the agreement of the partnership. Moreover, these partners move out the
business by collectively doing all the functions and duties which is being involved in the
business administration. The partners have to divide the profits and losses on a regular and yearly
basis with balanced part while managing the business arrangement. The partnership contract
explains that the partners must share the costs of establishment, the financial risks and liability
and too the welfare that are obtained in the concern. Moreover, due to the concord it get
collectively involving towards the dealings of the business endeavour and have to keep joint
possession with respect to governance of risks and answer cognition of all the actions used by it
in the arrangement. Thus they get taken up with unlimited personal duty and responsibility. But
this is more certain than a sole trader due to easy investments in the business arrangement.
Moreover, also due to various skills and occurrence of partners it has the originative decision
making that aids to amend the productivity of the enterprise concern. But the partners face
trouble at the time they are admonished for the unlawful actions of other partner she to joint
duty. This is governed by the partnership act that explains the arrangement and dissolution of the
business endeavour in case any of the partner stick out death or the financial weak
condition(Finer, et.al, 2018).
Limited Liability Partnership:
This partnership explains a low amount of liabilities with comparison to a general
business concern. In reference to the creation of the liability where there is restriction on the
money that could be spent by partners on the business administration. Moreover, the business is
organized by two or more partner that are impersonally capable for all the acts taken in the

business organisation. But it do not have joint duty. But for this, a registered office is necessary,
that should be in accord to the government command. The limited Partnership Act 1907 regulate
an LLP by also saving interest of the partners. This has a creation of written agreement which aid
in effectual functioning of the concern. The partners are free to work in this type of firm instead
there are also some obligations that has to be fulfilled by the partners. There is no personal tax
liability on the partners in this type of business arrangement(Foryś and Jarosz, 2019).
Limited Liability Company:
The limited liability company is the business enterprise where the partners has the limited
liability for the operations and debts of the business. This means that if any loss is incurred in the
business then the partners are not personally liable for it. This would help the partners in saving
their personal assets in case of loss to the partnership firm. There are also various benefits of
being in a limited liability company which includes freedom from the total debts of the company.
The tax liability of this type of firm lies under the name of the business firm. The company has
the perpetual succession. Along with this, the company has its common seal that is used in all the
operations of the business this means that all the operations like sale and purchase of the business
is done under the name of the company. The company also has number of shareholders. This
means that the company is required to make decisions based on the top management of the
company. The top management is liable to frame the adequate policies for the company.
Moreover, these policies has to be followed by each employee of the company.
Recommendations for IOM Solutions:
The time period where the business grows and develops needs timely expansion so that it
can take benefit of the growing chances in the market. It also aids the business to accommodate
with the dynamic conditions. Thus, Sam should opt limited liability company for growth of his
business, IOM Solutions. The legal structures of this type of firm offers a range of benefits. It
aids to share the duties of the management with different singles. It also aids to retain higher net
income. It offers efficiency in tax preparation. More investors are pull in to this kind due to its
reliable nature, hence aiding in capital formation. This too offers minimum private liabilities
which can really welfare Sam(Palombo, 2019).

CONCLUSION
It can be concluded from this report that adequate social control of the business
arrangement is necessary so that it purpose effectually. Business law regularize the operations
and behaviour of a business. Concerns run with the intent of earning legal power and profits in
the long run. They vary in its kind and size and the proprietor select their type reported to their
will. Sam is suggested to opt for Limited Liability Company for the enlargement of his business.
It can aid him in carry off his private and professed life with ease while also getting huge
investments that would aid him in earning net profit for the firm. So, he should opt for the
limited liability firm. Moreover, this report also summarises about the benefits of various types
of business arrangements along with its tax liability in UK.

References
Books and Journals
Adamou, M., Kyriakidou, N. and Connolly, J., 2021. Evolution of public-private partnership: the
UK perspective through a case study approach. International Journal of Organizational
Analysis.
Audretsch, D.B. and Belitski, M., 2020. The limits to collaboration across four of the most
innovative UK industries. British Journal of Management, 31(4), pp.830-855.
Billis, D. and Rochester, C. eds., 2020. Handbook on hybrid organisations. Edward Elgar
Publishing.
De la Hunty, A., et.al , 2021. UK Nutrition Research Partnership (NRP) workshop: Forum on
advancing dietary intake assessment.
Finer, S.,et.al , 2018. Setting the top 10 research priorities to improve the health of people with
Type 2 diabetes: a Diabetes UK–James Lind Alliance Priority Setting
Partnership. Diabetic Medicine, 35(7), pp.862-870.
Foryś, I. and Jarosz, K., 2019. A Public-private Partnership or an Operating Leaseback:
Alternative Sources of Financing Public Purpose Real Estate in Poland. World of Real
Estate Journal, 110(4), pp.29-46.
Palombo, D., 2019. The duty of care of the parent company: A comparison between French law,
UK precedents and the Swiss proposals. Business and Human Rights Journal, 4(2),
pp.265-286.