Business Law: Legal Business Structures in the UK

This report discusses the legal business structures in the UK under business law, including sole trader, general partnership, limited liability partnership, and limited liability company. It also provides recommendations for IOM Solutions. The report emphasizes the importance of correct social control of business organizations and the regulation of business operations and conduct.

Business Law

Table of Contents
INTRODUCTION ..........................................................................................................................3
Business and Organizations in UK..................................................................................................3
The legal business structure of UK companies................................................................................5
Sole trader:..............................................................................................................................5
General partnership:...............................................................................................................5
Limited Liability Partnership:................................................................................................6
Limited Liability Company:...................................................................................................6
Recommendations for IOM Solutions:............................................................................................6
CONCLUSION ...............................................................................................................................7
References........................................................................................................................................8

INTRODUCTION
The term business could be explained as an act by which there is the goods and services
are being exchanged against the consideration given by the other party. The business is
principally done to earn more and more earnings for the business arrangement by selling the
goods and the services which is being manufactured by the institution. There are various laws
which directs and power the functioning of the concern. These laws that govern the businesses
are termed as business law. The corporal law includes the employment laws, protection laws,
health and safety laws, etc. which is being applicable on every concern that is running in the
country(Adelopo and Meier, 2022). Moreover, the business arrangement is to be registered
according to the law of the country. But there are different types of concerns that need not to be
certified like sole proprietorship. This report too explains about the various types of businesses.
It would too outline about its advantages and disadvantages of the firm. It would also
recommend the IOM Solution to decide the best fitted business kind at the last of the report after
discussing all businesses.
Business and Organizations in UK
In the state UK, the business along with its administration is done according to the
Companies Act of 2006. This act states about the formation of the institution along with its
process. The business arrangement functions with the aid of the employees. So, the behaviour
of the worker and employer must be right for the smooth running of the company. This conduct
is engrossed under the policy of the arrangement. Every leader and employee is conjugated to
follow these regulations of the company. The law too provides that no leader can do the unfair
dismissal in the inclination of the employee. Moreover, the company has different features such
as perpetual series. The term perpetual succession would explain that the company continue to
survive even after the removal or death of any of associate of the board or shareholder. The
company too enjoys the status of detached legal entity. The company could be sue or can be sued
by any other individual or organisation(Ali, 2020).
The unskilled behaviour of worker and deficiency of the business duties and obligations
in carrying out the dealings could give growth to various liabilities in the arrangement. One such
possession in this case is the Vicarious liability which arises among the concern that is being run
at a larger scale. These possession start when a worker acts or act deceitfully or commits any

unlawful act. This is even still being a division of an administration as its worker, then liability
comes on the leader as it is held liable and accountable for their workers acts and thus it must
work within time in order to meet any problems faced by the workers of the institution. In
addition to this, a business too suffers from different other problems in regard to the negligent
behaviour of any subordinate employee while carrying out its functions and obligations. The
director is the respective who is given place of structural head by which they have various roles
and duties which is being given to its post that it requires to perform with honesty and caution in
order to guarantee there is just concern carried out on its portion. Moreover, when the
responsibilities are not operated well by the manager then the legal ownership arise on the
administration due to non consummation of the legal obligations by the manager of the company.
The director is expected to perform good with all the authority by keeping the cognition
that the proper conclusion are being taken on its part on the side of the institution. The
administration has the duty to assure that no fights arise between the individual in the
organization, if it originates then the director must solve them by advancing the harmony
between the respective. Moreover, the unethical actions done by the manager can sort it liable for
breach of responsibility. Therefore, the other directors can be held liable to the director for the
mislead action of the employees. This is so as it is expected that establishment must not suffer
only because of the mistakes of its higher manager. The manager could be asked to supply to the
company by providing for the compensatory damages in case of loss to the company. Moreover,
the contract can too be completed if there is occurrence of serious breach of duty. In addition to
this, this can too change the director while keeping him with criminal operations or other
practices for banned malpractices done by these individuals. Moreover, the ownership of the
institution holding along with the director would also be taken by them after the wind up of the
contract(Faour, Kuriand and Todd, 2020).
The Partnership Act of 1890 regulates the statement of partnership by providing the
provisions which lays down the procedure about how a company is constituted and how it is
being run and expiration of partnership would also happen as of the malpractices committed by
the management of the institution. The effective administration of the business would be happen
with the help of Memorandum of Association (MOA) and Articles of Association (AOA). The
MOA is a kind of legal idea that assist to manage the preparation of the company at the time of
incorporation of the company but is only implemented when it gets signed by the stockholder

and guarantors. Moreover, on comparison to this, the AOA is a kind of written evidence that
defines the rules and regulations of the organization which should be followed by them by
running in the institution. Thus it needs the consent of directors and owners earlier its
enforcement in institution.
The legal business structure of UK companies
Sole trader is also known as the Sole proprietorship. This is the business structure of IOM
Solutions which is the enterprise of Sam. He is being employed in it for 8 years and in past 2
years has grown up his business concern. Moreover, the Sole trader supplies the profit to Sam by
business profits when it comes in his hands. There are various legal business types that are being
detailed below as follows-
Sole trader:
This is a self job kind of business constitution that is managed by the sole individual in its
capability. This business arrangement offers the profit with regard to the arrangement which is
cost amiable. Therefore, it is very easy to open, purpose and run. This is a very used form of
enterprise kind among the young enterpriser who has developed and constituted its business on a
very small scale. Moreover, they do so because of the accessibility of low capital and finances
with these business enterprises. It is specifically preferred by a single person who wants to act as
a businessman by starting its own concern by the form of the small beginning up of the firm.
Moreover, the sole respective is the wage earner of all the net earnings and revenues which is
being generated in the business arrangement. The decision are taken independently without any
problem of engagement of any person. The possession of control provided with this type attracts
the new concerned people(Jones, et.al, 2021).
General partnership:
This kind of business includes more than two individuals. These individuals are known as
the partners of the company. These partners share all the responsibilities of the partnership firm.
There are several types of partners such as active partner, sleeping partner, managing partner,
etc. All these partners are responsible for the workings of the business arrangement. These
partners also share the profits and losses between them in the business organisation. The tax
liability held under the partnership firm name and not independently on the partners of the
company. Moreover, the partnership firm has various benefits. These benefits are to be enjoyed

by the all the partners such as shared liability, shared responsibility of the business organisation.
The partnership firm too has demerits which includes the share in the loss of the firm by all the
partners to the extent of capital invested by them in the partnership firm. Moreover, the other
partners also has to suffer because of the wrongful acts done by one partner in the partnership
firm(Gayathri, 2020).
Limited Liability Partnership:
This partnership has the main concept that the partners has the limited liability in the
business. This means that the partners has no need to pay the debts of the partnership firm from
their personal assets. Moreover, the partners are also allowed to share the business responsibility
in the business organisation. The tax liability also held on the name of the partnership firm.
Moreover, there are certain demerits and merits of the partnership firm. This includes that the
partners has to share the losses of the business to the extent of the finance in vested by these
partners in the partnership firm. So, this type of partnership has the collective liability on all the
partners of the business firm. These firms are governed by the law of Limited Partnership Act,
1907(Paull, 2020).
Limited Liability Company:
The limited liability company is another type of business firm that is being operated in
UK. This type of company has its separate legal identity in the eyes of the law. Moreover, the
company has to fulfil all the legal obligations as per the company act of UK. The company has
the perpetual succession. There are so many shareholders in the company. These shareholders
invest their capital in the company. At the end of the financial year, the profits are being shared
in these shareholders. In case of loss in the company, no profits is shared by the company among
its shareholders. In addition to this, the bonus is also shared among the shareholders of the
company. The tax liability is also on the name of the limited liability company and not
individually on the director of the company(Senevirathne, 2019).
Recommendations for IOM Solutions:
The business grows and develops it needs timely expansion so that it can take reward of
the growing possibility in the market. It also assists the business to adapt with the changing
circumstances. Therefore, Sam must choose limited liability company for the increase of his of
IOM Solutions. This legal composition offers a range of goodness to Sam. It assist to share the

duties of the management with various individuals. It also assist to retain higher profits. It gives
efficiency in tax planning. Hence, more investors are attracted to this kind because of its reliable
nature, this assist in capital formation. This likewise offers minimum private liabilities which can
really help Sam(Zhang, 2022).
CONCLUSION
It can be concluded from this report that correct social control of business organization is
necessary so that it purpose effectual. Business law modulate the operations and conduct of a
enterprise. Businesses run with the goal of earning power and profits in the longer period of time.
They differentiate in their type and size and the owner choose their kind reported to their will.
Sam is advisable to opt for Limited Liability Company for the enlargement of his business. It can
assist him in carry off his individualised and professed life with simplicity while also getting
huge investments that would help him in earning the profit for the company.

References
Books and Journals
Adelopo, I. and Meier, F., 2022. UK professional accounting bodies (PAB): Members’ unethical
behaviors and exclusion. Journal of Corporate Accounting & Finance.
Ali, R., 2020. International Insolvency Regimes and Rescue Measures Particularly with
Reference to the USA and the UK. Journal of Law & Social Studies (JLSS), 2(1), pp.26-
33.
Faour-Klingbeil, D., Kuri, V. and Todd, E., 2020. Comparison of hygiene standards and food
safety practices between sole-proprietor and corporate-managed restaurants in
Lebanon. British Food Journal.
Jones, P., et.al , 2021. An exploration of the role and contribution of entrepreneurship centres in
UK higher education institutions. Journal of Small Business and Enterprise
Development.
Paull, B., 2020. COVID-19: Changes to the UK insolvency framework.
Senevirathne, S.A.G., 2019. Quazi-juristic Personality of Sole Proprietorships and Partnerships
in Sri Lanka and its Causes and Consequences.
V., Gayathri, 2020. Comparison of UK Companies Act 2006 and Indian Companies Act
2013. Issue 3 Int'l JL Mgmt. & Human., 3, p.632.
Zhang, Y., 2022. The Transplant Problematics of Hostile Takeover Defense: A Comparative
Look at the US'and the UK'Models. Indon. J. Int'l & Comp. L., 9, p.3.