Business Law: Legal Business Structures of UK Companies

This report explains the laws that regulate business in the UK, including health and safety, employment, and protection laws. It covers the legal business structures of UK companies, including sole proprietorship, general partnership, limited liability partnership, and limited liability company. The report concludes with recommendations for IOM Solutions.

Business law

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................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
Business in this report is explained as a act from which there is exchange of services and
goods in lieu of consideration. Mainly the business is done for earning extra profit for business
enterprise through selling goods and services which is being manufactured or provided through
the enterprise. There are many laws which control and direct functions of the enterprise. This is
termed as business law, these law includes health and safety law, employment law, protection
law and many more laws related to this(Begum, 2020). Which will apply on every business
enterprise, which runs in the country. However, business enterprise is for register as according to
the law of nation. But there are many kind of business which need not to be register as sole
proprietorship. This report also explain for many type of business. This report also includes
disadvantages and merits. This is also recommended to IOM Solution for choosing best fitted
business type in the last of the report after discussion of all the businesses.
TASK
Business and Organizations in UK
In UK, the business with their management is executed as according to the Companies
Act 2006. The act explain for the making of company along with their procedure. The
organisation of business functions with the assistance of their workers. The conduct of workers
and employers have to be ethical for easy functioning of the company. This conduct is mentioned
under the policy of an organisation. Each employer and employee is bound for following the
policy of the company. The law also mentions that no employer who can do unfair dismissal in
favour for the workers. The enterprise have many feature which is perpetual
succession(Biermeyer, And Meyer, 2019). This term is meant as company would continue for
even exist after dismissal or death of any board of member or shareholder. The enterprise have
separate legal entity. The company have right to sue and it can be sue by other.
Unprofessional behaviour for employee and lack of business responsibility to carry out
operation can give emergence for various liabilities in an organisation. The liability in this case is
Vicarious liabilities which arise in the business concern that operates in large scale. The liability
arises when employee behaves or act deceitfully or commit any unlawful act even for being a
part for an administration as their worker, the liability arise on as this is held responsible for the
action of worker and this must act within time in order for confront any of the problem faced

from the worker of the company. In addition, the business suffer many problem in reference of
negligent behaviour for any associate or any of the worker at time of carrying out their
obligations and roles. Director is a person who have place of head in an organisation through
which they have various roles and duties which is being given to the post it needs for perform
with caution and honesty in order to ensure that there is just business carry out on their parts.
However, when duties is well operated through directors then legal possession raise on
management because of non consummation of legal obligations through the director of the
company(Kharisma, and Hunaifa, 2022).
The director waits for performing well with authority from keeping knowledge which
have actual decision and being taken on the part in behalf of institution. Management have duty
to ensure that no fight begin within worker in an organisation, if it arise then director resolves
them from promoting harmony in an individual(Allen, And Blackham, 2018). Furthermore,
unethical behaviour from manager can make this liable for breach of duty. Therefore, the other
directors could hold that director liable for the misleading behavior of the employees. Because,
as expected, the institution must not only suffer from the mistakes of its leader. The manager
could be asked to pay compensation to the company. In addition, the contract can also be
fulfilled in the event of a serious breach of duty. Furthermore, it can also change this director
while detaining him for criminal offenses or other practices for illegal misconduct committed by
him. In addition, ownership of the institution's property together with the director could be taken
over by them even after the termination of the contract.
The Partnership Act 1890 regulates the partnership declaration, containing the provisions
that determine how a company is organized and operated, and the termination of the partnership
can also occur due to misconduct by company management(Sivani, 2019). The effective
management of the company could be done with the help of the Memorandum of Association
(MOA) and Articles of Association (AOA). The MOA is a type of legal idea that helps manage
the corporation at the time of its incorporation, but is not enforced until it is signed by the
shareholders and guarantors. In comparison, the AOA is a type of written record that defines the
institution's rules and regulations that should be followed by them when working in the
institution. Therefore, prior to its enforcement in the company, it requires the approval of
directors and owners.
The legal business structure of UK companies

Sole proprietorship, also referred to as sole proprietorship, is the business structure of
IOM Solutions, which is Sam's company. He has been there for 8 years and has expanded his
business operations over the last 2 years. In addition, the retailer offers Sam the profit of business
income if it gets into his hands. There are various legal business structures which are discussed
below as follows:
Sole trader:
This is a self-contained type of business structure managed by the only person in their
capacity. This business organization offers the gain over the inexpensive organization. Therefore,
it is very easy to open, function and operate. This is a very popular form of business among
young entrepreneurs who have developed and established their business on a very small scale.
They do this because of the availability of little capital and finance with them. It is particularly
preferred by an individual who wants to act as an owner by starting their own business in the
form of small start-ups. In addition, the sole individual is the wage earner of all net income and
earnings generated in the business organization. The decision is made one-by-one, with no
problem of one person's involvement(Giliker, 2021). The ownership control provided with this
type attracts the new businessmen. But getting private and family time out of the company is
often very difficult. Income and corporate tax must be paid by the holder and he should keep his
personal data in relation to the General Data Protection Regulation.
General partnership:
This type of company consists of two or more single people who act as general partners
along the articles of association. Furthermore, these partners conduct the business by jointly
performing all the roles and duties involved in the business organization. Shareholders shall
share profits and losses in a timely and equitable manner under the leadership of the business
organization. The memorandum of association states that the shareholders would share the costs
of incorporation, the tax risks and debts, and the benefits derived from the company. In addition,
as a result of the agreement, they become collectively involved in the company's activities and
must share joint liability in terms of risk management and accountability for any actions taken by
them in the organization. In doing so, they are dealing with unlimited personal obligation.
However, this is more reliable than a sole proprietorship due to simple investments in business
operations(Voss, and Bouthinon-DumaVos, 2020). In addition, due to the different skills and
appearance of partners, they have original decision-making, which helps to improve the

productivity of the business enterprise. But the partners get into trouble when they are
admonished to make a joint commitment because of the other partner's misconduct. This is
governed by the Companies Act, which regulates the establishment and dissolution of business
operations in the event of the death or insolvency of a shareholder.
Limited Liability Partnership:
This partnership offers a low number of liabilities compared to a general business
operation. The situation is different with regard to the establishment of the obligations if there is
a limit to the amount of money that the shareholders may spend on the business. In addition, the
company is founded by two or more partners who are personally qualified to carry out all actions
in the company. But it has no collective or common obligation. However, this requires a
registered office, which should be in accordance with the administrative order. The Limited
Partnership Act 1907 regulates an LLP by protecting the interests of the partners as well. It has
drawn up a written agreement that supports the effective functioning of the company.
Limited Liability Company:
It is also regarded as a private limited institution governed by the Companies Act 2006
which details limited liabilities. It lays down provisions on how a company is defined and
operated, what is required to form a partnership and how it can be dissolved. It has also created
legal optionals regarding the rights and duties of the directors and employees of the company
who must comply with the incorporation of the company. A director is usually the head of the
company who directs the management of the company. The company belongs to the
shareholders. It has a strong corporate identity. Owners enjoy a minimal personal
obligation(Deb, 2022).
Recommendations for IOM Solutions:
As a company grows and develops, it needs to expand in time to take advantage of the
growing opportunities in the market. It also helps the company adapt to the dynamic
circumstances. Therefore, Sam must choose a limited liability company to expand his IOM
Solutions business. This legal form offers a number of advantages. It helps to share management
responsibilities with different people. It also helps keep higher profits. It offers efficiency in tax
planning. Due to its reliability, more investors are attracted to this type, which helps in capital
formation. This also provides minimal personal liabilities that Sam can really benefit from.

CONCLUSION
From this report it can be concluded that proper social control of the business
organization is essential for it to effectively achieve its goals. Business law regulates the
operation and management of a company. Businesses are run with the goal of generating
responsibilities and profits over the longer term. They differ in type and size, and the owner
chooses their type according to his will. Sam is advised to go with a limited liability company to
expand his business. It can help him manage his personal and professional life with ease while
making huge investments that help him earn net.

REFERENCES
Books and Journals
Deb, E., 2022. International Business Law-Critical Review on Corporate Governance in
UK. Available at SSRN 4074105.
Voss, W.G. and Bouthinon-Dumas, H., 2020. GDPR Compliance in Light of Heavier Sanctions
to Come—at Least in Theory (Oxford Business Law Blog, 29 October 2020).
https://www. law. ox. ac. uk/business-law-blog/blog/2020/10/gdpr-compliance-light-
heavier-sanctions-come-least-theory. Oxford Business Law Blog.
Giliker, P., 2021. Legislating on Contracts for the Supply of Digital Content and Services: An
EU/UK/Irish Divide?. Journal of Business Law, 2021(2), pp.143-162.
Sivani, K.M.S., 2019. Critical Analysis of the Effects of Regulations under Competition Law on
Mergers and Acquisitions: A Comparison of the India, EU, US and UK Laws. Journal
of Corporate Governance and International Business Law, 2(2).
Allen, D. and Blackham, A., 2018, June. Confidentiality and Settlement: Uncovering the Hidden
Secrets of the Enforcement of Equality Law in Australia and the UK. In Berkeley
Comparative Equality & Anti-Discrimination Law Study Group 2018 Conference at
Melbourne Law School at the University of Melbourne.
Biermeyer, T. and Meyer, M., 2019. Do UK companies make use of corporate mobility
instruments to ‘escape’Brexit?.
Begum, A., 2020. Corruption in business: A critical appraisal of the Australian regulatory regime
in the light of the UK Bribery Act 2010. Journal of Financial Crime, 27(3), pp.735-754.
Kharisma, D.B. and Hunaifa, A., 2022. Comparative study of disgorgement and disgorgement
fund regulations in Indonesia, the USA and the UK. Journal of Financial Crime.