Business Law: Types of Business Structures in the UK

This report covers the different types of business structures in the UK under the purview of the Companies Act, 2006. It discusses Sole Trader, General Partnerships, Partnerships, and Limited Liability. Recommendations for IOM Solutions are also provided.

Business Law

Table of Contents
INTRODUCTION ..........................................................................................................................3
Setting up of Business and Companies in the United Kingdom......................................................3
The Legal Construction of Business of the United Kingdom Companies ......................................4
Sole Trader ......................................................................................................................................4
General Partnerships........................................................................................................................5
Partnerships......................................................................................................................................6
Limited Liability..............................................................................................................................7
Recommendations for IOM Solutions.............................................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The framework relating to the Business Law which is grows to assists the companies on
the land of United Kingdom. The formation of the organisation and the technicalities which
provide the course of action for the organisation comes under the purview of the Companies
Act,2006 of the United Kingdom. The directives which are prescribed in the act were carried
down by the Parliament of the United Kingdom. In the scope of the enactment the regulations
which are mentioned in the business law get from one of its sources which is the European
Union Law and the laid down principles of the Common Law. Every operational functions, their
working and the management rulings are covered in the state of affairs of the business law (Cott,
2021).
This report will mention various divisions of companies which are reflected in the
corporate world of the United Kingdom which involves, Sole Proprietorship, Partnership,
Limited Liability Partnership and the Limited Liability Company. The course of actions which
subsequently works within the provisions of the act will cover the events of the company.
Furthermore, this report will discuss poles apart edifice formation of the business within a
suggestion to the sole trader which will be feasible as type of business which will advance the
development variable for the company.
Setting up of Business and Companies in the United Kingdom
In the extent of formation of a business phase, there are plenty of circumstances which
are to be looked after before its precise construction. The collective conduct of an organisation
needs assembled directives, mentioning the state of affairs of the company. The structure of the
organisation works along with its members and that is how the positioning stays intact within the
working conditions (Cumberlege,2018.). There are different types of department in the zone of
the cooperate world which includes, the department of human resource, the management
department, manufacturing and distribution department and much more divisions which provide

assistance in the formation of a company. The enactment which gives about the controls methods
for the organisation, which states the regularities techniques in the form of enactments, such acts
is a bridge to walk for the companies, such as Employment laws, Health & Safety Law, Laws of
taxation, Minimum Wages Act and Formations of Company Act. The provisions which are
mentioned under the rules of the Employment Law, it eventually cover the provisions which
tends to be beneficial for the Employees, it is said that the laws of employment are partial
towards the employees or the workers (Márta,2021.). The laws of employment stand above and
safeguard the rights of the employees, safeguard them of practices which involves
discrimination, unfair dismissal, salary and leaves issues etc. There are the objectives, aims and
values of the organisation which are to be protected at any cost , the by-laws which are made
within the constitution of the company must be followed by every members of the firm.
When considering the framework of the firm, the designation which is gravitated to be at
the foremost level, is the director of the organisation, who works along with other board of
directors and for the benefits and development of the company and the member of the office. The
construction of the firm, goes to the first of registration which needs to company and the
founders to submit the necessary documents, follow the steps o the registration directives in
order to get their company licensed (Sterzi, Rameshkoumar, and Van Der Pol,2021.). The
establishment of the organisation, does require the clean chit before registration of the company,
with the unfolded activities of the company. The registered also needs the application of two
major documentation, first being the memorandum of Association and the second being the
Article of Association.
The Legal Construction of Business of the United Kingdom Companies
The thread of legitimacy which is essential to be involved in the scope of an organisation.
The solid course of action which is provided and does differ from organisations to organisation.
The understanding of the state of affairs and the formation of the business is crucial for an
individual before setting up an organisation.
Sole Trader
An individual can be termed as sole trader when the individual tends to be the sole owner
of the organisation or business. The formation of a business which is operational at its values but

tends to have no separate entity entirely. There is no hitch of division of labour, the amounting
works is solely on the shudders of the owners who is operating and functioning the business on
individual self (Trevor, 2019.). The liabilities of the business is gravitated to be on the sole
owner of the company.
ADVANTAGES
 There is no need for any registration process or legalities involved for establishing sole
trader organisation
 The need for investment or funding is very ow in the scope of sole trader organisation.
 The extent of sole trader is considered to be the best choice possible for the small scale
business.
DISADVANTAGES
 Determined to have no separate legal entity
 The owner is considered to be the liable personality for all the happening or affairs of the
company
 Hitting the mile stone, as within the purview of sole trader the sole owner has all the
profits
General Partnerships
The understanding the perspective of the genera partnerships. Which comes under the
picture when they are two or more then two individual associated within the working
arrangement of the company (Lemassel,2020.). The assets, the profits and everything else from
the liabilities to risk everything in the type of business formations is divided between the
partners. The formation of general partnership enhances its way from the provisions of
Partnership Act 1890. the terms of general partnership overviews the partners to get into the team
and the enter in the agreement with the partner, to form the partnership company.
ADVANTAGES

 The process of registration is less complicated and trivial much in the nature of the fiscal
values, which is to be paid at the time of registration.
DISADVANTAGES
 The establishment of the genera partnerships, there is termed to be no source of separate
legal entity.
 The scope of liability which is process in the general partnerships tends to be unlimited
 in the state of affairs of the organisation formations, if done any mistakes, negligence or
fraud, gravitates to make the partners equally responsible for it.
Partnerships
The compass of limited partnerships is determined under the enactments of the Limited
Partnership Act, 1907. Under the scope of the partnerships, the business formations does not
process to have any separate legal entity (Giliker,2021.). The extent of the partnership
organisation, the individuals termed as partners has choice to take the division of limited
partnerships to put curtailment. Limited partnerships encompasses identical fundamentals to
general partnerships. The registration process of limited partnerships takes place in the
Companies House to lead for the development of the organisation.
ADVANTAGES
 The areas which are determined to be burdensome tends to be lessen with the effect of
indulging more then two partners in the organisation.
 The criteria of lending money extends its way in the terms of partnerships
 The cost of investment process can be decreased when process within the source of
partnerships.
DISADVANTAGES
 In the purview of partnerships, there tends to happen unlimited liabilities which amounts
to debt in the scope of business regarding partnerships.
 There is difference of opinions between the partners

Limited Liability
The lie of corporate is shiny as well as difficult to set up business. The scope of limited
liability determined when the partners tends to have separate legal entity (Corbello,2021). The
entitlement of the limited liability partnerships covers under the provisions of Limited Liability
Partnership Act, 2000. Under the scope of the limited liabilities the obligations are incorporated
on the members and the structure which comprises of the partnerships tends to be created by the
private agreement which is made between the partners (Varshney, 2021.). The liability collects
with the conduct of tax paying is similar tot he conduct of partnerships.
ADVANTAGES
 The framework of separate legal entity is not abstracted but absolute
 The course of actions regarding to the investment getting into the firms, will be divided
and the liability will be imposed on the partners.
 The state of affairs of maintenance relating to the capital valuation which is considered to
be less
DISADVANTAGES
 The registrations process in the terms of limited liability partnerships is mandatory
 The consultation of incorporation will be done in the scope of the Company House
 The valuation of levy is much higher in the extent of limited liabilities partnership under
the Company House
 When deciding the name of the company, which needs to be unique. Similar names of the
company can lead to issues for the organisation.

Recommendations for IOM Solutions
The template structure of IOM solution tends to be covered as it states as the sole trader.
The operational functions of this company, is it deals with the electric appliances and solutions
and sell the electrical parts in the county garages. Overview of the company describes as, Sam is
determined as the sole owner who is running the company for almost eight tear now. According
the explanation of the above report, the recommendation which is provided to Sam, sole owner
of the IOM Owner is to take the arrangement plan of the business and turn it into the limited
liability partnerships (Bezruchko,2019). The reason behind choosing limited liability
partnerships is Per Se, because it entitles legal separate entity for the scope of business and the
partners. The business regularities of business values will be separated from the owner and the
business values will be different for the partners. Furthermore, to it it will turn out be conceive
more advantages to have dual partnerships within the business structure. The partnerships
findings tends to have separate to have liabilities for the partners, that clearly means the partners
will not be moved liable for the unfortunate events done by other partners.
Therefore, the precise recommendation which could be beneficial for IOM solutions is
choose the business structure of limited liability partnership which will enhance the capabilities
and advancing the success ladder for the company.

CONCLUSION
The above report will prescribe that is the definitive fundamentals that the postulates factors
which are seen in the scope of business structure. The elements of business and its formations
within the scope of various sides in the organisation is wide enough to look for, the overview of
the report states different kinds of business structure. For the extent of IOM solutions, it will
provide advantages for the business to grow and skilled the measurements to development role.
Under the scope of United kingdom, there are various business functions and structures such as,
General partnerships, Sole Trader, Limited Liabilities Partnerships and much more. The option
which will prevail betterment to IOM Solutions, turns to be Limited Liability Partnership.

REFERENCES
Books and Journals
Bezruchko, A.E., 2019. FINANCE OF BUSINESS PARTNERSHIPS AND COMPANIES.
In Проблемы и перспективы развития современной науки (pp. 63-65).
Corbello, F., 2021. Directors’ duties and liabilities across Italy, UK and USA.
Cott, P., 2021. Legal matters: What is the best business structure for you?. Electrical Connection,
pp.36-37.
Cumberlege, J., 2018. Why companies and not partnerships?. Practice Management, 28(4),
pp.36-37.
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.
Lemassel, M.M., 2020. Regulations of financial institutions in the US/UK.
Márta, P.B., 2021. General Partnerships and the Fiduciary Duty in the US Legal System. Pro
Futuro, 10(4).
Sterzi, V., Rameshkoumar, J.P. and Van Der Pol, J., 2021. Non-practicing entities and
transparency of patent ownership in Europe: the case of UK dormant
companies. Technological Forecasting and Social Change, 172, p.121069.
Trevor, M., 2019. Japanese Companies in the UK. In The Internationalization of Japanese
Business (pp. 13-27). Routledge.
Varshney, M., 2021. Has the Limited Liability Partnership Model Provided an Effective
Alternative to the Complexity of Incorporation and the Personal Risks Associated with
Partnership Law. Issue 4 Int'l JL Mgmt. & Human., 4, p.657.