Business Law: Legal Business Structures in the UK

This report discusses the various legal business structures in the UK, including sole trader, general partnership, limited liability partnership, and limited liability company. It outlines their advantages and disadvantages and recommends the limited liability company for IOM Solutions. The report also covers the conduct of employees and employers, the Companies Act of 2006, and the Partnership Act of 1890.

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 word business could be explained as act through which there is the exchange of the
goods and services against the consideration. The business is mainly done to earn more and
more profit for the business organisation by selling the goods and the services that is being
manufactured by the company. There are several laws that directs and controls the functioning f
the business. These are termed as the business law. The corporate law includes the employment
laws, health and safety laws, protection laws, etc. that is being applicable on every business
concern which is running in the country(Adelopo and Meier, 2022). Moreover, the business
organisation is to be registered as per the law of the nation. But there are various types of
businesses that need not to be registered like sole proprietorship. This report would explain about
the various kinds of businesses. It would also outline about its merits and disadvantages. It
would also recommend the IOM Solution to choose the best fitted business type at the last of the
report after discussing all the businesses.
Business and Organizations in UK
In the nation UK, the business along with its management is done as per the Companies
Act of 2006. This act explains about the formation of the company along with its procedure.
The business organisation functions with the help of the employees. So, the conduct of the
employees and employer must be ethical for the smooth functioning of the company. This
conduct is written under the policy of the organisation. Every employer and employee is bound
to follow these policies of the company. The law also provides that no employer can do the
unfair dismissal in the favour of the employee. The company has various features such as
perpetual succession. The term perpetual succession means that the company would continue to
exist even after the dismissal or death of any of members of the board or shareholder. The
company also enjoys the status of separate legal entity. The company can sue or can be sued by
anyone(Alanazi and Hassan, 2018).
The unethical behaviour of worker and lack of the concern responsibilities in carrying out
the dealings could give emergence to different liabilities in the organisation. One such
obligations in this case is the Vicarious liability that originate among business concern that is
being operated at a larger scale. Liabilities start when a worker acts or acquit deceitfully or
commits any unlawful act even still being a section of an administration as its worker, then

liability comes on the leader as it is held responsible for its workers actions and thus it must act
within the specified time in order to confront any problems faced by the employees of the
company. In addition to this, a concern also suffers various difficulties in reference to the
negligent nature of any associate or worker while doing out its function and obligations. The
manager is the individual who is the place of structural head by that they have different roles as
well responsibilities that are being given to its post that it needs to perform with honesty and
caution in order to assure there is just business carried out on its section. Moreover, when the
responsibilities are not operated well by the manager then the legal possession originate on the
management because of non consummation of lawful compel by manager of the
company(Alqatan, Chbib and Hussainey, 2019).
The director is awaited to do well with authority by keeping the knowledge that the
correct decisions are being interpreted on its part on sake of the institution. The management has
the duty to assure that no fights uprise between the worker in the arrangement, if it arises then
the director must resolute them by boosting the harmony between the individuals. Moreover, the
unethical action by the manager can make it liable for failure of duties. Therefore, the other
directors could hold that director liable for the mislead behaviour of the employees. This is
because as it is expected that institution must not suffer only due to the mistakes of its head. The
director could be asked to give cure to the institution by giving for the compensatory damages.
Moreover, the contract could too be completed if there is happening of serious breach of duty. In
addition to this, it can also change this director while holding him with wrong offence or other
activity for illegal wrongdoing done by them. Moreover, the possession of the institution
belongings along with the director could also be interpreted by them after the completion of the
contract.
The Partnership Act, 1890 regulate the statement of partnership by giving the viands that
lays down about how a institution is framed and how it is being run and expiration of partnership
could also go on because of the malpractices done by the administration of the company. The
effectual management of the business concern could be go on with aid of Memorandum of
Association (MOA) and the Articles of Association (AOA). The MOA is a kind of lawful idea
that aid to carry off the arrangement of institution at time of its consolidation but only enforced
when it gets subscribed by the stockholder and surety. On comparison to this, the AOA is a kind
of engrossed evidence that is explains the rules of institution which would be followed by it by

running in institution. Hence, it needs the consent of managers and proprietor before the
enforcement in institution(Faour, Kuri and Todd, 2020).
The legal business structure of UK companies
The Sole merchant also called as the Sole proprietorship is concern constitution of IOM
Solutions that is enterprise of Sam. Sam is employed in it for the period of 8 years so in recent 2
years is grown up the business concern. Moreover, the Sole trader requires the earnings to Sam
by concern organization profits when it comes in the workforce. There are different legal
business structures that are being discussed below as follows-
Sole trader:
This is a self work kind of business structure that is done by the sole individual in its
ability. This business organisation connects the profit with respect to the organisation that is cost
amiable. Hence, it is very easy to start function and run. This is a very favourite kind of
enterprise form among young enterpriser that has developed and established its concern concern
on a very small way. It is due to the accessibility of low capital as well the finances with them. It
is specifically desirable by a individual who needs to act as a proprietor by opening its self
business by the kind of the small start ups. Moreover, the only individual is wage earner of all
the net income and earnings that is being made in the business organisation. The decision are
being taken severally without any difficulty of involvement of any person. The ownership
control has provided with its type attracts new business individual. But, getting the private and
family time concern is often very difficult. The Income tax is to be given by proprietor and it
should keep information of its customised with relate to General Data Protection
Regulations(Grail, et.al, 2020).
General partnership:
It is the kind of business pertain two single who get concerned as generic partners along
the business consent. Moreover, these partners do the concern by jointly doing all the functions
and duties that is being involved in the arrangement. The partners have to part the profits and
financial loss on a punctual basis with balanced balance while succeeding the business
organization. The agreement of partnership states that partners would share the cost of the
constitution, the fiscal hazards and debts and too the profit that are obtained in the concern.
Moreover, due to the contract it get jointly participating towards dealing of the concern

enterprise and have keep joint possession for administration of danger and answer ability of all
the act used by it in the organisation. Thus it get afraid with limitless personal obligation. But
this is extra reliable than a solitary trader due to simple funds in the business concern. Moreover,
also due to different skills and occurrence of the partners they have originative decision making
which helps to amend the fruitfulness of the concern. But the partners face trouble when they are
admonished for the wrongful actions of the other partner she to joint obligation. This is
controlled by partnership act which defines the organization and dissolving of the concern
enterprise in case any of the individual endure decease or the insolvency(Hardman, 2022).
Limited Liability Partnership:
This business provides a low number of obligations the compared to broad business
concern. It is unusual with reference to the initiation of the limitation where it is restriction on
the sum of money which could be done by partners on business concern. Moreover, the business
is integrated by two or more persons that are individually capable for all act done in enterprise
concern. But it does not has the joint obligation. But for this, a registered office is necessary, that
must be in conformity to government order. The limited Partnership Act 1907 rules an LLP by
also saving the interest of partners. This has a created a written agreement that aid in effectual
running of the concern.
Limited Liability Company:
This is too taken as a private limited institution where it is ruled by Companies act 2006 .
It gives details of limited obligations. It too lays down the options that explains how a company
is being defined and also operated, needs to form a private institution and how this can be melted
in the market. It too creates a legal facultative with respect to the duties of heads and associate of
the institution that must be stay on by the establishment of the institution. Director is mainly the
chief of the institution whose main function is to execute the establishment. The institution is
owned by shareholders. Moreover, it has a separate legal corporate identity. The owners in this
enjoy minimal personal obligation.
Recommendations for IOM Solutions:
The firm should go for the limited liability company. This is as it would provide Sam the
source of funds with less return. When the shareholders will invest in the company, then they
would also be responsible for the loss and the profit of the company. Moreover, the limited

liability would save Sam from paying extra from his personal assessts in case of any loss to the
business in the market. The company would also enable Sam to purchase large amount of raw
material which when purchased in bulk would help the business to reduce the cost of the product
that is being manufactured in the factory. There would be less risk to Sam in case of limited
liability company with the scope for growth and development in the market place. Moreover,
more capitalist are being draw in to this kind of business due to its reliable in nature,it would
assist in forming the capital for the business. This also give minimum personal liabilities that can
really aid Sam(Senevirathne, 2019).
CONCLUSION
This could be conclude from the report that the general social control of concern
organization is necessary hence it purpose effectually. The concern law regulate the dealings and
behaviour of a business. Business concern run with objective of gaining profits in the long run.
Moreover, the business organisations alter in its type and size and proprietor choose its type
reported to its will. Sam is suggested to opt for Limited Liability Company for enlargement of
his concern. Further more, it could help in carry off his private and professed life with simplicity
while also acquiring higher funds which would aid in increasing the business in the market place.

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.
Alanazi, T.M. and Hassan, H.S., 2018. Roles of Islamic Business Ethics in the Formation of
Internal Organisational Culture: A Qualitative Approach of Muslims’ SMEs in the
UK. International Journal of Economics, Business and Management Studies, 5(1),
pp.16-30.
Alqatan, D., Chbib, I. and Hussainey, K., 2019. How does board structure impact on firm
performance in the UK?. Corporate Board: Role, Duties & Composition, 15(2).
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.
Grail, J.,et.al , 2020. Business improvement districts in the UK: A review and synthesis. Journal
of Place Management and Development.
Hardman, J., 2022. The Plight of the UK Private Company Minority Shareholder. European
Business Law Review, 33(1).
Senevirathne, S.A.G., 2019. Quazi-juristic Personality of Sole Proprietorships and Partnerships
in Sri Lanka and its Causes and Consequences.