Business Law and Legal Business Structures in the UK

This report discusses the legal business structures in the UK, including sole traders, general partnerships, partnerships, and limited liability. It also provides recommendations for expanding a business and highlights the advantages and disadvantages of each structure. The report is relevant for those studying business law or looking to expand their business in the UK.

BUSINESS LAW

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
Business and organisation in the UK...........................................................................................2
The legal business structure of UK..............................................................................................3
Sole trader..........................................................................................................................3
General partnership............................................................................................................4
Partnership.........................................................................................................................4
Limited liability.................................................................................................................5
Recommendation.........................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
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INTRODUCTION
Business Law can be defined as the different aspects of legal rules and regulations that need
to be complied with specifically amongst the businesses in corporate world (Mayer, 2018). This
report will evaluate different business structures that can be adopted in order to conduct business
and the legal requisitions pertaining to them. Advantages and disadvantages will also be
discussed here in this report. Lastly, the most favourable form of business structure would be
recommended to IOM Solutions for their expansion along with the reason behind the chosen
form of business expansion.
MAIN BODY
Business and organisation in the UK
IOM solution is the commercial administration which is managed by the Sam as a sole trader.
The organisation delivers electronic part to local buyer and the suppliers with the motive of
obtaining revenue from the marketplace. The solitary dealer of the establishment managing the
organisation successfully with the all survival elements (Potter, D. and Heckman, 2018). Now
the specific person considered as the owner of the firm determine that the gross profit margin of
association in the marketplace is increasing rapidly so the company have possibility to expend in
dissimilar market section to obtain the turnover and boost the productivity of the corporation.
The organisation implements the employment law in order to provide proper capability as well as
protection to the workers of the company. In context to deliver appropriate gratification to the
potential customer the corporation also follow the customer law which is considered for the
fortification of the customers. The establishment continuously pay attention of its customers in
apposite style for that the business serve the finest electrical excellence product to the buyer.
From the analysation of the income of the establishment the owner of the organisation aims to
expend the market and enhance the value of the brand among the people as well in the
marketplace which also increase competition in the marketplace. Due to the matter of vicarious
liability in which the employees are not using the machinery in appropriate style which create
mismanagement. It is hard to operate the business individually as it includes lots of functioning
in the process of management (Clarkson and Miller, 2020). The sole trader Sam is being
responsible as that individual person is liable for the assets as well as liability of the organisation.
The company accomplished all the documented work and follow all the lawful system lies for
the corporation. Moreover, the business enterprises prepared the document at the period of
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registration procedure with all the essential details of the organization. The administration
enrolled the memorandum of association very judiciously for wellbeing of the company. This
credential is mandatory for the government as it include the possibilities and operation of the
organisation. The MOA contain of the strength and objective of the administration alongside that
the AOA includes all rules and regulation of the corporation which supposed to implement by
every member working with the institution. The MOA has all the evidence associated with the
organisation for instance, designation of the organization, purpose and objective of the
corporation, investment as well as accountability section (Kubasek, et.al 2019).
The legal business structure of UK
Sole trader
Sole trader is the business personality who believes in the self-employment as well as own and
manage the business individually without any interference of the other party in operating the
business organisation. the sole trader is the only responsible person for operating business in
effective as well as efficient manner (Braunholtz-speight, et.al 2018). in this element of business
legal structure, the individual person collects all the profit of the organization alone also liable to
pay the taxes unaccompanied. The person supposed to pay all the taxes impose by the
government as per the business entity. Through the authority of nation allow personnel
allowance to the individual person who is operating the organisation without any assistance of
some other personality. The individual person has the opportunity to grow the business
individually in order to enhance the performance, profitability and productivity. the organisation
works in legal system as it is compulsory to implement employees law as well as consumer law.
For increasing the scale of the growth, it is essential to provide safety to the employees as well as
protection from any kind of scams or issues to the consumer while making purchase of
company’s product or services. But the owner of the organisation cannot save the personal assets
as well as accountable for the sales, expenditure and liability of the organisation. under the sole
trader legal structure, the organization required less document work to operate the business
(Cribb, miller, And pope,2019). The legal authority of the country provide permission to the
operational firm to introduce product and services in the marketplace. apart from the pros it also
has cons which is the sole trader have less opportunity to acquire the financial support from the
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banks or other finance company. The leading firm need to pay self-assessment tax once in a year.
Along with that the person need to face the forthcoming challenges it can be liability too.
General partnership
the general partnership refers to the togetherness of the two or more than two people who come
together the motive of operating the enterprise and generate profit cooperatively. The person who
involves in the business provide assistance to the third person in managing the business
successfully (Gerner-beuerle and schillig, 2019). The business partners have right to operate and
take the action of the behalf of the enterprises. The partners face the unlimited liability when the
business have any sort of debt or the obligation. Most of the business enterprise utilized this form
of business legal system as it is easy to manage and provides effective as well efficient result to
the enterprises. The advantage of using this method for management of the organisation is
responsibility of the institution is bifurcated between the partners it means the individual person
do not bear the loss individually. The legal system provides the relaxation to the partners of the
organisation as they are not supposed to pay the taxes separately. It will bring flexibility within
the organisation as every person have dissimilar mind-set which deliver the positivity in the
company. Along with that all partner bring different skills and knowledge for managing the
enterprise. On the other hand, the general partnership consists of disadvantage too that the
government do not provide separate entity to partners or organisation. along with that the
partners are responsible for each other’s decision or the action. In the forthcoming time period,
the business partner need to pay large number of propositions as the penalty for being separated
from the organisation (Tantra, 2019). The partner’s assets will be bounded for the bankruptcy if
any liability occur in the business enterprises.
Partnership
The partnership refers to the formal arrangement in which the dual or more than two people
decide to operate the business with each other will all legal formalities. For that the partners also
sign partnership deed as the documentation of the agreement which include the ratio and share
every partner is bringing as the capital for the investment. The partners share the responsibility as
well as liability with each other as the decided ration between the partners. The operational
person takes the decision jointly for the welfare of the organisation which further help in
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enhancing the productivity and profitability (Mayer 2018). In this form of business, the partners
form alliance with each other to pay attention on the business and expend it in domestic as well
as international market. the advantage of utilizing partnership is that under the tax policy the
partners a quire special benefit from the legal system and they do not have excessive liability.
The managing people of the company are personally liable for the profit and loss of the
institution. All the financial institute or the company provide financial support as well as allow
them to invest or utilize capital for the welfare of the enterprises. Therefore, the banks provide
loans to partners of the company as they have security of another partner. To the owner of the
organisation become easy to operate the accountancy of the company as the third person provide
assistance in accountability. It delivers limited restriction on the employees at workplace. On the
other side it has limitation for instance the partners to not have independency or independent
right over the business. Most of the time the partners come into conflict discussion because of
that the worker involved into controversy too (Sarah, And vida 2020). Furthermore, it creates
confusion in the minds of the labour that whom the individual person is answerable.
Limited liability
It is the element of business legal structure of UK in which the partners of the organisation have
limited liability in the marketplace. in the limited liability if the partnership proved as the
insolvent then the creditor cannot acquire the personal assets of the partners as per the rules and
regulation of the business law (Moll, 2020). The partners of the organisation divide the risk
factors and limitation or the liability of the company as per the individuals share in the operation
of the company. The double taxation process is avoidable by the partners of the organisation as
they operating the business with same entity. The one person only pays the taxes of their own
rather than paying the taxes of the other person. Before entering in the limited liability
partnership, the partners decide the role and responsibility as well as capital for the enterprise.
Every member of the organisation work with all the duties which are allotted and decided in the
documentation. The organisation has advantage to acquire the creativity in the marketplace as the
different partner have different source of information and idea to operate the business unit in
effective as well as efficient manner. the limitation of the limited liability partnership is that if
the tax return is not fill on the time then the organisation supposed to answer the law and face the
penalty which increase the brand value in the marketplace.
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Recommendation
Sam the owner of the IOM solution need to indulge in the business legal structure of the UK in
order to lead the market as well as expend the business in the marketplace (Rodrigues, 2018). for
the better management of the company the individual person need to go for the partnership in
which he can involve third party for the better operation and function of the company. It will
make easy to pay taxes on time because in the partnership the individual person is not only liable
to pay taxes as well as acquire the shares of the company. Furthermore, the Sam acquire the
opportunity to decrease the stress of the employability as the responsibility is bifurcated into
partners. Moreover, through the partnership method the organization is able to decrease the
expenses as this process is easy to operate and less costly but more effective in the marketplace.
with the assistance of partnership method, the member enhances innovation and creation in the
company as the individual person bring different skills, ideas and knowledge. The organisation
should keep the information confidential as the competition is increasing in the marketplace day
by day. The company should make concern on the employability as well as on the consumers
which satisfy the consumer and the employees for the betterment of the organization.
CONCLUSION
From the above report it will be concluded that the in order to increase the scale of the
production and the productivity the organisation need to follow all the rules and regulation which
is imposed by the government(Rye,2020). The present report highlighted the business legal
system of UK which the company can considered for the expansion of the business in the
marketplace. The study reflected that owner of the company proceed the business with the
utilization of partnership for expending the business in the marketplace. Furthermore, the report
represented the recommended point which the company can utilized or considered as the welfare
of the organisation.
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REFERENCES
Books and Journal
Braunholtz-speight, et.al 2018. The evolution of community energy in the uk.
Clarkson, K.W. and Miller, R.L., 2020. Business law: Text and cases. Cengage Learning.
Cribb, j., miller, h. And pope, t., 2019. Who are business owners and what are they doing? (no.
R158). Ifs report.
Gerner-beuerle, c. And schillig, m.a., 2019. Comparative company law. Oxford university press.
Kubasek, et.al 2019. Dynamic business law: The essentials (pp. 28-50). McGraw-Hill Education.
Mayer, c., 2018. Prosperity: better business makes the greater good. Oxford university press.
Moll, d.k., 2020. Contracting out of a partnership. Transactions: tenn. J. Bus. L., 22, p.239.
Potter, D. and Heckman, S.J., 2018. Business Entity Selection: A Human Capital
Approach. Journal of Financial Planning, 31(4).
Rodrigues, u.r., 2018. Law and the blockchain. Iowa l. Rev., 104, p.679.
Rye, j., 2020. What is the difference between a sole trader and a limited company?. In setting up
and running a therapy business (pp. 132-134). Routledge.
Sarah, r. And vida, a., 2020. Business law. Pearson.
Tantra, r., 2019. Self-employment. In a survival guide for research scientists (pp. 215-224).
Springer, cham.
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