Business Laws and Legal Consequences of Different Business Structures in UK

Business laws

Table of Contents
INTRODUCTION .............................................................................................................................3
Different business structure in UK................................................................................................3
Legal consequences of business structure in UK..........................................................................5
Recommendation for the IOM solution ........................................................................................7
...........................................................................................................................................................8
CONCLUSION .................................................................................................................................8
REFERENCES...................................................................................................................................9

INTRODUCTION
Business organization defined as structure of enterprise and how this structure would be
useful and helpful in meeting business organization goals. Before starting any business venture,
most essential thing is to decide type of the business construction for that business as future of a
business depends upon type of the structure adopted. The chosen business structure would impact
legal liabilities, cost and taxation of the business. All the business structure has their own benefits
and limitations (Jackson and et. al., 2020).Hence, it is important to understand various type of the
business structure before choosing one for a business venture. In this report, Sam has been
operating a business named IOM solution of the selling galvanising parts to local garages of the
UK for last eight years. Now he planned to expand his business. Therefore, Sam is looking for
an effective and appropriate business structure. This report will be based for different kind of
business structure and their legal consequences.
Different business structure in UK
The business structure is considered as judicial structure for any business organisation that
is recognised in the given jurisdiction. Business structure chosen by the organisation influence the
daily operation of a business. In United Kingdom, there are four types of the business structure
that consisting of contrasting sets of legal implication and taxation. These form of the business
organization are mentioned below:
 Sole proprietorship- It is simplest form of the business structure in which single
individual is accountable for daily business operation activities. There is no condition to
file any separate income levy form until it is a detached legal entity. It is most ordinary
business structure which is very simple to set up (Kim, and et. al., 2018). If an individual
plan to work alone, might be right structure for him. In this, owner is personally liable for
all the business financial obligation influencing losses and debt. With this structure owner
has full control over the business and there no requirement to fill any form and pay
government fees. As an added benefit , individual can use the business losses to balance
out the income they otherwise earned, that can lead to higher tax return . In this, the sole
proprietorship do not need to filling the annual report with federal and state government.