Types of Business Organisation and Legal Consequences for IOM Solutions

This report discusses the different types of business organisations available to IOM Solutions for reorganising, the legal consequences of each business entity, and recommendations for selecting the appropriate business structure. The report covers sole trader, partnership, limited liability, and cooperation. It also explains the legal formalities and government intervention required for each type of business entity. The report concludes that partnership is the best option for IOM Solutions.

Business Law

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Explanation of different types of business organisation available to IOM solution for
reorganising................................................................................................................................3
Legal consequences of each business entity.............................................................................5
Recommendation for IOM electronics for selecting appropriate business..........................6
CONCLUSION................................................................................................................................7

INTRODUCTION
Business law is a body of law that governs organisations and commerce’s and it is frequently
regarded as a component of civil law that deals with both private and public law issues. It
governs commercial recruiting methods, corporate contracts, consumer products sales as well as
manufacturing process of the companies. Different sorts of businesses use commercial laws in
their operations(QC, 2022). The research of IOM Limited, which sells various electrical parts to
several local garages, is included in this project report. This company is handled by Sam, who is
a sole trader who has been in business for eight years. This firm has been growing in the market
for the past two years and Sam is finding it difficult to run his business under pressure. The
following report is going to cover the various types of business organisation forms which can be
opt by the management of the IOM solution in order to reorganised their firm. This reports also
focus on the legal consequences associated with the various organizations and in the end this
reports give recommendation to the organisation to get the suitable organisational structure.
MAIN BODY
Explanation of different types of business organisation available to IOM solution for
reorganising.
Since the last two years, the market for IOM solutions has grown, putting greater pressure on
Sam, who is a sole trader. In order to match the market's need and expansion Companies are
required to choose from a variety of market-based choices for managing and expanding their
businesses. In an era of fierce rivalry among businesses, it is critical to concentrate on selecting
the most appropriate sort of organisation(Davidson and Forsythe, 2020). It is critical to choose the
ideal type of business approach in order to boost a company's efficiency and performance. All
big organisations in the worldwide and domestic markets should concentrate on building a key
strategy for picking the most appropriate form of business. This would assist Sam in reducing
work pressure and allowing them to expand their workforce in order to fulfil market demand.
The following are some of the possibilities available to the IOM solution has been discussed
below: -
 Sole trader: -It is a type of business in which a single person can run and own a firm for
a variety of purposes. In this case, the operation of the company is contingent on the

discretion of the proprietor, and there is no business in the lack of the owner. There is no
legal business name other than the owner's name that is appropriate for a single-owner
company. Small businesses can use it because it has a cheap startup cost. As it is a
personal source of income, the revenue generated by the owner is taxed only once. Sam
has implemented this business model for their IOM solution. It permits them to keep all
of the profits from the firm and there is less regulation in this industry. It gives the owner
the sufficient flexibility to operate the business.
 Partnership: -It's a different type of corporate structure based on a legal agreement
between two or more persons who run a company together. It can be formed by two or
more people as well as a company. There is a clear statement of power, obligations, and
profit in business. In this all the partners share obligations and rewards, and the partners
chosen have an impact on the company's operations(Bagley and et. al., 2020). General
partnerships and limited partnerships are the two most common types of partnerships. A
general partnership is one in which all partners are jointly and severally accountable for
the company's possible losses, debts, and obligations. A limited partnership, on the other
hand, is one in which some participants are only allowed to invest and have no
obligation. There are two categories of partners in a limited partnership: general partners
and limited partners. Sam can use this business structure for IOM solutions since it
allows them to take use of greater finances and share the responsibility. As a result of the
increasing business growth, it assists Sam in reducing their job load.
 Limited liability: -It is a type of business in which the proprietor has limited liability as
well as a financial benefit. It offers a number of advantages to business owners, including
the opportunity to minimise their liability for losses and debt, as well as the ability to
share profits without double taxation. It separates the owner from the company's
obligation and can be taxed as a corporation. Sam, a sole trader at IOM solution, can use
this business structure since it allows him to separate his personal identity from his
business. It will assist them in effectively managing their business while also lowering
their liability. It enables businesses to attract additional partners who may share work
responsibilities, reducing work load and allowing them to expand successfully in the
market. It also enables the company to obtain additional finances and resources.

 Cooperation: -This can be considered as a separate entity as well as a legal person
because it assists them in making a profit. It is a corporate structure in which a
corporation develops its operations independently of its owners' personal responsibilities.
In this case, corporations have various rights and responsibilities that individuals can
enjoy, such as owning assets, paying taxes, and hiring staff. It is a business that is
governed by state law, which imposes a broad framework as well as taxation on both
business and personal income(Keay and et. al., 2020)(Armour and Sako, 2020). It is a type of
business that Sam can use for the IOM solution since it helps to restrict the owner's
liabilities. The profit and loss of a firm can be attributed to cooperation in this case. This
makes it simple to transfer the firm to a new owner, and the owner's personal assets are
not held liable for the business's debts.
Legal consequences of each business entity
There are different types of legal business structure and all these business organisations
comprises of various types of laws and dimensions(Segrestin, Hatchuel and Levillain, 2021). It is
very important for the management of the business organisation to identify all the legal
consequences in order to commence a business. Basically, there are two types of business
organisation in the UK i.e., incorporated and unincorporated. In the business entity where the
interference of the government is less it is known as unincorporated entities. Although they have
to follow the legal formalities in order to established and also responsible for following the rules
and regulations which are made by the government of the nation to lead the competitive market.
Sole proprietorship and partnership are the most common enterprises which came under this
category. Less legal formalities as well as the easy formation are the most effective components
which comprises in this that assist in the formation of legal structure. Along with this, within the
unincorporated business the private as well as the public organisation are covered.
 Private organisation: -These organizations comprise of Private Limited, whose shares
are not publicly available. Private organizations also require minimal or negligible
government intervention to grow effective leads. The organization is self-managed by
various directors and bonds are an important source of funding. Nowadays, focus has
been paid by the various types of individuals on the development of the private entity to
do diverse kinds of legal functions(de Fontenay, 2018).

 Public organisation: -A public company is that organisation which has a public limited
company in front of its name. Recently, a public institution has been formed and its
shares have been sold to the public. There are numerous public organisations within the
UK that are fully operated by the government. To establish a public limited company, the
company must have at least two directors. Documents required to establish a public
limited company comprises of Memorandum of Association, Article of Association and
the owner's digital signature. The Business management of public institutions is very
complicated and includes extra functions than public institutions. Funds are provided to
public institutions by many agencies such as government agencies, consolidated funds
and public taxes. Public firms is being considered to be the major organizations that
contribute in the development of rate of employment opportunities, GDP of the nation
and national income.
 Sole Trader: -A sole proprietorship may be defined as that business entity which is
owned by a single person. In these business enterprises the involvement as well as the
interferences of government and the legal formalities is very less(Juraevich,
Mardonakulovich and Ibroximovich, 2021). For sole proprietors, all lawful and moral duty for
doing business rests with a single owner. The major responsibilities of a sole proprietor
are to register for a business using an INHRC number. In this, the funds are arranged by a
person's family and friends. The owner of the company has to focus on the key tasks and
to paid attention on the key restrictions of the development of legal structure and
approach in a corporate organization. Large organization in the market is focused on
developing flexible legal structures to legally facilitate all major operations. An important
role for a company is to build a comprehensive approach that helps in increasing the
participation of workers. The sole proprietorship is considered an important form of
business that also helps improve economic power.
 Partnership: -Since in partnership a partnership agreement is needed between two or
more people that is the reason that the legal process of the partnership is more as
compared to the sole trader’s firm. In the expansion of a company, the legal form plays a
vital role in determining the great benefits for the well-being and growth of the company.
The legal rights of partners in this type of company also include important legal
proceedings related to the development of the company(Bellace and Ter Haar, 2019).

Recommendation for IOM electronics for selecting appropriate business
It is suggested for IOM solutions to choose partnership as a primary manner of doing the
commercial enterprise. The IOM electronics have to select partnership as its option because this
is being considered as the best manners of doing the commercial enterprise. In the partnership
there may be a sharing technique which helps in removing danger related to operations. Many
global and domestic organizations in the market recognition on doing commercial enterprise as
in keeping with partnership deed to share the profit and losses. The respective company have to
carry out actions primarily based totally on partnership in an effort to increase efficiency in key
functions. IOM can think about partnership as a manner of doing commercial enterprise in an
effort to follow legal guidelines and protocols. The threat free improvement is being considered
as one of the main functions of a commercial enterprise along with the various danger
minimisation techniques. The different organizations withinside the market has to recognise their
growth, strengths and competencies by following the legal and moral approaches.
CONCLUSION
From above report, it has been concluded that enterprise legal guidelines are critical for
enterprise because it set a restriction for enterprise. There are various kind of legal guidelines in
various nations that is to be observed and follow by the enterprise. There are various forms of
enterprise that an enterprise may be undertake as according to their condition and situations. This
administration encompasses sole trader, partnership, cooperation, limited legal responsibility and
others. All those enterprises have pros and cons. There are various styles of legal guidelines and
rules for enterprise that is to be observed with the aid of using them as a way to keep away from
interference of criminal authority.

REFERENCES
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