The Structure of Business: Legal Statuses, Sectors, and Finance Sources

This report covers the various legal statuses of businesses, including limited companies, public limited companies, and registered charities, as well as their strengths and weaknesses. It also discusses the three sectors of the UK economy and their differences, and evaluates three sources of finance for business startups. The report provides insights into the importance of HR policies in the modern workplace. Course code and college/university are not mentioned.

THE STRUCTURE
OF BUSINESS

Contents
INTRODUCTION:..........................................................................................................................3
TASK 1:...........................................................................................................................................3
1.1 Construct a table to show the various legal statuses of businesses that the business
may adopt. Identify the relative strengths and weaknesses of these legal statuses.............3
1.2 Considering the business idea, identify and evaluate the strengths and weaknesses of
three sources of finance available to any business start-up..................................................6
TASK 2:...........................................................................................................................................8
Identify three sectors within the UK economy in which a business can be operated. What
are the differences between the three sectors?.......................................................................8
Task 3:............................................................................................................................................10
Identify at least two HR policies and comment on their importance to the modern
workplace.................................................................................................................................10
CONCLUSION:.............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION:
Business environment can be defined as an environment that comprises all the internal as well as
the external factors that can affect a company and its operating activities. The internal factors
include the stakeholders, managers, employees and all the members who can affect the business
from internally and directly. External factors include customers, suppliers, government and all
the members which affect the business indirectly (Adeosun and Shittu, 2021). The main
components of business environment can be the economical;, social, political, legal, and
technological environment which helps any business to run their business smoothly as well as
can affect the company in many ways also. In this report of structure of business environment
however, the various business sectors which contribute in the economy have been covered with
the strengths and weaknesses of various legal frameworks which are helpful in the start-ups. In
addition to that the HR policies and their importance in any organisation have also been covered.
TASK 1:
1.1 Construct a table to show the various legal statuses of businesses that the business may
adopt. Identify the relative strengths and weaknesses of these legal statuses.
A legal status of a company can be defined as the any organisation having its sole identity which
is different from its members. An organisation however, can own any property or land on its own
name and can sue or can be sued in the eyes of law but can also enjoy succession at the same
time. Some of the various legal statues of an organisation or any new start-up may adopt are
below:
LIMITED COMPANY: PUBLIC LIMITED COMPANY REGISTERED CHARITY:
LTD can be defined as an abbreviation
used in the company and refers to the
word ‘limited’. It is a corporate structure
which is available in the countries
including UK. This acts as a suffix which
is then followed by the company’s name
Public limited company or PLC can be defined as
the legal status of an organisation or it act as an
designation for the LLC or the limited liability
companies majorly which basically has limited
shares and liabilities in the market. Private limited
company basically separates the shareholders and
Registered charity is also considered as a
form of legal status that basically give away
the charity of its personal legal personality,
which in other words means that the
company can own a property and can also
sign any contracts for the charity. The

giving the idea about that particular
company that it is a private limited
company. Limited company however can
be also defined as the members are
enjoying the limited liability to the capital
they initially invested in the company. So
as if the company comes in the situation
of insolvent, the shareholder’s personal
assets are not at risk for repaying the
liability. In LTD, after adding this to the
company’s name, it becomes a separate
identity, or separate from the owners of it
and act as a sole identity.
STRENGTHS OF LIMITED
COMPANY:
As there is no limit of the number of
stakeholders and shareholders, it becomes
easy to divide the liability into many
people and then the share which one is
liable if the company faces any loss
becomes very less. This however is one
of the main strength if any company
chooses the limited company legal status.
By becoming a limited company, the cost
of production of goods and services also
the directors of the company legally (Baker and et.
Al., 2021). The use of any legal status is mandatory
for every organisation which also helps them to
communicate with the company which is a
publically traded corporation or with other investors
which are interested in investing in the company.
The working of the legal status including the PLC is
that they basically designate any company which
has its shares of stock in the public. As it works for
the limited liability company, the liability of the
buyers of those shares is limited which means they
are not responsible for any loss in the company or
the excess amount which they have paid at the times
of share purchasing. In UK, according to the
company law, a company must have a share capital
of 50,000 Euros to have the PLC designation to
their company’s name. Other major key
requirements to have PLC designation in UK is that
the company should offer shares, appoint directors,
and come up with the registration requirements and
the use of public limited company in the end of the
company’s name is also a must.
STRENGHTHS OF PUBLIC LIMITED
COMPANY:
One of the main strength of PLC for any
organisation is that it helps raise the chance to
increase the capital by issuing more number of
public shares. As through this, the company is listed
on the Public Stock Exchange and attracts many
people’s attention and many rich investors which
then became ready to invest in the company. This in
end results in the increase in the capital and
investment compared to a private limited company
can have.
trustees however, are being protected to have
unlimited liability that means their personal
assets are not liable at the time of solvency.
Charitable companies are limited by
guarantee that means they are the members
of the organisation do not have the right to
share whatever amount of profit which has
been generated as that is only for the purpose
of charity and the operating activities which
are being performed in the organisation.
According to the company’s law in UK,
these are under the charity commission
which is being regulated by the company’s
house (Borgholthaus and et. Al, 2021).
STRENGHTHS OF REGISTERED
CHARITY:
Main strength is that the charity
organisations generally do not pay the
income taxes, stamp taxes or the capital gain
taxes as they work for the welfare of the
society and not for the profit maximisations.

becomes very low and companies
however enjoy greater profit margins
(Cha and Dong, 2021). These companies
also enjoy the easy loan process from
various financial institutions for its
operating activities and expansion of the
business.
WEAKNESSES OF LIMITED
COMPANY:
The capital raise becomes very limited as
the shares are only being sold privately
instead of publically. Also, the vote of all
the members is required to sell the shares
to an individual who is outside of the
organisation. In limited company, the
members have a limited liability towards
the company but the director or owner
have unlimited liability that means his
personal assets are at huge risk if the
company becomes insolvent or faces loss.
WEAKNESSES OF PUBLIC LIMITED
COMPANY:
There are more regulatory requirements when it
comes to PLC. More rules and regulations are there
for the company to follow to give loans to directors.
In addition to this, higher level of transiency is also
required and the accounts are frequently thoroughly
analysed and come in more media commentary.
There is also a problem of short-termism and high
risk of initial financial commitment.
WEAKNESSES OF REGISTERED
CHARITY:
They have to follow the rules and regulation
as they function under the company’s house
and have a limited guarantee with only two
regulators.
1.2 Considering the business idea, identify and evaluate the strengths and weaknesses of
three sources of finance available to any business start-up.
 PERSONAL INVESTMENT OR SAVINGS: To start any business, to start with own
personal cash or any asset would be a very good start. Saving basically refers to all the
assets which they have with them after all the spending on the consumption which is a net
surplus of funds of an individual or a household (Kanchoochat and et. Al., 202). This not

only helps to make believe to the investors or any financial institution that you are willing
to commit to your own project but also you have been planning for such long time.
Strengths: one would always know how much exact money has been used to run the
business. And also, there would be more control over the business and also full
ownership as only personal assets are being used.
Weakness: liquidity of your assets and the cash will decrease when personal saving are
being used, and the surety of profit in future is not necessary.
 BANK LOANS: these are the most common type of investment in the market as many of
the people don’t have much savings that can be actually invested to start the business.
Then the financial institutions come in between which help people by giving them loans
for different purposes. They in return require some kind of mortgage and will take
interests on the loans as well. Start-up loans require personal guarantee.
Strengths: the main advantage of bank loan is that one will get instant availability of
cash or assets to start the business. There is also a flexibility of the money that is one are
not bounded to use the money for that particular purpose however it is advisable to do so.
In addition to this one does not have to quit the equity in order to get the loan which
maintains the control.
Weakness: the process to have bank loans is pretty complicated as bank also follow
some rules and regulations and can’t give loans to anybody (Moroz and Gamble, E.N.,
2021). They see if the company is proved to be profitable in the future or the person is
eligible to pay back the loan with the interest amount as well. The interest rates are also
very high for normal people and regardless of the profit; one should give some kind of
collateral as backup.
 CROWD FUNDING: as from the name it can be concluded that it refers to an
investment where the money is being collected by the general public or the crowd itself.
Businessman generally go for this option as when the good or services they are producing
is majorly dependent on the general public or customers.

Strength: as for the marketing purpose, pitching the company’s pitch to the public at the
time of crowd funding will be very helpful for the firm.
Weakness: the risk of failed projects and then the damaged reputation in the society as
the money invested is by the people only can be very damageable for the firm.
TASK 2:
Identify three sectors within the UK economy in which a business can be operated. What
are the differences between the three sectors?
The economics subject can be divided into three main sectors of activity which consists of
primary sector, secondary sector, and the service sector. This model was first developed by Allan
Fisher, Jean Fourastie and Colin Clark. Primary sector basically with the extraction of raw
materials for example mining, agriculture and fishing which is then go through a process of
production of finished goods example manufacturing, construction sector and many more in
secondary sector and finally to the tertiary sector in which goods and services are being
exchanged with the ultimate user, tertiary sector is basically concerned with providing all the
intangible goods and services to the final user this also retails banking, IT services, tourism and
many more .
In context with UK, it becomes the sixth largest economy in the world with the GDP of 2.83
trillion Euros. The service sector of UK which includes majorly of finance, retailing, and
entertainment, give more than three quarter to the GDP by which it can be clearly be concluded
that service sector contributes largest in UK (Norese and et. al., 2021).
THREE SECTORS OF ECONOMY AND DIFFERENCES BETWEEN THEM:
PRIMARY SECTOR SECONDARY SECTOR TERTIARY SECTOR

 This sector is basically known
for the agriculture field and
the extraction for all the raw
materials which are being
used for the next stage of
production
 In primary sector, it is much
unorganised and uses very
traditional methods for the
operating activities that
happen in this sector.
 The operating activities of this
sector consist of things like
mining, agriculture, forestry
and extraction of raw
materials.
 In mostly developing
countries, this sector is
engaged with a more number
of workforces than any other
sector. This maybe because
this is the only sectors which
does not requires as much
technical and skill work than
 This sector is also called the
manufacturing sector in which
the production of goods and
services are being done with
the help of raw materials that
was extracted in the primary
sector.
 The secondary sector is
however more organised
when compared to the
primary one and uses
advanced and modern
technology for the production
of goods and services.
 This sector does activities
which include the task of
manufacturing, small and
large scale units for
productions and multinational
corporations.
 The workforce of this sector
is moderate or in other words
is in equilibrium. As this
sector requires some skill sets
and qualities to do the task,
the companies only find
people with the exact skill set
 This is called the service
sector as it basically provides
all kinds of services to the
final user for both primary
and secondary sector.
 This sector is considered to be
the most organised one and
uses the Logistics techniques
for its operating activities.
 This sector includes activities
related to the service
providing of both the sectors
and the activities are like
banking, insurance, trade and
communications and many
more.
 The employment rate of these
sectors is low in developing
countries. However, in
developed countries, the rate
has increased continuously
from the year 2003 as more
and more people were
employed in this sector. And

any other sector and at the
same time this is the most
important sector of the
economy by which all the
other sectors work, hence it
has given more importance in
many countries.
that is needed for the task in
the company which makes it
easy for both the company
and the worker to do the task.
in UK, this sector consists of
about three- quarter of the
total GDP (Randhawa and et.
Al., 2021).
Task 3:
Identify at least two HR policies and comment on their importance to the modern
workplace.
HEALTH AND SAFETY POLICY:
It is the policy which describes a course of action that has been chosen to influence workplace
decision making and guide actions related to workplace healthy and safe. This commonly exists
as a body of regulations that are defined at the level of government and are implemented by
individual workplaces. In some jurisdictions, public intermediary corporations may also be used
to develop policies. It is the policy which can be promulgated at the governmental national, sub-
national, and local levels through public oversight corporations and within the workplace.
Regulations by organisations from OSHA and other national occupational health and safety
organizations oblige employers to enact an array of safety policies (SECCASPINA, 2021). As
regulations are frequently industry-specific, the extensiveness of the employer's policymaking
obligations depends on a specific industry to which the employer belongs. Workplace also
creates safety policies to satisfy their general duty to provide a safe workplace rather than
practice ad-hoc enforcement of safety measures.
IMPORTANCE
 It is morally right to ensure your workers return home safe and healthy at the end of
every working day.
 By protecting the employees, it reduces absences, ensuring the workplace is more
efficient and productive.

 Research shows that workers are more productive in workplaces that are committed to
health and safety.
 Reducing down-time caused by illness and accident means less disruption – and saves
your business money.
 In some countries, health and safety legislation is criminal law and then it is legally
obliged to comply with it. Legal breaches can result in prosecution fines and even
imprisonment of senior executives.
 To attract investors and partnerships you may need to demonstrate your commitment to
sustainability and corporate social responsibility, which will include how you protect
your workers (Vlahovic and et. Al., 2021).
 Good health and safety at work secures long-term benefits and makes the business spread
in the wider community.
EQUALITY AND DIVERSITY POLICY
This policy is a simply written document for the group about how to avoid the discrimination
against people, and how it will create a safe and inclusive atmosphere for the members and
service users. It will also help to know how to manage a situation in which someone has been
treated unfairly or disrespectfully within the group (Vrontis and et. Al., 2021). It is important to
consider equality and diversity because some individuals, groups and communities are more
likely to face discrimination, harassment and exclusion in society. Community groups can ignore
or discriminate against particular limited group without any intension, without realising what is
happening around. The policy does not need to be long and fancy , the most important things are
that there should have a thought about what has been put in it and how have the reports been
made for the respective actions in the organization.
IMPORTANCE
 It helps to develop.
 Changing the face of businesses.
 Helps to reach more customers.
 Attract the employees.

 It will be easy to recruit new employees with the top talents as company will be open to
all the people not just few ones.
 Staff members will feel empowered that they've been hired based on their talent and
aptitude
 Business will see an increase in creativity because workers from different backgrounds
will approach problems and projects in different ways.
 Employing people from different cultures may mean that business benefits from diverse
language skills, helping to sell the gods and services internationally and providing
enhanced customer support (Wang and et. Al., 2021).
 Employee turnover cost will be fallen down and will be deducted if people feel
comfortable, valued and happy in a workplace with an ethical culture.
CONCLUSION:
In this respective report of the structure of business, it has been concluded that Business
environment can be defined as an environment that comprises all the internal as well as the
external factors that can affect a company and its operating activities. Later on the various
business sectors in the economy which are the primary sector, the secondary sector and the
tertiary sector has been also included which contribute in the economy along with the difference
between them. Various legal frameworks which are helpful in the start-ups have also been
discussed which are limited company, private limited company and the registered charity has
been discussed along with their weakness and strengths. In addition to that the HR policies and
their importance of them in any organisation have also been covered in this respective report.

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