Structure of Business

This assignment assesses several legal statuses of businesses that startup might adopt, evaluates the weaknesses and strengths of finance sources available for the start-up business, evaluates primary, secondary, and tertiary sectors within the UK and their value to the economy of the UK, and evaluates HR policies and their importance to the modern workplace.

Running Head: BUSINESS
Structure of Business
[Name of Student]
[Name of Instructor]

Table of Contents
Introduction.................................................................................................................................................3
1. Business Legal Structure and Finance Sources....................................................................................3
1.1. Businesses legal Structure...........................................................................................................3
1.1.1. Advantages and disadvantages of Sole traders..........................................................................5
1.1.2. Advantages and disadvantages of Ltd........................................................................................5
1.1.3. Advantage and disadvantages of Charity business....................................................................6
1.2. Advantages and disadvantages of Sources of finance......................................................................7
1.2.1. Equity.........................................................................................................................................7
1.2.2. Debt...........................................................................................................................................7
1.2.3. Debentures................................................................................................................................8
2. Sectors in the UK economy......................................................................................................................8
2.1. Primary Sector..................................................................................................................................8
2.2. Secondary Sector..............................................................................................................................9
2.3. Tertiary Sector..................................................................................................................................9
2.4. The contribution of sectors in UK economy....................................................................................10
3. HR policies in the UK and their importance to the modern workplace.................................................11
3.1. Health and safety policies...............................................................................................................11
3.2. Diversity and equality policies........................................................................................................12
Conclusion.................................................................................................................................................13

Introduction
The government of the UK has fixed one of the aggressive economic covid-19 pandemic
responses, pledging billions of money to support start-ups and businesses through the crisis. The
government of the UK has pledged approximately 8.5 percent equivalent of GDP for fighting the
pandemic. As an entrepreneur, this assignment assesses several legal statuses of businesses that
startup might adopt. Moreover, it evaluates the weaknesses and strengths of finance sources
available for the start-up business. The second part evaluates primary, secondary, and tertiary
sectors within the UK and their value to the economy of the UK. And lastly, this assignment
evaluates HR policies and their importance to the modern workplace.
1. Business Legal Structure and Finance Sources
1.1. Businesses legal Structure
Sole Trader LTD Charity Business
-This is the simplest way to
run and set up a business
because control and ownership
of the company rest with one
person.
-Becoming a sole trader is
risky inherently because the
person is not separated by the
business and also for the
business unlimited personal
-A private limited firm is a
firm that is arranged to
provide its owners with
limited liability.
-The firm exists in their rights,
which means that the company
finances are separated by their
owner’s finances (Aldous,
2018).
-The company owners each
-A charity company is a
particular voluntary
organisation type and should
conform to the rules fixed in
the law of charity specifically
the “Charities Act 2011”.
- For a company, charity is a
legal status, not an
organisational structure or
legal form.

individual liability, any type
of claim against it, its
contractual obligations and
debts (Aldous, 2018).
-They own all business assets
and could dispose of them off
as their wish, and might trade
under the name of a business
and might employ staff.
-For a sole trader, regulation is
minimal: there is no need for
any formal constitution for a
company, and no requirement
to file or register accounts and
then returns with “Companies
House” (Aldous, 2018).
possess part of the company,
which makes the owner's
company’s shareholders.
-Usually private limited firms
are family concerns.
-This company type is chosen
often when the sole traders
wish to retain or expand
control of a firm.
-Shareholders and directors
run the companies.
-Examples of private limited
firms are Clarks and Virgin.
---The main aim of private
limited companies is to
expand the firm and maximise
profit (Thompson & Zang,
2016).
-No one owned Charities
business (Thompson & Zang,
2016).
-The charity is controlled and
also its assets are held in a
trust by the trustee board.
-In law, trustees are
responsible for ensuring that
the charities are run well to
deliver their purposes for the
benefit of the public as stated
in their constitution
(Thompson & Zang, 2016).

1.1.1. Advantages and disadvantages of Sole traders
The main advantage of this structure is that this legal structure is easy to initiate because
it needs low capital. Sometimes this entity does not require even registration at the beginning
depending upon the location. However, registration is cheaper in contrast with other legal
structures. Moreover, the tax is charged depending upon the similar personal income tax type of
the owner (Formosa, 2018).
The main disadvantages of this legal structure are that the entity security is susceptible to
risk because of poor decisions taken by the proprietor. Moreover, the owner assumes business all
responsibilities including debts that prove sometimes to be tedious. The failure to manage debts
could lead to personal assets disposal for the objectives of debts clearing. One of its
disadvantages is that all the proprietor’s assets face the threat of being disposed of after the death
of its owner. Further, the business is risky facing any lay suit kind, since this might lead to all
assets’ disposal linked to the proprietor. A lot of accountability risks are faced by the proprietor
that calls for several insurance policies’ registration to ensure safety (Reekie, 2020).
1.1.2. Advantages and disadvantages of Ltd
The main advantage of ltd is that the name of the firm is protected. The firm has its legal
existence separate by its members and management. Approved income plots of the company
provide usually better advantages as compared to those companies paid under agreements with
the “self-employed” and also those in the non-pensionable job (Leuciuc & Popescu-Cruceru,
2014).

The disadvantage of Ltd is that on top of existing taxes they have to give Corporation tax.
Another disadvantage is lack of capital because of no share problem to the general population.
Ltd wanted an advantage from scale economies (Leuciuc & Popescu-Cruceru, 2014).
1.1.3. Advantage and disadvantages of Charity business
Generally, charities are exempt from corporation/ income tax (in case of few income
types), gift of charities, stamp duty, or capital gains tax is free usually of inheritance tax. Often
charities can get funds from the public, local government, and grant-making trusts more easily as
compared to non-charitable bodies. Moreover, charities could reclaim gift support from
donations by private individuals. Charities could reclaim gift support on donations by private
individuals. Businesses could claim relief of CT on charitable donations. In some circumstances,
a charity business could get special treatment by VAT. VAT reliefs are marginal and would not
make a difference unless main building work is engaged. A charity pays twenty per cent of
normal rates of business on the buildings that they occupy and use in several situations the local
authority would award, on application, the extra twenty per cent as more relief (Reekie, 2020).
The disadvantage of charity is charity should exclusively have aims; the organisation, in
general, will have to stop above certain threshold any non-charitable activities. Above the
threshold, the non-charitable activities could continue if conducted by a different trading firm
that could gift aid, in turn, any profit it gets to the charity. Trustee of charity firms is not
permitted to get financial advantages from the charity that they control unless this is authorised
specifically by the leading document. No up to fifty per cent of the trustee could be remunerated.
Moreover, financial benefits include business contracts to the own business of trustee, services,
or salaries. In the same way, where a partner, relative, or spouse of a trustee gets such

advantages, this is categorised as remuneration of the trustee. However, trustees are entitled to be
repaid for their out-of-pocket reasonable expenses. There are restrictions to the degree of
campaigning or political activities that a charity could take on. Trustees require avoiding any
situation where personal and charitable interests conflicts. Charity law imposes particular
financial reporting duties; these change with the charity size (Reekie, 2020).
1.2. Advantages and disadvantages of Sources of finance
1.2.1. Equity
The main advantages of this finance type are: there is no burden because no loan is there
to repay; It provides for gaining and learning from owners who are more experienced and
knowledgeable, and there is no credit problem because of previous unworthiness.
The main disadvantages of equity are: there is the probability of conflict arising because of
management styles differences; business’ loss of control because of ownership is shared, and
sharing profits with the investors (Ordish & Hall, 2019).
1.2.2. Debt
The main advantages of this finance type are: planning ease as company’s owner; the net
obligation is reduced by tax advantage; and retain control because the firm belongs to the
investor.
The main disadvantages of debt are: agreeing to collateral might put other companies at
risk; making payments needs discipline in order to avoid defaulting, and a good rating of credit is
needed to get financing (Ordish & Hall, 2019).
1.2.3. Debentures

The main advantages of this finance type are: use of this finance source could encourage
funding that is long term to grow a company; control of the firm by current shareholders is not
decreased and profit-sharing stays in a similar proportion, and valuable financial reassurance and
protection are given for directors concerning their funds.
The main disadvantages of this finance type are the lender by holding the debenture lose
their authority to vote and also take company profit’s share; in securing debentures restrictions
take away the freedom of management to use or control the possessions at will, and no flexibility
in obligation to do interest payments on debentures (Yazdanfar & Öhman, 2015).
2. Sectors in the UK economy
2.1. Primary Sector
The industry’s primary sector is concerned with natural resources or raw material’s
extraction from the land. Moreover, any business, which extracts materials or grows goods from
the land will be categorised as the primary sector business. Its examples are oil production,
fishing, mining or framing. The primary sector that is known commonly as extractive production
is the collection and extraction of natural resources (or raw materials) that includes activities like
quarrying or farming. Because this is sector is time-consuming and costly, machinery is being
used technologically that produces greater yields. Its example is sprayers spraying herbicides,
fungicides, and insecticides and corn being harvested through combine harvesters that result in
worker redundancies (Arent, et al. 2014). Technology is not always used, if technology is not
available, a farmer can plant and then harvest crops to sell all manually. This sector is a main
exporter/ importer, producer, and supplier of construction materials. Moreover, this sector’s
companies’ manufactured materials are a vast range to ensure all demands of infrastructure and

construction industries are fulfilled. The cementitious materials supplied and produced by these
firms include precast concrete products, ready-mix concretes, asphalt, and aggregates. Also, they
provide road surfacing at the national level among other services. These companies employ
around four thousand workers and work up to sixty quarries in the United Kingdom and also has
up to three hundred and thirty sites in Scandinavia and mainland Europe. The traditional
techniques are used by this sector and mostly it is unorganised (Aaron, 2021).
2.2. Secondary Sector
The industry’s secondary sector is all about manufacturing. This will involve taking the
resources from the primary sector and then changing them into new and different products. The
secondary sector examples include building companies, food production or car manufacturers.
The secondary sector is where the assembling and manufacturing of raw materials happen. These
products vary from the food processing business to the car industry. The materials collected are
manufactured to fulfil the needs of the customers that are done in the secondary sector. Its
example can be the manufacturing and processing of marble that has been quarried. The marble
will be polished and cut into billets if tiles are manufactured. The marbles are cut by using a
gang saw or diamond wires if slabs are required. The resin is then used as there will be cuts in
the surface, it ensures that purity stays in the final product. Unlike the primary sector, this sector
is organised and used more reliable techniques for production. In 2010, only eighteen per cent of
people were working in the secondary sector In the UK (Aaron, 2021).
2.3. Tertiary Sector

The industry’s tertiary sector is concerned with giving a service. Furthermore, services
are activities, which are done by businesses or people for consumers. The tertiary sector
businesses examples are cinemas, supermarkets, banks, or hairdressers. In the UK majority of
people work in the service or tertiary sector. This sector is the final chain of 3 sectors and gives
the services that are intangible like services like a train ride or education. Advice and
entertainment in comprised in the tertiary sector and usually these services are straight to the
businesses or consumer. This sector has dramatically risen as there is a need for “basic services”
like schools or hospitals. Its example can be food that has been manufactured or retailer
purchasing clothes and placing them at stores for clients to purchase them when convenient. In
contrast with primary and secondary sectors, this sector utilises modern-day logistics ways to
execute its operations and also it is well organised (Arent, et al. 2014).
2.4. The contribution of sectors in UK economy
The services sector, according to “the U.K. Office for National Statistics (ONS),” is the
biggest sector accounting for up to 3/4th of the GDP. In the UK the service industry comprises
several industries, including business and finance services, consumer-focused industries, like
entertainment, beverages, food and retail. Production and manufacturing contribute less than
twenty-one percent of the UK GDP, and moreover, agriculture contributes around 0.60 per cent.
The manufacturing sector of the UK after having steady growth in the year 2017, grew only by
0.4 percent, and construction output decreased in 2018 by 0.4 percent, according to “The Blue
Boo: 2019 from the U.K. ONS” (BBC, 2021). The division of food products is the largest in the
manufacturing sector of the UK, showing a decline of £0.9 billion in sales in the year 2019.

In service, industry growth increased in 2018 by 2.1 percent, strengthening by the development
seen in the past 2 years. In real household use slowdown continued in 2018 that has been started
in 2017. This decline was blamed on uncertainty in part over Brexit and the falling housing
market. For the UK tourism is also a big money-maker. Visitors, in 2019m who are other states’
residents spent 28.4 billion pounds on tourism and travel in the United Kingdom. In June 2019
visits, the peak season for travelling, increase by nine percent on an annual basis (BBC, 2021).
3. HR policies in the UK and their importance to the modern workplace
3.1. Health and safety policies
Under the safety and health law of UK and the “Health and Safety at Work Act (1974)”,
it is responsibility of employer to protect the safety and health of not just their workers but also
all other people who may be influenced by the company (HSE, 2020). This act has high
importance in the UK because it provides the legal structure to encourage, stimulate, and
promote high standards of safety and health in workplace. It also protects the public and
employees from work activities (HSE, 2020).
The safety of every visitor, student, patient, the employment, and employee is a primary
concern in UK Health system measurable and constant efforts to reduce or eliminate behaviours
and conditions that can cause illness or injuries. The Health system of workplaces is committed
to the rule that this type of safety culture would help reduce costs, decrease lost work time,
increase productivity, maintain employee health. All members of organisation’s management
team are accountable for managing and promoting the safety of employees and also their work
environment (Loeppke, et al. 2015). Managers should ensure and implement compliance with
proper health system and procedures and policies specific to each department and hold their

employees accountable for following the safety standards. Also managers should report failures
in order to follow safety and security standards by other people outside of each department and
then take urgent notice to control situations, which are unsafe clearly. Supervisors and managers
should participate and lead in proactive audits and programs of their work regions to make sure
that safety concerns or issues are evaluated and resolved. They should ensure that proper
corrective steps are taken in an appropriate and timely manner, comprising of discipline for the
security and safety rule violations (Shea, et al. 2016).
Moreover, there are causes why a company must maintain a healthy and safe workplace.
It purges possible risks environment to everyone, which uses the facility. The productivity of the
company is related directly to the safety and health of its employees. Thus proper safety and
health practices protect its employees’ productivity. When staff is not healthy then it influences
quality, quantity and productivity. Proper practices maintain worker’s health and it also protects
human rights; human right to the healthy and safe environment and human right to the healthy
and safe workplace. A main cause for maintaining safety and health in workplace is that the
failure to follow health policies cost too much. The results of not having proper safety and health
practices could range from having costly financial pay-outs , to the employees’ death (Shea, et al.
2016).
3.2. Diversity and equality policies
The “Equality Act 2010” of the UK protect people legally from discrimination in the
work environment and also in wider society. It made the law simpler to strengthen and
understand protection in some cases. It sets out different ways wherein it is illegal to treat
someone (Govt. UK, 2021). Firms must promote the open communicate practice to support the

tolerant work environment free from any discrimination with respect to the social background,
marital status, age, disabilities, religion, ethnicity, race, and gender. Furthermore, firms must
reflect the societies they serve, and also that included people who are employed there. The
organisational diversity policy that “Fair Price” implemented in the workplace makes their staff
to work hard (Sharma, 2016). The company management looks into flexible working practices;
language training and recruitment specifically to ensure that workforce have the similar
opportunity to get success regardless of social background, marital status, age, disabilities,
religion, ethnicity, race, and gender. In workplace it is vital to enforce equality policies to ensure
that all workers have the similar rights irrespective of difference in language, religion, age,
gender and disability. Also equality would create a favourable atmosphere at workplace as
workers are provided with similar opportunities to grow and improve themselves (Ng & Sears,
2020).
Conclusion
In sole trader, control and ownership of the company is with one person. The private
limited companies provide its owners with limited liability. However, ownership of Charity
Company is owned by no one. This assignment discusses these three business legal structures as
well as its advantages and disadvantages. In second part it discusses the three main sectors of the
UK and its value to the UK economy. The main difference between primary, secondary and
tertiary sectors are that primary sector use traditional techniques, secondary sector use reliable
techniques, however, tertiary sector use modern-day logistics ways to execute its operations. And
in the last section it discussed the Health & Safety policies and equality and Diversity policies
and its importance for the work environment.

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