Key Sources of Laws for Business Organizations in the UK

This report describes the legal context for business organizations in the UK, including the key sources of laws. It covers different types of business organizations and their legal structures, such as sole trader, general partnership, partnership, and limited liability. The report also provides recommendations for the most suitable organization for providing IOM solutions.

BSc (Hons) Business Management
BMP4002 Business Law
Assessment 2
Report describing the key sources of
laws as the legal context for business
organizations in the UK
Submitted by:
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Table of Contents
INTRODUCTION.....................................................................................................................2
TASK.........................................................................................................................................2
Businesses & Organizations’ in the UK...........................................................................2
The legal business structure of UK companies..............................................................2
RECOMMENDATIONS..........................................................................................................6
CONCLUSION.........................................................................................................................7
REFERENCES........................................................................................................................8
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INTRODUCTION
Business organizations are being comprised of various enterprises concerning
different styles, structures, liabilities. Every business organization have flexibility
these are designed to meet the goals for profit as well as nonprofit organizations.
Profit organizations are those which are established for earning profits and nonprofit
are being established for providing social services. The system of business
organizations is developed by concerning its management and operations of various
activities. This report will specify about various types of business organizations in
UK. Also gives details about types of legal business structures of UK companies.
Lastly, recommending the most suitable organization for providing IOM solutions.
TASK
Businesses & Organizations’ in the UK
The nature of a company is defined as practices and activities that they have
conducted to achieve set goal and vision. In the world of business, organizations
have been managed by following different types of law and regulations such as
Equality Act 2010, data protection or privacy, etc. which is quite essential for a
company to follow in systematic manner. Vicarious liability, business liability,
termination of partnership, article of association, etc. terms are included in category
of business transactions management practices that under a firm are conducted in
effective manner. It can be said that vicarious liability refers to key accountability
that has been assigned to a candidate or skilled employer, to obtain the outcome of
increasing performance and productivity level of ventures. Business liability in
negligence is when an expert fails to perform or achieve specific goal as well as
responsibility to get desire result (Abraham, 2021). It may put negative impact on
organizational progress and success in term of leading to decrease productivity,
performance and profitability. When a business is not running successful in the
market, then their management have rights to take strategic action in term of
termination from any restrictive concept.
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The legal business structure of UK companies
The legal business structures of UK companies are comprising of four types
of businesses each comprise of various obligations and liable to pay with the respect
of the owner or as a partner.
Sole Trader
The sole trader business is also known as the sole proprietorship business
structure. Which is owned and controlled by a single individual. This is the easiest
form of business which can be established by a one individual. This entity of
business can be established without the government intervention, by the small
owners. the formation od this business is managed and owned by single person with
less investment. The owner is responsible and liable for all the profits and losses;
debts being occurred in the business. The sole proprietorship does not require
registering in the formal way, so the dissolution of the trade involves paying all the
debts, closing all accounts related to creditors and also ensuring that all the taxes are
being payed (Rye, J 2020). the Examples ae local retailers of grocery shop,
consultation service, freelancers, are sole traders.
Advantages-
The best feature about chosen legal business structure is that it is quite easy
to establish and conduct practices as according to name. An entrepreneur may utilize
this option, when they do not have particular registration needs to set up a business.
Along with this benefit, it may encompass more advantages such as make person
capable to easily operate their venture operations and manage functions, without any
interruptions as they do not need to ask anything from others.
Disadvantages-
Sole trade a legal business structure covers certain disadvantages. For
example, lack of strategic suggestion from key stakeholders is the biggest drawback
of current format of a company (Ibrahim, Ghadas and Soh, 2021). It is might be
considered as the most disturbing feature of sole trader that ma put negative impact
on organizational progress & success. It may create challenges for users to obtain
fund by using appropriate funding source that is quite essential for them to do so in
appropriate manner.
General Partnership
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This is a form of partnerships; the general partnerships are the businesses in
which two or more owners or individuals shares the responsibilities of the entity.
These individual come together and agree for sharing the profits, losses, debts,
liabilities financial obligations and all the assets of forming the business. This is the
types of entity where on single individual is not responsible for bearing losses and
liabilities, taxes are being shared equal or in some proportion among all the partners.
in this business style partnership agreement is being created which outlines various
rights, profit sharing ratio, liabilities, taxes to be paid (Tevosyan, Tevosyan and
Kuzmina, 2018). This partnership is being dissolved or closed down when any of the
partner is dead, passes away, also when one partner become disabled, also if when
one individual exit because of any reason. The agreements being formed will also
give details relating to dissolving the partnership. This business binds the other
person with the actions also with the liabilities.
Advantages-
The key point of general partnership is to that individual may create this easily.
Any two people by working together can create a general partnership, which may
give them power to grow rapidly and in productive manner (understanding general
partnership advantages and disadvantages, 2021). Another benefit of similar legal
business structure, it that it is more easy to dissolve. It can be said that general
partnership depends on state status to cater default policies and rules for all
essential aspects of governance.
Disadvantages-
As a general partnership, all stakeholders are liable for venture debts and any
legal problems that arise. There was no formal legal security in place as user do not
incorporate venture into individual legal entity. Along with this drawback, general
partnership covers more, such as it may have lack of structure. It can be said that
when only general outline is accessible, partnership might be contentious at certain
duration. Some time, finances play unpredicted role in term of creating more
troubles.
Partnership
A Partnerships are business entity which is being formed with two or more
individual by making the formal agreements for operating the business and sharing
the profitability and losses, also distributing various responsibilities that the business
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generates. These are generally formed with one key motive of earning profits. every
individual in partnership have unlimited liability towards business. The partners in this
business can be government, profit enterprises, nonprofit enterprises also private
individuals. The taxes are being paid by all partners irrespective of their share of
profits, the income tax is being charged (Moss, Loor and Parada, 2022). This
business is dissolved with following the legal process, when any partners is dead,
also want to discontinue as a partner will set off all the liabilities, debts, assets of the
entity will be distributed among partners also the business legal existence will be
terminated in the desired name of that firm.
Advantages-
It can be said that partnership business or a company is quite easy to start or
build, as it may drive the attention of individuals toward building relationship with
trustworthy person. The requirements for building partnership with a firm or
entrepreneur is less than other legal business structures. Another benefit of
partnership structure is that it enables person to take right decision with discussion
with other stakeholders who are capable to do that appropriately.
Disadvantages-
With this structure, risk of confusion is high as number of members are
included in a partnership business, which may put negative impact on current
practices and efforts of both partners. Furthermore, with chosen form of business,
people are unable to take decision individually. As they need to make important
discussion with all whom are working together. They do not have access to grow
individually, which each and every person tend to do that.
Limited Liability
The limited liability is the business entity or the structures being designed for
private companies, which is followed by various entities. These business are being
established by combining the partnership also corporations or sole proprietorship
having the limited liability in the business. Limited liability company offer flexibility in
their operation this helps in making the structure of business in more appealing
manner. In this business the personal assets of the partners are protected with
certain laws. These are not used for paying the liability of the business. The taxes
are paid, by the owner in the name of self-employment tax. As the owner in this
business is capable to avoid for charging the double taxation. As the tax is being
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imposed on the individual level not with the respect of company or firm level. For
dissolving the limited liability business, the forms must be filed by the owner in the
article of dissolution in the state offices which (Rus and CORDOȘ, 2021). There after
the decision can be taken for dissolving the legal entity being formed.
Advantages-
The advantage of this structure is that it may provide chance to share income
with everyone equally along with tax charges that they have to pay. It may lead to
decrease stress and work pressure over, a person who are facing issues to deal with
complex business challenge individually. It encompasses more benefit such as
flexibility of income distribution that may put positive impact on further organizational
activities.
Disadvantages-
The biggest drawback of this structure is that it creates challenges to raise
capital, which is quite essential for a company to raise in effective and appropriate
way. It may usually have two sources of raising funds as an enterprise such as debt
and equity. Each option is challenging to utilize appropriately and successfully. It may
affect negatively, while firms may take strategic decision such as in term of entering
into new market.
RECOMMENDATIONS
 There are different types of options as legal business structures available in
the world business, that Sam can consider and utilize in systematic manner.
For example, he can use partnership as legal organizational form, which play
vital role in progress and success of his business (Sohrabi and
MohammadRahmani, 2021). Under chosen option, he can get share risk and
success with whom he trusts to work as partner or stakeholder for long. It is
fact that by working in a partnership, individuals can get opportunity to lead
business successfully. It is the best option that he can utilize and continue
business operations & functions accordingly.
 Along with above benefits, he can gain more than the expectations that put
positive impact on continuous or rapid growth of company as he faced issue
to manage venture growth in effective manner, especially in case of
increasing demand and candidates (Noorzai, 2021). He is not so ensuring
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about which business ownership is suitable or appropriate for him and
company which he operated and ruined from last 8th years. From above
analysis, it recommended to Sam that he can utilize partnership form of legal
structure for IOS solution, which in turn can give them chance to get creative
ideas from partners.
 Along with this, they can get opportunity to work with skilled and experienced
holders, who are capable to conduct effective and productive practices, in
order to achieve set aim & objectives. With partnership legal structure, firm
and its management may get opportunity to easily change their format later
when circumstances will be changed and affected their work in negative
manner. Until, that it is the best and most appropriate business format, which
play significant role in growth of IOS solutions in term of increasing
operational efficiency and effectiveness rather than last few years or months.
CONCLUSION
From above analysis, it has been identified that partnership is the best and
appropriate organizational style that IOM solutions owner has been utilized, for
purpose of gaining competitive advantages and achieved more objectives along with
current one. Organization by using chosen business structure has gained
competitive benefits in bulk, as it has achieved strategic aims in term of maximized
profitability. Furthermore, by summing up above discussion, it has been summarized
that by following above suggestion it has increased its productivity level and
enhanced customer satisfaction, which is quite essential and beneficial for
management to do so appropriately and in effective manner.
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REFERENCES
Book and Journals
Abraham, K. S., 2021. The Long-Tail Liability Revolution: Creating the New World of
Tort and Insurance Law. University of Pennsylvania Journal of Law and Public
Affairs. 6(3). p.1.
Ibrahim, N., Ghadas, Z. A. A. and Soh, R. C., 2021. “MONEY MATTERS”; DIVIDING
BUSINESS INTERESTS ON DIVORCE OR DISSOLUTION: SPECIAL
REFERENCE TO THE BUSINESS ENTITIES. IIUM Law Journal. 29(S1)).
pp.73-90.
Moss, T. W., Loor, A. D. and Parada, F. D., 2022. Partnerships as an enabler of
resourcefulness in generating sustainable outcomes. Journal of Business
Venturing. 37(1). p.106089.
Noorzai, E., 2021. Public–Private Partnership Risks in Conflict Zones and Solutions:
Case Study for Afghanistan. Journal of Infrastructure Systems. 27(1).
p.05021001.
Rus, M. I. and CORDOȘ, A., 2021. The Limited Liability Company Vs. The Joint
Stock Company. Swot Analysis. Fiat Iustitia. 15(1). pp.164-170.
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).
Sohrabi, R. and MohammadRahmani, S., 2021. STRATEGIC ALLIANCE AND
PARTNERSHIP IN ORGANIZATIONS: AN OVERVIEW OF FOUNDATIONS.
Turkish Journal of Computer and Mathematics Education (TURCOMAT). 12(1).
pp.546-562.
Tevosyan, A. T., Tevosyan, M. T. and Kuzmina, V. V., 2018. SMALL BUSINESS
NOWADAYS. In Современный взгляд на будущее управленческой
науки (pp. 126-128).
Online
Understanding general partnership advantages and disadvantages. 2021. [Online].
Available Through: < https://haimolaw.com/what-are-the-advantages-and-
disadvantages-of-a-general-partnership/>
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