BMP4002 Business Law: Describing Key Sources of Law for UK Business

This report provides an overview of the legal context for business organizations in the UK, focusing on key sources of law and various business structures. It discusses the evolution of company law, the duties and liabilities of directors, and the implications of different business structures such as sole proprietorships, general partnerships, limited partnerships, and limited liability companies. The report also includes a recommendation for IOM Solutions, a sole trader business looking to expand, suggesting a Limited Liability Company structure to manage liabilities and attract investors. The document concludes by emphasizing the importance of effective business management within a legal framework and suggests that a Limited Liability Partnership is most suitable for the business's expansion.

BSc (Hons) Business Management
BMP4002 Business Law
Assessment 2
Report on describing the key sources
of laws as the legal context for
business organizations in the UK
Submitted by:
Name:
ID:
Contents
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Introduction
Every business organization is established with the purpose to gain profit and
success for the long term. There are various types of business enterprise that is
contributing towards the development and growth of the economy. Along with this
every business enterprise is different in terms of its operation, size, products,
financial background and many more. The business organization also needs to follow
the certain rules and regulation with the purpose to remain in the market. The
business enterprise makes the plan and strategies according to the risk as well
opportunities available in the business environment(Wronka, 2021). This particular
report deals with the Sam company which is a sole trader which is running its
business since 8 years and wants to expand its business. The project also provides
information for several structure of business, the merits and demerits, and
recommendation to Sam for selecting a appropriate form of business expansion for
IOM Solution are also mentioned in detail.
Businesses & Organizations in the UK
Company law can promote organization, or this can hold it back. Until the end of 20th
century, second of these was usually seen as inevitable consequence of ever-
increasing volume affects companies in United Kingdom. This is barely surprising, as
the condition of safeguards is essential is the situation where running of a business
were in a fiduciary relationship with the person who invest in that(Test, 2021).
Outside shareholders do have less or no control over the way where directors
manages their company, and safeguards were there to decrease the risk of their
investment, although risks through their nature can never be eliminated.
Only by the company law review of late 1990s was there for official recognition which
company law should, and could, be able to have a more positive impact on an
organization. These are:
 Increasing engagement of shareholder and a long term investment culture,
 Making this easy to run and set up a company,
 Ensuring good regulation and a 'think small first' approach, and
 provides flexibility in the future.
In this situation the great majority of company law is contained in companies act
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2006. with 1,300 section, this is one a longest act ever for being passed by
parliament. Company law continue to change and develop as per the need. Statutory
legislation made since companies act 2006 have been incorporated in the main act,
that is Small business, Enterprise and employment act 2015. this continues to
happen. Other relevant legislation which were enacted before 2006 is valid till now,
although every subject to development and change. The most essential acts which
were still a part of company law are:
 the company directors disqualification act 1986, (covered in chapter 10);and
 the IA 1986 (not covered in this guide).
As per unprofessional behavior for employee and lack of business for carrying out
their business operation gives rise to many liability. The one liability which arise in a
business is vicarious liability operated on larger scale. The liability took place when a
worker act dishonestly or behaves or commit any wrongful act, when this is a part of
enterprise as their worker, then liability will arise on part of employer as they held
liable and responsible for the actions of employee and they does act with time to
avoid problem. The business suffer problem as per negligent behavior for any
employee and member at time of carry out the roles and responsibilities. In business
enterprise the director is the one who is given position of head of the organization by
which they have many roles and duties which have to be assigned as the post want
to perform with honesty and carefulness to ensure fair business for being carry out in
part. When duty in not performed well by director then legal liability arise on their
behalf of them due to non fulfillment of legal obligation. The director have to perform
good and expected to do this with the authority to ensure that the best decision were
taken on part of the company. This is the duty which ensure that no conflict will rise
with the worker in the enterprise, if employee do any kind of misbehavior then the
director have to resolve this in time of promoting harmony. Unprofessional behavior
by the director can make them responsible for breach of duty and directors hold the
responsibility as according to unwanted behavior(Rogge, and McGinley, 2022). As
this is expected that the organization do not have to suffer because of the mistakes
of their head. The director may not be asked to provide remedy for a company by
paying compensatory damage. Their contract will be terminated in any type of
occurrence of serious breach and they were held disqualify as director and hold
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them with criminal offense or serious malpractices or practices. The procedure of
company's property with director is taken from them after ending of contract.
The Partnership Act, 1890 govern this partnership agreement from providing
provision which were mentioned that how a company is being formed and it will be
operated and terminated in which partnership take place due to malpractices.
Effective business management take place with aid of article of association and
Memorandum of association. MOA is a type of legal statement which aid to
managing the formation of company in time of their incorporation but this will be
implemented after getting signed by shareholder and guarantors. The AOA is a
written statement which is characterized as regulations and rules for a organization
which abide from them in time of working in company. This want consent of
directors, shareholder and owner before implementation in the company.
The legal business structure of UK companies
Sole trader is related with sole proprietor, this is a business structure of IOM solution
which is business of Sam. Sam is working for 8 years and last 2 years his business
is being growing. In sole trader Sam gain business earning come in only his hand.
As being a single manager he have to take every burden and responsibilities for
liabilities and risks which raise in business(Meggitt, 2022). Sam is planning to raise
the business so he look for business structure which is best suitable to him and
assist to earn profit. The various business structure are:
Sole Trader
This is a commercial enterprise shape that have self employment and controlled thru
unmarried individual in his capability. This shape of enterprise additionally gives
advantage in recognize in their status quo that is value friendly. This is
straightforward to run, function and open. This is one of the famous shape in
enterprise kind withinside the merging and younger marketers which set up and
expand the enterprise on small scale. They does this due to availability of much less
fund and capital with them. This is commonly desired thru a unmarried character
who've to behave because the proprietor to beginning their personal commercial
enterprise to make a small begin ups. A sole individual is the earner of all of the
sales and income that is generated in a commercial enterprise(Hardman, 2022). The
selection that is taken independently with out a hassle of judgement. The manipulate
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of possession offer the type of appeal to in new commercial enterprise people. This
have demerits when it comes to liabilities, money owed and losses which a sole
character need to endure at time of coping with the commercial enterprise. But this
have non-public control in appreciate of confidentiality. But having own circle of
relatives and private time from the enterprise is extra difficult. Corporation and profits
tax should be paid via the proprietor that have hold facts for the clients in admire to
the overall statistics safety law.
General Partnership
This is a type of partnership which incorporates or greater person which get
protected as a popular partnership in an partnership settlement. The partnership
perform enterprise thru sharing each duties and position which protected withinside
the enterprise. They must proportion losses and income in well timed foundation that
have identical share at time of coping with the commercial enterprise. The
partnership agreement mentions that a accomplice proportion value for status quo,
money owed and monetary dangers and this additionally have advantages which
incurred in enterprise. Because of settlement they were given worried withinside the
commercial enterprise operation and need to keep joint legal responsibility in admire
of threat control and duty for each motion taken thru them. Thus this get protected in
limitless private legal responsibility. This shape have greater reliability then a sole
dealer have due to clean funding in a enterprise. Also due to diverse enjoy and talent
of a associate have created choice making which assists for enhancing the
productiveness of commercial enterprise(Giliker, 2021). But the companion who face
trouble once they have been punished for any wrongful act of some other companion
proportion joint legal responsibility. This is ruled via the act of partnership which
outline dissolution and formation of enterprise in case of any of companion struggling
financial disaster and death.
Partnership
The partnership gives much less quantity of legal responsibility in evaluation to a
wellknown partnership. This is unique in recognize of advent for duty wherein there
may be difficulty in amount of cash that is to be spent thru the companions in a
enterprise. Business in made thru or greater accomplice that is in my opinion at risk
of each motion taken in enterprise. They do now no longer have joint or collective
legal responsibility. But on this a partnership have a registered workplace that is
essential, this need to be as in line with the law of government. The restrained
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partnership act, 1907 governs an LLP which additionally protects hobby for the
companions. This have a advent for written settlement which assists in powerful
feature of a enterprise.
Limited Liability
This is in regard of a personal restrained corporation wherein control is ruled thru the
businesses act of 2006, this offer info for a restricted legal responsibility. This
mentions the supply determines how a organisation is operated and formed, this
want to make a non-public organization and it may be dissolved. This additionally
make prison duty in appreciate of responsibilities and rights for the participants and
heads of a corporation who abide thru the charter of a organisation(Flint, 2020). The
corporation is owned thru the shareholders. This have a awesome company identity.
In this the proprietor experience minimal private legal responsibility.
Recommendations for IOM Solutions
When a commercial enterprise organization develops and develop this want well
timed enlargement as a way to take gain for developing possibilities withinside the
marketplace place. This additionally assists a commercial enterprise to conform
inside dynamic circumstances. Therefore, Sam endorsed to choose Limited Liability
Company for enlargement in their commercial enterprise IOM Solutions. The felony
shape provide lots of blessings(Cowling, and, et. al., 2020). This additionally aids in
sharing duties for control with diverse individuals. This facilitates in gaining better
earnings. This provide performance in tax planning. More buyers have been attracted
on this type due to their dependable nature, this assists to capital formation. This
gives in minimal non-public legal responsibility that is absolutely useful for Sam.
Conclusion
From the above document that is concluded that the right control of enterprise is
critical with a purpose to feature effectively. The commercial enterprise regulation
governing behavior and operation of commercial enterprise. Business need to be run
with the goal to earn income and sales in longer run. This range from diverse length
and sort and the proprietor select this kind as in step with their will. Sam is
suggested for selecting Limited Liability Partnership for the commercial enterprise
enlargement. This can help to manipulate their expert and private lifestyles easily at
time of having huge funding which assists him to earn correct income.
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REFERENCES
Cowling, M., and, et. al., 2020. Can Local Finance Add Value to Local Small Business?
Evidence from a UK Local Loan and Grant Fund. International Review of
Entrepreneurship, 18(1).
Flint, D., 2020. Is the UK Adequate?. Business Law Review, 41(6).
Giliker, P., 2021. Legislating on Contracts for the Supply of Digital Content and Services:
An EU/UK/Irish Divide?. Journal of Business Law, 2021(2), pp.143-162.
Hardman, J., 2022. The Plight of the UK Private Company Minority Shareholder. European
Business Law Review, 33(1).
Meggitt, G., 2022. Business not as Usual—The Financial Conduct Authority v Arch
Insurance (UK) Ltd.
Rogge, E. and McGinley, O., 2022. The Competing EU and UK Influence on Corporate
Governance in Ireland Following Brexit. Business Law Review, 43(3).
Test, R., 2021. An Unwelcome Development in the UK Corporate. BUSINESS LAW
INTERNATIONAL, 22(2).
Wronka, C., 2021. Anti-money laundering regimes: a comparison between Germany,
Switzerland and the UK with a focus on the crypto business. Journal of Money
Laundering Control.
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