Key Sources of Laws for Business Organizations in the UK

This report discusses the legal context for business organizations in the UK, covering the key sources of laws such as company law, contract law, and tort law. It also explores the advantages and disadvantages of sole trader and partnership structures, and provides recommendations for IOM solutions. The report includes information on the formation process, taxation, liabilities, and dissolution of these structures. Course code: BMP4002 Business Law.

Business Management
BMP4002 Business Law
Assessment 2
Report describing the key sources of
laws as the legal context for business
organisation in the UK
Submitted by:
Name:
ID:
Contents
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Introduction
Business laws are those laws which are used for setting rules and regulations
that leads towards formation of business organization as per legal framework of a
country. These laws lead towards accomplishment of goals and objectives set by an
business organization. Further, business law leads towards performing of different
functions in relation to business activities which makes growth and sustainability of
an business organization achieved in more effective manner.. Scope of business
laws are wider as they directly impact working of business organizations. In this
report things covered is related to business organization in UK with legal structure of
sole trader and partnership. Also advantages and disadvantages with a taxation and
formation process is covered. In end IOM solution provided upon kind of business
organization required for making expansion possible.
Businesses & Organizations in the UK
Business organizations means those organizations that operates in relation to
various process of an organization helping in making business organization grow
within particular market. These organizations work upon proper legal structure
through utilizing certain laws which are company law, contract law and tort law. Such
laws leads upon developing legal framework leading towards formation of business
organization in more effective manner. In company law one of the most important
provision that is used within United Kingdom is Companies Act 2006 through which
rules and guidelines developed which makes business organization run as per legal
structure provided for it (Dickinson, 2017). The act has made it mandatory to form
memorandum of association and article of association by an organization to
establish itself within United Kingdom. The act specifies about roles and duties of
directors with stakeholders as they are important part of an business organization. In
business organization vicarious liability and negligence law is used to make process
of business more effective in nature. In Vicarious liability simple principle is followed
which is based over “Master can be held liable over wrong committed by its servant”.
This is applicable in relation to business organization in a way that employer is the
master and employee is servant, so if any wrong is committed by employee then
employer is held liable upon it. The tort of negligence applicable within business
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organization as act of omission which leads towards causing failure within task
specified to them. Then comes contract law which is used in order to make
agreement formed between two or more than two parties. Further contract law helps
business organization form agreement in more effective manner with the helps of
certain elements that is offer, acceptance, obligation, legality and validity. In order to
understand this an example is given that is, if BV Ltd has decided to form agreement
with GH Ltd over supply of ready-made shoes. So, for making this contract valid
within the eyes of law contract law is applied within it. The comes employment law
that is also an important part of business organization which helps in dealing rights
and duties of employees within an organization. As per the law various acts like
Employment right act 1996, Equality law 2010 and National minimum wages act
1998 is covered. These acts help in maintaining security and health of employee
through creating satisfaction among them. These laws are one of the most effective
manner which has helps in creating employee’s satisfaction through better working
environment. Also these laws develop legal structure possessed by an organization
within which memorandum of association and article of association is required to be
formed for an organization to run privately(Fairchild, and et. al., 2018). Then in
relation to partnership firm its termination can be possible when conflict arises within
partners which results in causing dissatisfaction among them. Also if employees
death takes place then under such situations partnership dissolve. In company law
there are roles and liabilities that has to be performed within an organization by
director, these are act within powers, promote the success of company, exercise
independent judgement, exercise reasonable care and deal with conflicts. In
company law Article of Association with memorandum of association required to be
formed . This helps an organization work in smooth and effective manner through
creating stability within business.
The legal business structure of UK companies
Sole Trader These organization are one of the most commonly used business
organizations form providing room to start ups to expand within market. Under such
organizations only single owner exists those are known as sole proprietor. These
organizations are tax rebated and are only required to pay personal the owner. All
liability if hold by owner themselves. Further formation of such organization is less
complex since no documentation is required for it. The formation process of such
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organization requires INHRC number to be generated with self declaration for
starting new business. These organization requires name only to start business and
not considered as separate entity. There are certain advantages and disadvantages
of sole trader which has been explained as follows:
Advantages of sole proprietor are: Easy and inexpensive process: This advantage is one of the most effective
advantage of these organizations which makes formation done within no time.
According to this business organization includes minimum or no work in
relation to registration process making business establishment possible in
more effective way(Kubacki, Szablewska and Kennedy, 2019). Few government regulation: Sole proprietorship include no government
interference within its work. This has helped functions performed in more
effective manner through which operations done with effectiveness. Further it
lead towards reduction within complexity of sole trade.
 Tax advantage: These organizations has tax advantage in a way that they are
not requirement over paying tax, only personal tax is paid by the owner of
business. It is paid out of profit that is earned by owner themselves from the
business processes.
Disadvantage of sole trader are as:
 Unlimited liability of owner: Sole proprietorship means those organizations
which makes owner face liability upon debts that has been incurred through
entity. As per this personal liability has been raised which makes debts rise in
relation to owner's inability to pay them. This causes harm to financial
structure of a sole trader organization causing difficulties in making business
organization achieve its objectives.
 Limitations on capital raising: Fund raising is one of the most common
disadvantage for sole organization. As per this funds are arranged through
family and friends or through personal resource. Lack of funds can take place
due to failure of arranging funds not in proper manner. This makes business
organization face difficulty in running of business and cam cause its collapse
also.
Partnership
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A partnership means formal agreement that has been formed by two or more
than two parties in order to full fill common motive to earn profit that is been shared
by partners themselves. In partnership all work is handled by the partners
themselves. Formation of partnership firm is easy as only INHRC number is required
to be generated. Further partnership agreement has been created only when legal
aspect like licensing is included to start partnership firm. All liability regarding
business is upon partners themselves. Further these organization dissolves only
when death of an partners takes place. Advantages and disadvantages of these
organization are as follows:
Advantages of partnership organization
 Bridging the Gap in expertise and knowledge: Due to involvement of more
than two person different ideas to perform business is developed which leads
towards innovation within the business. This makes partnership grow in right
direction as per knowledge possessed by them (Phillips and Moutinho, 2018).
 More cash: According to the perspective partners bring in new methods to
generate cash over it. This helps in developing better strategies by the
partners which leads upon creating potential impact over funds arranged in
more effective way through reliable sources. Further, funds are arranged
through investment done by partners within the firm. It helps in growing
business by fulfilling financial needs of firm. The right business partner may
also enhance ability to borrow money to finance the growth of the business. It
helps in solving money issues by evaluating partner's potential.
 Cost Saving: This is one of the most important part of partnership business
as it makes expenses managed in proper manner which helps in satisfying
requirements of firm . This could result in more substantial savings for future.
 More business opportunity: This is one of the most effective advantage that
is possessed by partners which makes different opportunities grow in relation
to business operations. Through opportunity like profit generation and
discount helps in making partnership grow in right direction.
Disadvantages of partnership organization
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 Liabilities: This is based upon sharing of profit and assets that is related to
partnership firm. All the responsibility of debts is over partner and together
they are required to solve it..
 Loss of Autonomy: This is another disadvantage which is possessed by
partnership. This makes partners cause dissatisfaction with the condition of
the firm in relation to personal interest possessed by partners causes conflict
of interests (Shanahan and Hopkins, 2019).
General Partnership
This is kind of partnership within which all partners share equal share upon
firm. Further all aspects like profit, debt and functioning of business is handled by an
individual. As per these all liability is hold by partners and it is free from taxes and
only partnership tax is to be paid. Dissolution of these partnership is done only when
conflict arises.
Advantage of general partnership are Better Work/Life Balance: This is one of the most important advantage of
such partnership which makes personal and professional life separated for an
employee. Further it increases positivism within working of an organization.
Disadvantage of general partnership are as follows:
 Future Selling Complications: It is one of the most common disadvantage
which allows partnership dissolve within no time.
Limited Liability
This is another form of partnership as per which liability of limited as per
investment done by partners themselves. In this partners hold liability according to
money that has been invested by partners. These liability dissolves only when
partners die. Further its advantages and disadvantages are as follows:
Advantage of limited partnership are Moral Support: Everyone needs to be able to bounce off ideas or debrief on
important issues. And we may need moral support when we encounter
setbacks or have to cope with work and everyday frustrations(Surdam, 2020).
Disadvantage of Limited liability partnership are as follows:
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 Lack of stability: In this no government interference is there which create
problems in stability by leading towards its dissolution due ti lack of profit.
Recommendations for IOM Solutions
As per the facts of the case it can be observed that Sam has been running
sole trader business and looks for expansion. This can be done through partnership
as it helps in making innovation with growth possible within market targeted for
expansion. Further partnership firm has various advantages which makes business
organization expansion done within the local market. It leads upon making business
organization grow through innovative ideas and proper collaborations of partners.
Conclusion
From the discussion it can be concluded that business laws are the laws
leading towards formation of business organization making goals and objectives
achieved in more effective manner. Also these law improves business activities
making organizations perform task within time limit specified. Further, the file covers
about sole trader and partnership with there advantages, disadvantages. In the end
solution if provided over case scenario given.
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REFRENCS
Books and Journals
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Publishing.
Burri, T., 2021. The New Regulation of the European Union on Artificial Intelligence: Fuzzy
Ethics Diffuse into Domestic Law and Sideline International Law. Available at SSRN
3865149.
Conrad, C.A., 2018. Ethics in Business Education. In Business Ethics-A Philosophical and
Behavioral Approach (pp. 327-337). Springer, Cham.
Courcelles, D., 2019. The Ethics of the Merchant in the Islamic Faith: From Ibn Khaldoun to
Islamic Finance.
Dickinson, A.L., 2017. Recent Ethics Opinions of Significance. J. Legal Prof., 42, p.291.
Fairchild, and et. al., 2018. 14. Health Justice. In Public Health Law and Ethics (pp. 587-612).
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Kubacki, K., Szablewska, N. and Kennedy, A.M., 2019. Guest editorial: Social good and ethics
in social marketing for wicked problems. Journal of Social Marketing, 9(4), pp.485-
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Phillips, P. and Moutinho, L., 2018. Business ethics. In Contemporary Issues in Strategic
Management (pp. 178-194). Routledge
Shanahan, K.J. and Hopkins, C.D., 2019. Level of agreement between sales managers and
salespeople on the need for internal virtue ethics and a direct path from
satisfaction with manager to turnover intent. Journal of Business Ethics, 159(3),
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Surdam, D.G., 2020. Examples of Mid-Nineteenth-Century Business Ethics in
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Palgrave Macmillan, Cham
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