Legal Business Structures in UK Companies

Business Organizations

Table of Contents
INTRODUCTION...........................................................................................................................3
Business and Organizations in UK..................................................................................................3
The legal business structure of UK companies................................................................................3
Sole trader...................................................................................................................................3
General partnership ....................................................................................................................3
Limited Liability Partnership......................................................................................................3
Limited liability company...........................................................................................................3
Recommendation for IOM solutions ..............................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES:...............................................................................................................................5

INTRODUCTION
A business is a kind of firm or organisation that is founded by its owners with the goal of making money by promoting and
delivering their goods and services to the ultimate consumers in the market. The business owner wants their company to stand out
among the competition in the market so that the business activities can run smoothly. The marketplace is a location where new
businesses comes every day which increases the competition in the market.(Fenwick and Wrbka, 2018). This benefits the economy by
making it easier for people to sell and exchange money in the market. Emerging entrepreneurs comes in the market in order to make
money and improve their level of living which results in the overall growth of them. Owners open up a business according to the
Investments and capital available with them which makes them decide on the type and size of business they want to invest in.
Business law thus helps to understand the different legal business structures available in UK. This project will provide information
about the different business structures, their merits and demerits and will give recommendation to Sam for a suitable type for his
business expansion of IOM Solutions.
Business and Organizations in UK
IN the country of the UK, activities of the business are generally carried out by the Company Act of 2006. This act facilitates
the business that how to conduct the operations in the workplace smoothly and effectively. Business is a very wide concept as it
includes so many things to do the operational activities. One of the main assets in the business is the employees who help the
organisations to increase their performances in the market. This tells that the business firms and the organisation should behave
according to the legislations that have been made in regards to the employees. When a new business came in to the market it has been
given a specific entity through which they have to carry out their work (Miller, 2021). That specific entity includes various
components like perpetual existence, separate or distinct properties and a stamp of the company or the seal by the business name. It
also includes the rights and the responsibilities in order to file a case for non-following of the laws and the rules that have been made
by the government. At the time of starting a business an organisation have to do so many legal formalities and the agreements.
Sometimes the unethical behaviour and the misconduct of the employees in the workplace can increase the liabilities of the
business. One of the main liabilities that are caused by the employees is the vicarious liabilities. This type of liabilities can take place
in the organisation when the employees behave with the dishonesty and do the wrongful act in the companies. This cause the employer
liable for the actions of employees and they should have to take serious action in order to eliminate those problems. Business in the
workplace also faces challenges in negligent behaviour of the staff in relation to their roles and responsibilities. The director and the
manager have the main responsibility to distribute the various roles and duties through which they have to carry out their work.
Sometimes the directors and the managers fail to distribute the rolls and responsibility effectively then the legal liabilities raised in
relation to the non-fulfilment of obligations (Walker, Pekmezovic and Walker, 2019). It is very necessary for them to carry out the
operations effectively so that they can promote harmony in the workplace. Misconduct or the unacceptable behaviour by the director
can make the employees more negligent and irresponsible. Organisations and the companies do not expect this type of behaviour from
the directors as they are the main persons of the company who are responsible for carrying out the work. The companies and
organisations can take strict action against them in order to eliminate the damages that have been caused by them. Upper management
have the power to terminate the directors if there is any serious breach that can be seen and they can also sue them with the criminal
offence or various kinds of mal practices. The property that has been offered to the directors can also be taken from them when there
is the termination of the contract.
The partnership act of 1890 tells about all the policies of the partnership firms and also tells how companies formed in relation to
the partnership. Memorandum of association and the Articles of association helps the company in effectively managing all the
activities in the workplace. MOA can be defined as a legal document that tells how the companies formed and it can only be
incorporated when all the shareholders and investors sign on the document (Davidson and Forsythe, 2020). On the other hand AOA is
a kind of written document which explains various rules and regulations of the company that should be applied in the workplace.
The legal business structure of UK companies
Sold trader can also be defined as sole proprietorship is a kind of business structure in which the IOM solutions have been
working. Sam has been working in this business for the last 8 years and for the past 2 years the business has seen a significant growth.
This type of legal entity benefits the Sam as all the earning and the profits is enjoyed by him only. He also has to bear the entire
burden and the responsibilities that are caused in the business (Beatty, Samuelson and Abril, 2021). Sam is now looking for a business
structure that can help him to generate more revenue in the future. Some of the legal business structures are mentioned below.