Structure of Business - Audit Report

Structure of Business - audit
report

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
QUESTION ONE.......................................................................................................................3
Various legal statuses of businesses and strengths and weaknesses of these legal statuses. .3
Evaluating the strengths and weaknesses of three sources of finance available for business
start-up....................................................................................................................................6
QUESTION TWO......................................................................................................................7
Sectors within which the business operates in UK economy and its value to the UK
economy.................................................................................................................................7
QUESTION THREE..................................................................................................................9
HR policies and its importance to the modern workplace.....................................................9
CONCLUSION........................................................................................................................10
REFERENCES.........................................................................................................................12

INTRODUCTION
Starting up a new business is not an easy task which involves effectively
understanding the business requirements, type of business and organizational structure will be
best suited. In addition, determining the sources through which required capital can be
acquired. This report, thus, clearly evaluates the different statutes of the businesses and the
sources of funds available along with their pros and cons which helps in effectively analysing
the risks aspects. It also involves the relevance of HR policies in the modern workplace and
the sectors in UK economy where business can be operated.
QUESTION ONE
Various legal statuses of businesses and strengths and weaknesses of these legal statuses
Public company Private company Registered charity
Definition The public company
involves the
government
organizations and
firms which mainly
provides services
specific for the
social purpose.
It includes the
organizations whose
main objective is to
make profits and it
owned by both
government and the
other private body
which involves the
individuals and
groups.
It includes the
entities which are
registered solely for
the purpose of
carrying out the
social activities
particularly by the
profit organization
and is thus, non-
governmental in
nature.
Purpose These are the
government bodies
whose main
objective or the aim
is to effectively
deliver the public
goods and the other
governmental
services such as the
military and police
service,
infrastructure and so
forth for the
betterment of the
society.
The private
organizations are
considered to an
important part of the
nation’s economic
system which is
mainly owned by the
private bodies and
thus, operates the
business with the
aim of generating
profits. Private
companies play an
important role in the
growth and
development of the
UK economy,
resulting into
increasing the GDP
of the country
(Medina and Molins,
The sole purpose of
such charity
organization is in
respect to providing
advantages and the
benefits to the
society without any
consideration in
return (Audretsch
and Belitski, 2020).
This leads to
creation of the social
wealth and results
into further
enhancement and
improvement of the
society.

2018).
Ownership It is owed and
controlled by the
government bodies
and authorities
which may involve
subsidiaries,
agencies for
providing benefits to
the public. For
example, in the
context of Crown
Prosecution services,
it is the public
company which
controls and
regulates the
criminal prosecution
within UK and is
headed by the
Director General of
prosecution.
Under the private
company it is owned
and managed by the
different private
bodies such as
independent
agencies, channels
and so forth. The
shareholders are
having the right to
get the shares or
holding in the
private sector
company. For
instance, John Lewis
stores which is being
owned by its
employees who
carries out the
business operations.
They are mainly for
the benefit of the
public and the
society at large.
They do not generate
any income and if
they do, it further
utilizes the amount
for the cause they
advocate. Under
this, trustees are the
owners, for example,
Cancer Research
UK, which is run by
Trusts.
Public Limited Company
Strengths:
 It can raise capital issue of shares which it is listed on a recognised stock exchange.
Also, it can issue shares to public and thus, anyone can make an investment into it
which results into raising typically huge amount of money in comparison to the
private company.
 Such companies can easily find other sources of finances as they are most of the time
in a better position. Also, an increase in demand of a public company along with
having a stock listing can result into enhancing the organization’s creditworthiness
while issuing corporate debts.
 It is having more finance potential along with the better terms which results into
grabbing the advantaged position pertaining to pursuing the new projects, undertaking
capital expenditure in order to further expand the business.
 The shares of the public company can be transferred which is not so in case of private
company, thus, it means shareholders are benefitted from liquidity.
 It offers easy exit strategy to the founders because of the high transferability and the
increased visibility of the business.
Weaknesses: