The Structure of Business: Legal Statuses, Sources of Finance, and Sectors in UK Economy

This report covers legal statuses of business, sources of finance, and sectors in UK economy. It includes a table of legal statuses and their strengths and weaknesses, as well as an evaluation of three sources of finance. The report also identifies three sectors in UK economy and their differences, and comments on their value to the UK economy.

Structure of Business

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Construct a table and show the various legal statuses of business that your business may
adopt. Identify the relative strengths and weaknesses of these legal statuses.............................3
Considering your business idea, identify and evaluate the strength and weaknesses of three
sources of finance available to your business start-up................................................................6
TASK 2............................................................................................................................................8
Identify three sectors within the UK economy in which a business can operate. What are the
differences between the three sectors? Comment on their value to the UK economy................8
TASK 3..........................................................................................................................................10
Identify at least two HR policies and comment on their importance to the modern workplace
...................................................................................................................................................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
A structure of business is basically defined as the overall design and layout of company
which is developed by the higher authority for running their functions smoothly. Due to having
strong structure in business the start-up and many other companies are able to sustain their
vision, mission and objectives in long term (Al-Thuneibat, 2018). The report will covers
construct a table and show the various legal statuses of business that your business may adopt.
Identify the relative strengths and weaknesses of these legal statuses. It further explains
considering your business idea, identify and evaluate the strength and weaknesses of three
sources of finance available to your business start-up.
TASK 1
Construct a table and show the various legal statuses of business that your business may adopt.
Identify the relative strengths and weaknesses of these legal statuses
Types of organization Legal statuses Strength Weaknesses
The first organizational
structure is public public
company and in this
structure organization
here management is
focusing on providing
best quality product to
users according to the
needs and desires of
customers. Here the
connection between
employee and customer
are very strong.
The public company
is divided into three
categories central, state
and local . In aspect of
central it is defined as
providing various
types of goods and
services to each
consumers in various
locations according to
demand and supply. In
aspect of central
operational functions
here start-ups and
many organizations are
worked with help of
The first strength of
public is that here
strong communication
are developed with all
customer segments for
long time. The second
profit is that here
organization are
highly concentrating
on the desires of users
rather than profit.
Due to facilitating
wide range of
products to users
globally profit of
company are
increased in slow
manner which is not
good. The second
weakness is that due
to running their
functions globally
effective
communication is
not sustained with
customers for long
time.

different departments
and executives. In
aspect of state here
firm is focusing on
supplying the product
and services to users at
wide rage with average
price. In aspect of local
here organization is
focusing on specific
and small area for
enhancing the sale of
the product.
The second
organizational structure
is private company and
here the main motive this
type of organization is
that to increasing their
profit in any way. Due to
increasing profit
organization easily
sustained their goodwill
in market for long time.
Here private sector
company is mainly
divided into three legal
parts (Aslam, Kalim
and Fizza, 2019) . In
respect of sole trader
whole departmental
and service functions
are handled by single
person in the form of
owner. In comparison
with others it is a very
simple and effective
structure for enhancing
company productivity.
In respect of
partnership it is a one
type of agreement
In private company
the first strength is
that use of skilled
work force. Due to the
use of skilled
employee's
organization easily
sustained their profit
margin and market
share for long time.
The second strength is
that strong connection
with suppliers. Due to
having strong
connection firm easily
delivered their goods
and services to
The first weakness
of private company
is that here conflict
are raised between
employee and
employer
effectively. Because
in private
organization top
level management
always think about
the profit rather
than the health of
employee's. The
second weakness is
that work load are
very high for
employees

between more than one
person for running all
kinds of business
smoothly. In this
structure
responsibilities and
roles are effectively
distributed to all
categories of
employees which leads
to increase the profit
margin of company at
large scale. In respect
of companies it is
basically a small part
of organization which
is beneficial for
sustaining the vision,
mission and objectives
for long time.
customers in time. regarding their job
role and
responsibilities
which leads to
decrease their
performance
effectively
(Audretsch, Belitski
and Desai, 2019) .
In aspect of voluntary
company it is related
with those organization
who run their functions
without any type of
support of government
and private companies.
Proprietorship. Because
here the goodwill or
reputation of this type of
firm is already
In this type of
company legal
structures are mainly
divided into two parts.
In aspect of trust
higher authority of
firm is mainly focusing
on distributing
financial benefits to
society or poor people
at wide range. In
The main strength of
this type of
organization is that
type of company have
the global presence
and due to this
convenience are
highly increased for
users for buying their
services within low
The weakness of
this type of
organization is that
due to their huge
activities sometimes
information are
send to customers
wrongly regarding
their services and
products. It leads to
decrease the

established in market and
between customers.
relation to
unincorporated
association here
individuals are
gathered in the form of
group for developing
and running the new
business successfully.
time. goodwill of
company at large
scale.
Considering your business idea, identify and evaluate the strength and weaknesses of three
sources of finance available to your business start-up
The various sources of finance which is essential for the new business start-up are
 Bank loan – It is the most commonly utilized source for funding regarding start-up and
medium sized business. In this process borrower borrow the money from bank for
particular time period. The other important point is that here agreement are made between
between lender and borrower in clear manner in the form of document. Due to doing this
type of agreement barriers and stress are created to company for repaying the borrowed
amount in time.
 Angel investor – It is also a one type of method where start-up and small business
enterprise are borrowed money according to the required amount (Chen and Bellavitis,
2020). In this process organization borrow the money in huge amount from the individual
person. In exchange for risking their money, they reserve the right to supervise the
practices of company's authority. In concrete terms, this often involves a seat on the
board of directors and an assurance of transparency. In this type of finance barriers are
not created to organization which is highly beneficial for them.
 Venture capital – It is also a one type of funding source where small and medium size
organizations borrowed money for run their activities smoothly. This procedure involved
giving up specific equity and ownership in business to an external party. It is also
essential for organization that they must ensure that the investor have relevant experience
and knowledge for business. In case of venture capital here also organization did not have
any type of time period for repaying the amount.

Strength and weakness of sources of finance -
Bank loan -
Strength -
 Keep control on organization – Here bank provide loan to organization according to the
value of the business and the current situation. Due the effective analysis of value of
business bank easily made contract with them and with help of contract the control of
organization is comes in the hands of bank.
 Interest is tax deductible – It means that due to receiving interest on bank loans tax are
easily deducted. Due to providing this type of facility it is easy for organization to plan
and budget for monthly loan payments.
Weakness -
 Time period – It is one of the weakness which comes in this source (Coen and Vannoni,
2020). Due to facing this type of issues authority of the organization always tried to put
pressure on their employees for enhancing their profit any way.
 High interest rates - Interest rates for small-business loans from banks can be quite
high, and the amount of bank funding for which a business qualifies is often not
sufficient to completely meet its needs.
Angel investor -
Strength -
 Low risk – In the process of angel investor legal risk are very less for business and due to
this the stability in the performance and productivity of organization are easily sustained
for long time.
 No time period – It is the biggest strength for start-up and other organizations in this
method. Because here firm did not need to repay their amount in specific time period.
Weakness -
 Substantial return on investment – Sometimes angel investors expect substantial return
on their investment which creates extra pressure on workers of company.
 Loss of control – During the time of investing money in start-up mostly angel investors
take a hands on approach to a business which is not good for the growth of organization.
Venture capital -
Strength -

 To increase additional capital – Due to facing less complications in this source
organizations easily borrow huge amount for their business. Here management did not
have stress regarding particular time period.
 Help to achieve business expertise – According to this strength here venture capital
assists the new start-ups for gathering business enterprise. Those expertise support the
business owner regarding decision making.
Weakness -
 Reduction of ownership stake – It means some times organization required extra funds
which is higher than the initial estimates. In such type of situation, owner losing their
majority stake in the organization.
TASK 2
Identify three sectors within the UK economy in which a business can operate. What are the
differences between the three sectors? Comment on their value to the UK economy
Sectors is basically a part of economy which is categorised into three parts primary,
secondary and tertiary sectors. Due to the effective analysis of these three sectors the political
stability of country and organization are easily sustained for long time (Hindle and Vidgen,
2018).
Primary Secondary Tertiary
Primary sector is basically
defined as a primary economy
and in this category specific
types of activities are involved.
The secondary sector is also a
one type of economy and it
covers all those activities
which consisting in varying
degrees of processing of raw
materials.
This sector is related with the
intangible aspect of providing
services to business and
customers. It is also defined as
the combination of both
primary and secondary
activities.
Activities which comes in this
category are farming, fishing,
mining, forestry and others.
Activities which comes under
this stage are manufacturing,
constructing and others.
The activities which comes
under this category are
financial services, hospitality,
communication, transportation

and others.
In this sector traditional
techniques or methods are
used for doing the
systematically and effectively.
In this sector company used
more reliable methods of
production which is highly
highly organized in nature.
In this sector company used
modern day logistic techniques
for implementing its function
inn organized manner.
In comparison with other
countries UK has large
workforce employed.
In this sector the employment
rate is balanced as a particular
set of skills is required for
finding a talented work force.
In this sector employment
share has developed in
ensuring years.
Impact of three sectors on UK economy -
In aspect of primary sector the here the contribution of agriculture and farming have
produced the great impact on the economy of UK. Because in UK in the field of farming, mining
and others employment are highly increased for unskilled and uneducated employee's and due to
this the growth of the primary sector and industry are highly enhanced within low time. Due to
the effective contribution of employee's in this sector many organizations are able to healthy and
fresh food to users for sustaining their health in long term.
In aspect of secondary sector here modern tools are used in various organization for
fulfilling the needs and desires of customers in time (Hrechyshkina and Samakhavets, 2019). In
this sector opportunities and employment are highly enhanced for skilled and talented persons.
For example those who completed their education in the field of engineering, electrical,
electronics, and others. Due to hiring these type of person in the form of employee, the overall
performance and productivity of organization are highly increased within low time.
In aspect of Tertiary sector here the main role of organization is to providing best quality
services and goods to customers in long time. For sustaining this purpose organizations is hiring
the talented employee's in all types of field such as HR, marketing, finance and IT etc. In the
companies who belong in these sectors they easily sustained positive relations with customers by
providing best quality product and services to them in prescribed time.
After analysing above data it concludes that the contribution of all these sectors plays the
major role for sustaining the performance and productivity of organization at large scale. Due to

the impact of these sectors the economy of UK are totally changed which leads to sustain
positive relationship between employee and customer in long term. According to above
mentioned graph it is effectively understood that in which way the growth of economy and
organization are enhanced. For example due to very less usage of technology in primary sector
employees are not able to finish their task in organized manner and in time. But in other sector
technology are highly developed and usage of technology in various industries are highly
increased. Due to the heavy usage of technology employees within organization are able produce
high quality products according to the needs and desires of customers quickly. Then in this way
the goodwill of start-up and medium organization are easily sustained in market for long time.
Advanced technology are highly essential for identifying the needs and desires of customers
quickly. Due to the proper of customer desires and needs, organization easily understand that
which type of goods are highly liked to buy the users. Then according to that organization easily
produce the product with best quality.
TASK 3
Identify at least two HR policies and comment on their importance to the modern workplace
The various types of HR policies are -
 Health and safety policies – Health and safety policy is defined as that type of policy
which is highly essential for protecting the mental and physical health of employees
within organization in the workplace area (Keane, Cormican and Sheahan, 2018). Due to
the effective implementation of these policies the positive relationship between employee
and employer are easily sustained for long time. With help of effective execution of
health and safety organization easily sustain the productivity and performance of
employee's at maximum level. A health and safety policy is also known as organization
statement regarding its commitment for maintaining a healthy and safe work atmosphere.
 Equity and Diversity policies – In this type of policy organization aims to facilitate
work atmosphere to employees which is related with fairness, respect and equity for
cultural and social diversity. Due to providing equal treatment to all workers the positive
communication are easily sustained by higher authority for long time. The main purpose
of this type of policy is to remove and prevent unfair discrimination, harassment and
victimisation wherever we encounter it in our work, to promote equality of opportunity in

all that we do, and to value and respect differences. In this way the safety and security for
lower level employees are highly increased for long time.
The various types of importance of HR policies in the modern workplace within
organization are -
Firstly, with help of effective HR policies organization easily implement effective rules
and regulations. Because with help of various rules and regulations the misconduct or illegal
activities of lower level employees are highly decreased in organization which are responsible
for creating threat for the goodwill of company.
Secondly, A effective human resource policy easily decrease the conflict between
workers and also assist the higher authority in the organization for taking right decisions based
on the official rules and regulations. Due to decreasing conflict effectively the vision, mission
and objectives of organization are easily sustained in market for long. In this way organization
easily identify the needs and desires of customers effectively.
Thirdly, A good HR policy will not only maintain the wellness of the organization inside
but it also will create a good corporate image among the society as well as job seekers to (Kim
andCrosthwaite, 2019). Due to maintaining wellness effectively organization easily handle the
problems of lower level employees in effective manner.
Fourthly, Effective HR policies support the workers for utilizing the resources of
company optimized manner. It leads to enhance the work efficiency and performance of firm at
higher rate. With help of utilizing various types of resources organization effectively identify the
real problems of the employees within low time. After identifying their problems top level
management easily prepared strong solutions for them.
After the analysis of above HR policies and their importance it concludes that due to
executing effective HR policies organization is able to run their activities in smooth manner.
With help of implementing beneficial and flexible human resource policies the trust and loyalty
of lower level employee's are easily sustained towards company for long time. In this way
organization is able to solve the complicated problems in business activities effectively.
Effective HR policies are also important for sustaining the productivity of employees in
workplace area for long time. Due to effective use of various HR policies organization and their
employees are able to deliver best quality products to customers in time. With help of delivering
high quality product to users firm easily sustained positive relationship with all customer

segments for long time. Effective HR policies also help the organization to facilitate strong
infrastructure to the employee's which leads to enhance their performance and productivity at
higher rate. It also assist employees to decrease misunderstanding and miscommunication
between employee's regarding the work.

CONCLUSION
After analysing above information, it concludes that strong structure of business assist the
organization for running their various functions smoothly. Effective business structure are highly
essential for sustaining positive relationship between employee and employer or employee and
customer for long time. With help of strong structure organization easily produced high quality
product according to the needs and desires of customers within low time. The report will cover
Identify three sectors within the UK economy in which a business can operate. What are the
differences between the three sectors? Comment on their value to the UK economy.

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