Structure of Business: Types of Business Structures, Sources of Finance, Sectors in UK Economy

STRUCTURE OF BUSINESS

Table of Contents
INTRODUCTION.................................................................................................................................3
TASK 1.................................................................................................................................................3
a) With the help of a table explain the various business structures that can be adopted by a startup.
Also explain the benefits and drawbacks of each business structure..................................................3
b) In essence of the business startup, explain in detail any three sources of finances that can the
organization can choose in order to fulfill the financial needs...........................................................6
TASK 2.................................................................................................................................................8
Identify and explain the different types of sectors in the economy of UK. Elaborate differences
among the various sectors also explain the significance of each sector in the growth of UK............8
TASK 3.................................................................................................................................................9
Identify and explain the concept of Human Resource Policies and types of policies such as equality
and Diversity policy and Health and safety policy. Highlight their importance in the workplace......9
CONCLUSION...................................................................................................................................10
REFERENCES....................................................................................................................................12

INTRODUCTION
Business structure is referred to the legal status of an organization. The legal status is
the preliminary step to decide for an organization. The legal status helps in determining and
developing a legal recognition of the organization is trade practices. There are various types
of business structures that an organization can choose from. The structure of business helps in
determining the approach of the business in order to deal with various operational activities.
The business structure often explains the various duties and responsibilities that need to be
accomplished by the organization (Cao and Duan, 2017).
The study revolves around the study of various types of business structure that can be
followed by a startup. The study highlights various topics that are significant with the point of
view of planning to establish a startup. The study explains various sources of finance for the
startup along with its strengths and weaknesses. The study focuses on significance of various
Human resource policies and the types of sectors in UK that can be chosen the entrepreneur
to establish a startup (Díez-Martín, Blanco-González and Prado-Román, 2021).
TASK 1
a) With the help of a table explain the various business structures that can be adopted by a
startup. Also explain the benefits and drawbacks of each business structure.
There are various types of business structures that can be followed by the organization
or the entrepreneur for the startup. It is important for the business to choose a specific
business structure that identifies a legal status for the organization. The various form of
business structure that can be followed are, sole proprietorship, partnership, corporations and
limited liability Corporation. The business structures are explained below in detail.
Serial
no.
Type of business
structure
Advantages Limitations
1. Sole Proprietorship  Feasible and
requires less cost.
 It provides various
benefits in tax
deductions
(Downie, 2017).
 The business
structure of sole
proprietorship
overlooks the
separate legal
entity of the
organization.
 It may lack
expertise.
2. Partnership  It is an easy process
of registration of
the business
organization.
 The contract helps
in avoiding future
conflicts.
 Partnership
structure has no
safety against the
personal assets of
the owners.
 There is always a
threat of conflicts.
3. Corporations  It has security  There is a

against personal
assets of the
owners.
 The structure has
various modes of
raising funds.
drawback of
delayed decision
making process.
 It has a complex
registration
process.
4. Limited Liability
Corporation
 It involves lesser
formalities in the
registration process.
 The business
structure involves
no restrictions upon
the number of
shareholders.
 It has a complex
registration
process.
 This structure
requires hiring of
a professional
accountant.
Sole proprietorship
Sole proprietorship can be referred to as the most comfortable and the easiest way to
register and establish a business. Under sole proprietorship, the single person is considered as
the owner of the business organization and all the decisions are taken by the sole owner of the
business organization. The incomes and expenditures of the organization are considered as
the incomes and expenditures of the owner as well. The proprietor under the sole
proprietorship is not required to file separate tax returns (Fu and et.al., 2021).
Strengths of sole proprietorship-
 The sole proprietorship business is a low cost and feasible mode of establishing a
business structure. The sole proprietorship business structure requires a minimal cost
of registration of the business.
 The owners under the sole proprietorship are capable of various tax deductions in the
course of business operations. The various benefits in terms of tax deductions such as
health insurance.
 The sole proprietorship facilitates the benefit of quick decision making in the
organization. The reason behind quick decision making is the sole authority in the
organization.
Weakness of sole proprietorship-
 The business organization lacks the benefit of being treated as a separate legal entity.
The assets and liabilities of the organization are treated as the property of owner at the
time of dissolution.
 The sole proprietorship business structure lacks the professional experts in the
business during the operational process of the business. It is natural that single person
cannot be capable to perform best in all the fields and thus lacks expertise (Ghose,
2017).
Partnership