The Structure of Business

STRUCTURE OF
BUSINESS

Table of Contents
INTRODUCTION.................................................................................................................................3
TASK 1.................................................................................................................................................3
Explain the various kinds of business legal status that can be adopted by the startup along with its
strength and weakness according to the legal status..........................................................................3
In light of the business idea, identify various sources of raising finance along with their benefits
and limitations...................................................................................................................................5
TASK 2.................................................................................................................................................6
Identify and explain the various sectors of the economy that can be chosen for the startup. Explain
the difference between the various sectors along with their significance in the economy..................6
TASK 3.................................................................................................................................................8
Identify and explain the Human Resource Policy in aspect of Equality and Diversity as well as
Health & Safety. Enumerate the significance of the above mentioned policies at the workplace in an
organization.......................................................................................................................................8
CONCLUSION.....................................................................................................................................9
REFERENCES....................................................................................................................................11

INTRODUCTION
The term business structure can be referred to organizational structure that the
business is going to follow as a startup. It can also be referred as a legal structure of the
organization which decides the hierarchy and the operations at the startup. It is crucial to
determine an appropriate business structure as then accordingly the operational process or
structure will be determined such as the profit sharing, the owners, number of owners, tax
paying procedure, liability structure, etc. The rules and regulations for every business
structure vary with the other and each structure has its own strengths and weaknesses
(Moşteanu and Roxana, 2020).
The business structure plays a very important role in the startup and thus is a
preliminary for the startup planning. The study covers planning a layout for a startup and the
funds are being planned to be gathered through the means of loan that will be given by the
government to support new startups or to expand the existing ones. The study covers the
information that is mandatory for an individual to plan a startup. The information displayed
in the study covers the various financial sources and the Human resource policies along with
the different sectors that can be approached for a startup (Moşteanu, Faccia, and Cavaliere,
2020).
TASK 1
Explain the various kinds of business legal status that can be adopted by the startup along
with its strength and weakness according to the legal status.
There are several of kinds of legal status that can be chosen by a startup in order to
operate the business in an industry. It is very important for a startup to determine the legal
status that the organization wants to adapt to. The organization needs to follow the rules and
regulations accordingly as per their legal status. The legal status that can be chosen by the
startup are discussed below-
Serial
no.
Legal Status Strengths Weaknesses
1. Sole Proprietorship-
Sole ownership is a typical
sort of business structure for
the little new companies. This
sort of business structure is
generally claimed and
worked by a solitary
individual. The single
individual holds the power to
take choices and appreciate
the benefits. The proprietor is
the sole authority of bearing
dangers and getting a charge
 It is not difficult
to work and is
cost agreeable
type of design.
 Owner is the only
individual to get
every one of the
increases and
benefits.
 Owner is the
solitary individual
who has power
over the business
 No free status of
the association.
 Falls shy of
assets.
 This structure
follows limitless
risk which
implies that if the
proprietor
neglects to
reimburse
obligations all
things considered

out of the benefits alongside
the execution. The sole
ownership can be applied and
be reasonable for different
locally established business,
specialists or the agreement
based. What to be considered
prior to deciding on this
construction is the assets and
the obligation one have.
 The charge is
paid uniquely
upon the benefits
 Owner is the lone
power to take
choices (Popkova,
and et.al., 2017).
his own property
can be seized.
2. Partnership-
Partnership firm is a type of
business structure where at
least two individuals team up
on common agreement to
share the benefits and
misfortunes of the business
association alongside the risk
sharing. This type of design
requires a legitimate
arrangement among the
accomplices that is otherwise
called a partnership deed. The
Partnership deed comprises
of the guidelines with respect
to benefit sharing, capital,
affirmation or retirement of
accomplices and the means in
regards to dissolving of the
organization firm. These are
done to stay away from future
struggles among the partners
or the owners.
 Partners can have
skills and abilities
that may act
complementary to
each other in the
business.
 The partnership
business structure
is easy to
establish and
lesser formalities.
 Partnership firm
is treated as a
separate identity.
 The payment of
taxes is purely on
the basis of
profits.
 The risk is shared
among the
different partners
along with the
losses if any.
 There can be
delay in the
decision making
process as all the
partners need to
be addressed.
 Partnership firm
involves
distribution of
profits among the
partners.
 Every partner is
accountable to
the other
partners.
3. Limited Liability Company-
A limited Liability Company
is a type of business structure
that is said to have a different
legitimate personality and a
common seal. It is
appropriate for the enormous
organizations. The limited
liability corporation business
structure has a complex and
difficult process of
establishment. It is a structure
where the liabilities is limited
that is in case if the company
bankrupts, the personal
property of the owners will
 The limited
liability
corporation
business structure
follows the
concept of limited
liability.
 The organization
is considered as a
separate legal
identity which
means it can sue
and get sued in its
name (Rong, and
et.al., 2017).
 It can have
 It requires a huge
amount of efforts
to establish a
LLC.
 The LLC concept
generates
administrative
cost annually.
 The LLC
requires
assistance from
professionals for
the purpose of
accounting and
legal formalities.