Different Legal Statuses of Business and Sources of Finance

Structure of Business

Contents
INTRODUCTION......................................................................................................................3
Main body..................................................................................................................................3
A- Different legal statuses of business with its strength and weakness...........................3
B- Three sources of finance with strength and weakness.................................................5
C- Identify three sectors within the UK economy in which a business can operate......8
D- HR Policies and importance...........................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

INTRODUCTION
The entrepreneur starts up the new business by bringing innovative ideas and optimal
utilization of the resources by making contribution in the economy to achieve the objective.
The word startup denotes to a business in the primary phases of operations. The Startup
business are originated by entrepreneurs who need to grow a product or facility for which
they think there stands demand. These businesses usually commence with huge budgets and
restricted income, because of that they look for capital from a various of sources such
as venture capitalists. The individual person has the competence, skills and aptitude to start
and run the business. To startup the business various resources are recognized including the
legal business structure, sources of finance and human resources with policies. In developing
the business strategies, the financial requirement is determined with the segmentation of the
business into legal structures and implementing the suitable policies in mandate to generate
the distinctiveness of the business in the market (Calvo, N and et.al., 2018). In the study the
comprehensive information is provided on various legal structures of the business in UK with
its strengths and weakness that were adopted. It also states information regarding the diverse
sources of finance to startup the business with its advantages and disadvantage and three
different sectors of the UK economy and their differences. In study it has been also well-
defined changed human resources policies and their importance in the workplace. The chosen
startup business is Cosmetic company defining the manufacturing and distribution of the
cosmetic products to the customers of UK economy in the market. The cosmetic company
provides the wide range of products including the makeup, skincare, haircare, toiletries and
perfumes etc. the products help in enhancing the beauty of the customers and makes them
look beautiful.
Main body
A- Different legal statuses of business with its strength and weakness
The legal status of the organization describes the rights and liabilities of the
employees in the terms of the business ownership control, personal liability and financial
structure. With this it also determines companies and owner legal liabilities. These are
primarily divided into varied business sectors such as public limited company, private
Limited company and registered charity. The discussion is below-

Public limited company- In the company minimum paid-up capital is prescribed where
minimum number of members is seven and no limit in case of maximum members. The
public company provides the financial assistance within the prescribed limits. The company
shares are offered in the public which is freely traded by the members. It accepts and invites
the deposits from the public. The prospects are prepared by the public companies to issue
shares in public.
Strength- The capital is raised easily in the public company through public deposits,
acquisition by contributions shares which primes to the opportunities of the development and
growth. The company valuation is calculated easily as the companies are mandatory to file
the financial statements which gives the shareholders, investors, financial analysts to get
access regarding the company information (Detthamrong, U and et.al., 2017).
Weakness- The Public companies are susceptible to amplified examination from the
government, regulatory agencies, and the public. The company necessity meets numerous
obligatory reporting standards that are established by government entities. The owner loses
the control over different business. It requires the legal and regulatory requirements to protect
the shareholders. The required level of the transparency was high for the public companies.
Private limited company- It is designed legally with limited liability or lawful safety for its
stakeholders that places limitations on ownership. The members liability is limited to the
shares held by them which cannot be traded publicly. In the company the mini um number of
members is 2 with the maximum limit number of 200 members. The companies do not invite
and accept the deposits from the public. The company returns are separated and dispersed
among the shareholders in the form of dividend.
Strength- In the private limited company minimum capital is not required as it is a separate
legal entity. Venture capitalist and angel investors helps in raising funds. In the private
company the shares are transferrable by the shareholders to other person which is easy to
fetch funding. The financial problem is abridged due to limitless stakeholders and obligation
is been divided into diverse shareholders.
Weakness- The private limited company restricts the transfer ability of the shares by its
articles and does not require to issue prospectus to public. The shares cannot be quoted in
stock exchange. The administrator of the companies is held accountable for the liquidation of
the business (Dicke, T.S., 2017).